Preliminary Official Statement Dated November 13, 2013

PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER 13, 2013

NEW ISSUE Moody’s Rated “Aa2” Bank Qualified (See “RATING” herein)

In the opinion of Quarles & Brady LLP, Bond Counsel, assuming continued compliance with the requirements of the Internal Revenue Code of 1986, as amended, under existing law interest on the Notes is excludable from gross income and is not an item of tax preference for federal income tax purposes. The Notes are designated “qualified tax- prior to the time the Official

exempt obligations”. See "TAX EXEMPTION" herein for a more detailed discussion of some of the federal income tax

y Official Statement is in a form consequences of owning the Notes. The interest on the Notes is not exempt from present Wisconsin income or franchise taxes.

$1,500,000 BLACKHAWK TECHNICAL COLLEGE DISTRICT Rock and Green Counties, Wisconsin General Obligation Promissory Notes, Series 2013D

Dated: December 5, 2013 Due: April 1, 2020 - 2023

fer to buy these securities, nor shall there be any sale of thes The $1,500,000 General Obligation Promissory Notes, Series 2013D (the “Notes”) will be dated December 5, 2013 and will be in the denomination of $5,000 each or any multiple thereof. The Notes will mature serially on ct to revision, amendment, and completion in a Final Official Statement. April 1 of the years 2020 through 2023. Interest on the Notes shall be payable commencing on April 1, 2014 and semi-annually thereafter on October 1 and April 1 of each year.

MATURITY SCHEDULE e, but is subje ities may not be sold, nor may offers to buy be accepted, CUSIP (1) Base (April 1) Amount Rate Yield 09237R on under the securities laws of any such jurisdiction. This Preliminar

cati 2020 $325,000 2021 350,000 2022 375,000 2023 450,000

The Notes are being issued pursuant to Chapter 67 of the Wisconsin Statutes. The Notes will be general obligations of the Blackhawk Technical College District, Wisconsin (the “District”) for which its full faith and credit and unlimited taxing powers are pledged which taxes may under current law be levied without limitation as to rate or amount. The proceeds from the sale of the Notes will be used for the public purpose of financing building remodeling and improvement projects (the “Project”).

The Notes are subject to call and prior redemption on April 1, 2019 or any date thereafter, in whole or in part, from maturities selected by the District and by lot within each maturity at par plus accrued interest to the date of d be unlawful prior to registration or qualifi PreliminaryOfficial Statement constitute an offer to sell or the solicitation of an of redemption. (See “REDEMPTION PROVISIONS” herein).

The Financial Advisor to the District is: BAIRD ntained herein are subject to completion and amendment. These secur 12(b) (1), except for the omission of certain information described in the rul - The Notes will be issued only as fully registered Notes and will be registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as the securities depository of the Notes. Individual purchases will be made in book-entry form only in denominations of $5,000 principal amount or any integral multiple thereof. Purchasers of the Notes will not receive certificates representing their interest in the Notes purchased. (See “BOOK-ENTRY-ONLY SYSTEM” herein.)

The District’s Notes are offered when, as and if issued subject to the approval of legality by Quarles & Brady LLP, Milwaukee, Wisconsin, Bond Counsel. The settlement date for this issue is on or about December 5, 2013.

SALE DATE: THURSDAY, NOVEMBER 21, 2013 SALE TIME: 9:30 A.M. CT

(1)CUSIP data herein provided by Standard & Poor’s CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc Copyright 2013. American Bankers Association. securities, in any jurisdiction in which such offer, solicitation, or sale woul This Preliminary Official Statement and the information co Statement is delivered in final form. Under no circumstances shall this deemed final as of its date for purposes of SEC Rule 15c2

BLACKHAWK TECHNICAL COLLEGE DISTRICT Rock and Green Counties, Wisconsin

DISTRICT BOARD

Kevin D. Leavy, Chairperson Barbara J. Barrington-Tillman, Vice Chairperson Craig Duncan, District Secretary Eric Thornton, District Treasurer Victor M. Gonzalez, Member Laverne E. Hays, Member Mark W. Mayer, Member Dr. Karen Z. Schulte, Member Mary L. Soddy, Member

ADMINISTRATION

Thomas C. Eckert, Ed.D, President/District Director Renea L. Ranguette, Vice President of Finance & College Operations David McDonald, Controller Diane Nyhammer Ph.D, Vice President of Learning Edward Robinson, Vice President for Student Services

DISTRICT ATTORNEY

(General Counsel) David Moore Janesville, Wisconsin

PROFESSIONAL SERVICES

Financial Advisor: Robert W. Baird & Co., Milwaukee, Wisconsin

Bond Counsel: Quarles & Brady LLP, Milwaukee, Wisconsin

Paying Agent Contact: Blackhawk Technical College District, Wisconsin*

*Paying Agent contact person is Mr. David McDonald, Controller.

REGARDING USE OF THIS OFFICIAL STATEMENT

This Official Statement is being distributed in connection with the sale of the Notes referred to in this Official Statement and may not be used, in whole or in part, for any other purpose. No dealer, broker, salesman or other person is authorized to make any representations concerning the Notes other than those contained in this Official Statement, and if given or made, such other information or representations may not be relied upon as statements of Blackhawk Technical College District, Wisconsin (the "District"). This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Notes by any person in any jurisdiction in which it is unlawful to make such an offer, solicitation or sale.

For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, this document, as the same may be supplemented or amended by the District, from time to time (collectively, the “Official Statement”), may be treated as a final Official Statement with respect to the Notes described herein that is deemed final by the District as of the date hereof (or of any such supplement or amendment).

Unless otherwise indicated, the District is the source of the information contained in this Official Statement. Certain information in this Official Statement has been obtained by the District or on its behalf from The Depository Trust Company and other non-District sources that the District believes to be reliable. No representation or warranty is made, however, as to the accuracy or completeness of such information. Nothing contained in this Official Statement is a promise of or representation by Robert W. Baird & Co. Incorporated (the "Financial Advisor"). The Financial Advisor has provided the following sentence of inclusion in this Official Statement. The Financial Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Financial Advisor does not guarantee the accuracy or completeness of such information. The information and opinions expressed in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale made under this Official Statement shall, under any circumstances, create any implication that there has been no change in the financial condition or operations of the District or other information in this Official Statement, since the date of this Official Statement.

This Official Statement contains statements that are “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this Official Statement, the words “estimate,” “intend,” “project” or “projection,” “expect” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to risks and uncertainties, some of which are discussed herein, that could cause actual results to differ materially from those contemplated in such forward-looking statements. Investors and prospective investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Official Statement.

This Official Statement should be considered in its entirety. No one factor should be considered more or less important than any other by reason of its position in this Official Statement. Where statutes, ordinances, reports or other documents are referred to in this Official Statement, reference should be made to those documents for more complete information regarding their subject matter.

The Notes will not be registered under the Securities Act of 1933, as amended, or the securities laws of any state of the United States, and will not be listed on any stock or other securities exchange. Neither the Securities and Exchange Commission nor any other federal, state, municipal or other governmental entity shall have passed upon the accuracy or adequacy of this Official Statement.

IN CONNECTION WITH THE OFFERING OF THE NOTES, THE UNDERWRITER MAY OR MAY NOT OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICES OF THE NOTES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME WITHOUT NOTICE. THE PRICES AND OTHER TERMS RESPECTING THE OFFERING AND SALE OF THE NOTES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER AFTER THE NOTES ARE RELEASED FOR SALE AND THE NOTES MAY BE OFFERED AND SOLD AT PRICES OTHER THAN THE INITIAL OFFERING PRICES, INCLUDING SALES TO DEALERS WHO MAY SELL THE NOTES INTO INVESTMENT ACCOUNTS.

TABLE OF CONTENTS Page DISTRICT BOARD ...... 2 ADMINISTRATION ...... 2 DISTRICT ATTORNEY ...... 2 PROFESSIONAL SERVICES ...... 2 REGARDING USE OF THIS OFFICIAL STATEMENT ...... 3 SUMMARY ...... 5 INTRODUCTORY STATEMENT ...... 6 REDEMPTION PROVISIONS ...... 6 ESTIMATED SOURCES AND USES ...... 6 CONSTITUTIONAL AND STATUTORY CONSIDERATIONS AND LIMITATIONS CONCERNING THE DISTRICT'S POWER TO INCUR INDEBTEDNESS ...... 6 THE RESOLUTIONS ...... 7 THE DISTRICT ...... 8 GENERAL INFORMATION ...... 11 DEMOGRAPHIC AND ECONOMIC INFORMATION ...... 17 TAX LEVIES, RATES AND COLLECTIONS ...... 20 EQUALIZED VALUATIONS ...... 21 INDEBTEDNESS OF THE DISTRICT ...... 22 FINANCIAL INFORMATION ...... 24 COMPARATIVE STATEMENT OF REVENUES AND EXPENDITURES GENERAL FUND FOR YEARS ENDED JUNE 30 ...... 25 UNDERWRITING ...... 26 TAX EXEMPTION ...... 26 DESIGNATION AS QUALIFIED TAX-EXEMPT OBLIGATIONS ...... 28 CONTINUING DISCLOSURE ...... 28 BOOK-ENTRY-ONLY SYSTEM ...... 29 LITIGATION ...... 30 LEGAL MATTERS ...... 30 MUNICIPAL BANKRUPTCY ...... 30 RATING ...... 31 FINANCIAL ADVISOR ...... 31 MISCELLANEOUS...... 31 AUTHORIZATION ...... 32

APPENDIX A: Basic Financial Statements and Related Notes for the year ending June 30, 2012 and DRAFT for the year ended June 30, 2013 APPENDIX B: Form of Continuing Disclosure Certificate APPENDIX C: Form of Legal Opinion APPENDIX D: Official Notice of Sale and Bid Form

SUMMARY District: Blackhawk Technical College District, Rock and Green Counties, Wisconsin.

Issue: $1,500,000 General Obligation Promissory Notes, Series 2013D.

Dated Date: December 5, 2013.

Interest Due: Commencing April 1, 2014 and each October 1 and April 1 thereafter. Interest on the Notes is computed on the basis of a 30-day month and a 360-day year.

Principal Due: April 1 of the years 2020 through 2023.

Redemption Provisions: The Notes shall be subject to call and prior payment on April 1, 2019 or on any date thereafter at par plus accrued interest. The amounts and maturities of the Notes to be redeemed shall be selected by the District. If less than the entire principal amount of any maturity is to be redeemed, the Notes of that maturity which are to be redeemed shall be selected by lot. Notice of such call shall be given by sending a notice thereof by registered or certified mail, facsimile or electronic transmission, overnight express delivery or in any other manner required by DTC not less than thirty (30) days nor more than sixty (60) days prior to the date fixed for redemption to the registered owner of each Note to be redeemed at the address shown on the registration books. (See “REDEMPTION PROVISIONS” herein).

Security: The full faith, credit and resources of the District are pledged to the payment of the principal of and the interest on the Notes as the same become due and, for said purposes, there are levied on all the taxable property in the District, direct, annual irrepealable taxes in each year and in such amounts which will be sufficient to meet such principal and interest payments when due. Under current law, such taxes may be levied without limitation as to rate or amount.

Purpose: The proceeds from the sale of the Notes will be used for the public purpose of financing building remodeling and improvement projects (the “Project”).

Credit Rating: This issue has been assigned a “Aa2” rating by Moody's Investors Service, Inc. (See “RATING” herein.)

Tax Exemption: Interest on the Notes is excludable from gross income for federal income tax purposes. (See "TAX EXEMPTION" herein.)

Bank Qualification: The Notes will be designated “qualified tax-exempt obligations”.

Bond Years: 11,933.33 years.

Average Life: 7.956 years.

Record Date: The 15th day of the calendar month next preceding each interest payment date.

Information set forth on this page is qualified by the entire Official Statement. A full review of the entire Official Statement should be made by potential investors.

INTRODUCTORY STATEMENT

This Official Statement presents certain information relating to the Blackhawk Technical College District, Wisconsin (the “District” and the “State” respectively) in connection with the sale of the District's $1,500,000 General Obligation Promissory Notes, Series 2013D (the “Notes”). The Notes are issued pursuant to the Constitution and laws of the State and the resolutions (the “Resolutions”) adopted by the District Board (the “Board”) and other proceedings and determinations related thereto.

The Award Resolution (defined herein) will provide that the District will establish a separate debt service fund with respect to payment of principal of and interest on the Notes. In practice, the District will maintain a separate account in its debt service fund for each issue. This is in accordance with the traditional interpretation by the District of its obligation under prior note and bond resolutions respecting the maintenance of separate funds. All summaries of statutes, documents and Resolutions contained in this Official Statement are subject to all the provisions of, and are qualified in their entirety by reference to such statutes, documents and Resolutions, and references herein to the Notes are qualified in their entirety by reference to the form thereof included in the Resolutions. Copies of the Resolutions may be obtained from the Financial Advisor upon request.

If in any year there shall be insufficient funds from the respective tax levies to pay the principal of or interest on the Notes when due, the principal and interest will be paid from other funds of the District on hand, said amounts to be returned when the taxes levied have been collected.

REDEMPTION PROVISIONS

Optional Redemption

ESTIMATED SOURCES AND USES

Sources of Funds Par Amount of Notes $1,500,000 Total Sources $1,500,000

Uses of Funds Deposit to Project Construction Fund $1,500,000 Total Uses $1,500,000

CONSTITUTIONAL AND STATUTORY CONSIDERATIONS AND LIMITATIONS CONCERNING THE DISTRICT'S POWER TO INCUR INDEBTEDNESS

The Constitution and laws of the State limit the power of the District (and other municipalities of the State) to issue obligations and to contract indebtedness. Such constitutional and legislative limitations include the following, in summary form and as generally applicable to the District.

Purpose

The District may not borrow money or issue bonds or notes therefor for any purpose except those specified by statute, which include among others the purposes for which the Notes are being issued.

General Obligation Bonds

The principal amount of every sum borrowed by the District and secured by an issue of bonds may be payable at one time in a single payment or at several times in two or more installments; however, no installment may be made payable later than the termination of twenty years immediately following the date of the bonds. The District Board is required to levy a direct, annual, irrepealable tax sufficient in amount to pay the interest on such bonds as it falls due and also to pay and discharge the principal thereof at maturity. Bonds issued by the District to refinance or refund outstanding notes or bonds issued by the District may be payable no later than twenty years following the original date of such notes or bonds.

Promissory Notes

In addition to being authorized to issue bonds, the District is authorized to borrow money using notes for any public purpose. To evidence such indebtedness, the District must issue to the lender its promissory notes (with interest) payable within a period not exceeding ten years following the date of said notes. Such notes constitute a general obligation of the District. Notes may be issued to refinance or refund outstanding notes. However, such notes may be payable not later than twenty years following the original date of such notes.

Temporary Borrowing

The Board may, on its own motion, borrow money in such sums as may be needed to meet the immediate expenses of maintaining the schools in the District during the current fiscal year. No such loan or loans shall be made to extend beyond November 1 of the next fiscal year nor in any amount exceeding one-half of the estimated receipts for the operation and maintenance of the Schools for the current fiscal year in which the loan is made.

Debt Limit

Wisconsin Statutes limits the aggregate amount of District indebtedness to an amount not to exceed five percent (5%) of the value of the taxable property located in the District. The maximum bonded indebtedness of the District for purchasing and constructing buildings and equipment may not exceed two percent (2%) of the value of the taxable property within the District. For information with respect to the District's percent of legal debt incurred, see the caption INDEBTEDNESS OF THE DISTRICT--"Debt Limit," herein.

THE RESOLUTIONS

The following are summaries of certain provisions of the Resolutions adopted by the District pursuant to the procedures prescribed by Wisconsin Statutes. Reference is made to the Resolutions for complete recitals of their terms.

Authorizing Resolution

By way of an authorizing resolution adopted on October 17, 2013 (the “Authorizing Resolution”), the District Board authorized the issuance of general obligation promissory notes in an amount not to exceed $1,500,000 for the public purpose of financing building remodeling and improvement projects (the “Project”).

As required by State Statute, notice of the adoption of the Authorizing Resolution was published in the required newspaper on October 23, 2013. The Authorizing Resolution is subject to referendum if, within 30 days after publication of notice of adoption of the resolution, a sufficient petition requesting a referendum is filed by the electors of the District. The petition period will expire on November 22, 2013. Award of the Notes will be made subject to expiration of the petition period without the filing of a sufficient petition for referendum.

Award Resolution

By way of a resolution to be adopted on November 21, 2013, the District Board will accept the bid (or reject all bids) of the Underwriter for the purchase of the Notes, in accordance with bid specifications, provide the details and form of the Notes, and set out certain covenants with respect thereto. The Award Resolution pledges the full faith, credit and resources of the District to payments of the principal of and interest on the Notes. Pursuant to the Award Resolution, the amount of direct, annual, irrepealable taxes levied for collection in the years 2014 through 2023 which will be sufficient to meet the principal and interest payments on the Notes when due will be specified. The Award Resolution establishes separate and distinct from all other funds of the District a debt service fund with respect to payment of principal of and interest on the Notes.

THE DISTRICT

The Board is comprised of nine members. The members of the Board are selected by a committee comprised of the County Board Chairperson of each County within the District and are confirmed by the State Board. These members are appointed for staggered three-year terms and elect a Chairperson, Vice Chairperson, Secretary and Treasurer for one-year terms.

The Board has the power and duty, among other things, to adopt a budget (see “FINANCIAL INFORMATION- Budgeting Process” herein), to make rules for the organization, management and government of the schools of the District, to enter into agreements with other governmental units, to tax for operation, maintenance and debt service, and to purchase school equipment.

The present members of the Board and the expiration of their respective terms of office are as follows:

Expiration Name Employer and Position of Term

Kevin D. Leavy, Chairperson Food Service Director, Aramark Corporation June 30, 2014 Barbara J. Barrington-Tillman, Chief Deputy, Rock County Sheriff’s Office June 30, 2016 Vice Chairperson Craig Duncan, District Secretary Human Resources, Kutter Harley-Davidson/Buell June 30, 2015 Eric Thornton, District Treasurer Director of Human Resources, St. Mary’s Hospital June 30, 2014 Victor M. Gonzalez, Member Real Estate Salesperson, Bunbury & Associates June 30, 2014 Laverne E. Hays, Member Retired June 30, 2016 Mark W. Mayer, Member Dept. Head/Agriculture Agent, UW-Extension June 30, 2016 Green County Dr. Karen Z. Schulte, Member Superintendent of the School District of Janesville June 30, 2015 Mary L. Soddy, Member Owner, Creative Photography June 30, 2015

Source: The District.

Administration

The Board is also empowered to employ a President to conduct the day-to-day operations of the District. Thomas C. Eckert, Ed.D. was selected for the position of President/District Director in June 2010. Prior to joining the District, Dr. Eckert served as President for Bellingham Technical College for three years.

The administrative team includes the following people.

Years Name Title of Service Brian Gohlke Vice President of Human Resources 13.0 Renea L. Ranguette Vice President of Finance & College Operations 3.0 David McDonald Controller 1.5* Diane Nyhammer, Ph.D Vice President of Learning 0.0* Edward Robinson Vice President of Student Services 3.0

* Prior to joining the District, Mr. McDonald served as Audit Manager for McGladrey & Pullen, LLP for 10 years. Prior to joining the District, Dr. Nyhammer served as Provost/Chief Academic Officer at Rock Valley College for 5 years.

Source: The District.

Enrollments

The full-time equivalent enrollment figures are listed below.

School Year Total FTE 2003-04 1,978 2004-05 1,929 2005-06 1,870 2006-07 1,840 2007-08 1,904 2008-09 2,358 2009-10 2,916 2010-11 2,830 2011-12 2,565 2012-13* 2,290 2013-14** 2,130

*The 2012-13 FTE are current actual. ** Projected enrollments are based on anticipated 4% decline in enrollment.

Source: The District.

Employment Relations

Department 2012-13 Faculty 112 Administrative 75 Support Staff 42 TOTAL 229

Source: The District.

Labor Contracts

All full-time faculty members are represented by the Wisconsin Federation of Teacher's Local #2308, AFT-AFL- CIO. The District Board ratified a one-year contract with the Blackhawk Tech Faculty Federation. The new contract expires on June 30, 2014. Wages will increase by 2% in 2013-14. All full-time clerical and maintenance employees are represented by the Wisconsin Education Association Council. Their contract expires on June 30, 2014. Wages will increase by 2% in 2013-14.

The District considers its relationship with the employee groups to be positive and amicable as we engage collaboratively to empower our students and enrich our communities.

All eligible District personnel are covered by the Municipal Employment Relations Act ("MERA") of the Wisconsin Statutes. Pursuant to that law, employees have rights to organize and, after significant changes were made to the law in 2011, very limited rights to collectively bargain with municipal employers. MERA was amended by 2011 Wisconsin Act 10 (the "Act") and by 2011 Wisconsin Act 32.

Certain legal challenges were brought with respect to the Act. On May 26, 2011, the Dane County Circuit Court (the "Circuit Court") issued a decision which voided the legislative action taken with respect to the Act due to violations of the State's Open Meetings Law. However, on June 14, 2011, the Supreme Court of Wisconsin overturned the Circuit Court's decision by vacating and declaring all orders and judgments of the Circuit Court with respect to the Act to be void. As a result, the Act took effect on June 29, 2011, the day after it was published

9 in accordance with State statutes. On September 14, 2012, the Circuit Court issued a decision which declared that certain portions of the Act violate State Constitutional rights to freedom of speech and association and equal protection, including portions of the Act that prohibit collectively bargaining with municipal employees with respect to any factor or condition of employment except total base wages. On September 18, 2012, the State Attorney General filed an appeal to the Circuit Court's decision and requested a stay on the enforcement of the decision until such an appeal is decided. On October 22, 2012, the Circuit Court denied the motion for a stay until the appeal is decided. As a consequence, until the appeal is decided, local governments and school districts may be prohibited from following the portions of the Act that have been found unconstitutional. The outcome of these legal proceedings cannot be predicted at this time.

As a result of the 2011 amendments to MERA, the District was prohibited from bargaining collectively with municipal employees with respect to any factor or condition of employment except total base wages. Even then, the District was limited to increasing the base wages only by any increase in the previous year's consumer price index (unless the District were to seek approval for a higher increase through a referendum). Ultimately, the District could unilaterally implement the wages for a collective bargaining unit. However, these limitations on collective bargaining have been held unconstitutional by the Circuit Court as described in the above paragraph.

Under the changes to MERA, impasse resolution procedures were removed from the law for municipal employees of the type employed by the District, including binding interest arbitration. Strikes by any municipal employee or labor organization are expressly prohibited. As a practical matter, it is anticipated that strikes will be rare. Furthermore, if strikes do occur, they may be enjoined by the courts. Additionally, because the only legal subject of bargaining is the base wage rates, all bargaining over items such as just cause, benefits, and terms of conditions of employment are prohibited and cannot be included in a collective bargaining agreement.

Due to the changes described above, the Board was free to unilaterally determine and promulgate policies, benefits and other terms and conditions of employment. Accordingly, on October 2, 2012, the Board approved an Employee Handbook, which became effective for all employee groups. The Employee Handbook underwent some revisions in 2013 due to the expiration of the BTFF contract in June, 2013. The revised version was adopted on May 10, 2013. The Employee Handbook sets forth policies, procedures and benefits for employees of the nature that were previously set forth in labor contracts. The Employee Handbook's terms are subject to change at the sole discretion of the District and are not subject to grievance or arbitration by the unions. However, individual employees are allowed to file a grievance if they are disciplined or terminated. However, under the changes to MERA, the Board, rather than an arbitrator, is the final decision-maker regarding any grievance, though the grievance must be heard by an impartial hearing officer before reaching the Board.

Pension Plan

All employees of the District are covered under the Wisconsin Retirement System established under Chapter 40 of the Wisconsin Statutes. The total retirement plan contributions for the year ended June 30, 2013 were $2,058,222 and $1,919,395 for the year ended June 30, 2012. The amounts of such contributions were determined by the Wisconsin Retirement Fund and are in accordance with the actuarially determined requirement.

Other Post Employment Benefits

The District provides "other post-employment benefits" ("OPEB") (i.e., post-employment benefits, other than pension benefits, owed to its employees and former employees) through the Wisconsin Public Employers Group Health Insurance Program to employees who have terminated their employment with the District and have satisfied specified eligibility standards. Membership of the plan consisted of 35 retirees receiving benefits, 12 covered spouses of retired participants, and 212 active members as of June 30, 2013, the date of the latest actuarial valuation. OPEB calculations are required to be updated every two years and prepared in accordance with Statement No. 45 of the Governmental Accounting Standards Board (“GASB 45”) regarding retiree health and life insurance benefits, and related standards. An OPEB study for the District was last completed as of June 30, 2013.

No changes have been made nor are currently planned for the District’s Other Post-Employment Benefits plan.

The information summarized in the remainder of this section, below, is taken from the District's postretirement benefit plan actuarial valuation disclosure for the year ended June 30, 2013 ("Actuarial Valuation Fiscal Year Ended June 30, 2013").

The District is required to expense the estimated yearly cost of providing post-retirement benefits representing a level of funding that, if paid on an ongoing basis, is projected to cover costs and amortize unfunded actuarial liabilities over a given period not to exceed 30 years. Such annual accrual expense is referred to as the "annual required contribution." As shown in the Actuarial Valuation Fiscal Year Ended June 30, 2013, the District's annual required contribution was $954,759 for fiscal year ended June 30, 2013 and $129,742 for fiscal year ended June 30, 2014. For Fiscal Year Ended 2013, contributions to the plan totaled $406,463, which was 42.6% of the annual required contribution.

The plan's ratio of actuarial value of assets to actuarial accrued liability for benefits (the "Funded Ratio") as of the most recent actuarial valuation date, June 30, 2013, was 134.18%. As of June 30, 2013, the actuarial accrued liability was $5,831,611, and the actuarial value of assets was $7,825,083, resulting in an unfunded actuarial accrued liability of ($1,993,472).

A copy of the Actuarial Valuation Fiscal Year Ended June 30, 2013 may be obtained from the Financial Advisor upon request.

GENERAL INFORMATION

History

In 1911, six years before the use of federal funds for the promotion of vocational, technical and adult education throughout the nation, Wisconsin established a special Board of Vocational and Adult Education District. As a result of this law, the cities of Beloit and Janesville took the necessary steps to establish vocational schools in their communities. The Beloit and Janesville schools, along with major portions of Rock and Green Counties, were organized into a single system on July 1, 1968.

These two schools have developed to form the nucleus of the present vocational, technical and adult education district which is now Blackhawk Technical College.

In August of 1987, Blackhawk Technical College changed its name from Blackhawk Technical Institute to Blackhawk Technical College in recognition of its educational offerings.

Location

The District is located in Rock and Green Counties encompassing an area of 1,225 square miles. The Central campus of the District, home for most of the college's services, is located midway between the cities of Beloit and Janesville on over 80 acres of partially-wooded, rolling prairie. Additional centers offering quality courses and programs also exist to meet the expanding and diverse needs of residents within the community. These additional centers include: the Aviation Center, located at the Southcentral Wisconsin Regional Airport; the Beloit Center in downtown Beloit; the Monroe Center, located on Monroe's northwest side and the Center for Transportation Studies, which is located just north of Janesville.

Central Campus

The Blackhawk Technical College (BTC) Central Campus is located midway between Beloit and Janesville at 6004 Prairie Road, Janesville, Wisconsin. Situated on an 80-acre partially wooded site, the campus is home for most of BTC’s programs and services. The campus is easily accessible from Prairie Road (County Highway G) and U.S. Highway 51.

This comprehensive technical college facility is currently slightly more than 289,000 square feet and includes instructional classrooms, shops, and labs for most of BTC’s 50 instructional programs. The campus was originally constructed in 1974. Some of the programs offered at the Central Campus include: nursing, computer information systems, electromechanical, mechanical design technician, radiography, certified nursing assistant, police science, accounting, and legal secretary.

In addition to the programs offered, the campus also houses a library, information technology area, student services, childcare center, bookstore and food service with seating for approximately 600 in the student commons area.

Approximately 89,000 new square feet were added during 2004 and 2005 to provide a comprehensive protective services area including fire, emergency medical services, and police indoor firing range, additional computer classrooms, computer labs, general-purpose classrooms, children’s learning center and an expanded student services area.

Monroe Campus

The Monroe Campus is a 33,000 square foot building located on the northwest side of Monroe at Highway 11. This full-service, handicapped accessible campus has three computer labs equipped with state-of-the-art computer equipment, a distance learning lab designed for global classroom connections, a nursing assistant and phlebotomy lab, and seven general classrooms. The campus offers a selection of full associate degrees, one- year diplomas and short-term certificates, as well as general education core courses. A learning lab offers GED/HSED testing and vocational prep courses. Over 150 continuing education courses are offered each year.

Approximately 15,000 new square feet were added in 2004 to provide additional classrooms, computers labs, nursing laboratory, and dedicated science labs. In addition, a library, student services area, distance-learning classrooms, accelerated learning classrooms and a student lounge area were added. Approximately 1,530 square feet was remodeled in the student area to accommodate the new addition. The new construction and remodeling at the Monroe Campus allowed the College to expand programming and services and improve overall services available for students at the Campus.

Center for Transportation Studies

The Center for Transportation Studies is located north of Janesville on U.S. Highway 14, about one-quarter mile west of the intersection of U.S. Highways 14 and 51. The Center encompasses 30,000 square feet and contains two large shop areas for the Diesel and Agricultural Equipment Mechanic and Auto Technician programs, along with an area for the Landscape and Turf program. The facility also includes classrooms, a library, computer lab, faculty offices, and a student lounge. In addition, agricultural programs are housed at this Center, as well as many apprenticeship programs.

Beloit Center

The BTC Beloit Learning Center is comprised of approximately 27,000 square feet of leased space at the Eclipse Center on Riverside Drive in Beloit about 5 miles from the Central Campus. The Center includes classrooms, computer labs, phlebotomy lab, testing rooms, a student lounge, multipurpose lab for special offerings, and faculty and administrative offices. This site provides adult basic education (GED/HSED and ELL), general education, phlebotomy technician, business classes, CPR, and community education courses targeted to assist students to transition to programs at Central Campus.

Rock County Job Center

The Rock County Job Center was opened in March 1998. BTC is one of several agencies that offer services at the Job Center. BTC’s presence includes a general classroom for basic education courses, a computer lab, staff office, and a private conference room.

Rock County Jail

The Rock County Education and Criminal Addictions Program (RECAP) is offered at the Rock County Jail. The Rock County Jail provides all space and provides the necessary custodial/maintenance services. The space includes an office for one full-time and three part-time instructors, and 2-3 classrooms with computers. Basic skills education is provided to the jail population.

Outreach Facilities

BTC also has several outreach continuing education centers and outreach sites that provide space for adult continuing education classes and other services. In some instances, the College rents these sites; in others, the space is provided at no cost. The following are BTC’s current outreach sites:

. Albany High School . Argyle High School . Brodhead High School . Edgerton High School . Evansville High School . Milton High School . Grinnell Hall Center, Beloit . Mercy Hospital . Monroe High School . Monticello High School . Other area high schools (as needed)

District Vision and Mission Statement

Our Vision:

Blackhawk Technical College is a valued and integral partner in a prosperous and vital region.

Our Mission:

Empower our Students ~ Enrich our Communities

Our Guiding Principles - These are the principles that will guide our actions, activities, and decisions as a college: • Community-Focus: We seek to understand and respond to the needs of our district’s students, employers, and citizens. • Partnerships: We make the best use of our resources by working collaboratively with community business, education, economic, and nonprofit partners. • Transparent Communication: We communicate clearly and frequently so that information flows vertically and horizontally through the organization. • Accountability: We accept responsibility for our actions and we follow through on our agreements. • Campus Community: We create an inclusive college community where all students and employees feel welcome and supported in achieving their goals. • Interdependence: We recognize that we are interconnected both within our college and with the communities we serve and consider both intended and unintended consequences of our decisions and actions. • Data-Informed Decisions: We appropriately use both qualitative and quantitative data in making decisions. • Forward-Focused: We are focused on the future and ready to move in new and innovative ways.

Our Strategic Priorities:

• Blackhawk Technical College as a Key Economic Driver - We want Blackhawk Technical College to be a key draw for business and industry thinking of relocating in our area. We want Blackhawk Technical College to be a primary catalyst for business and industry expansion in our area. We want to be recognized as the primary provider of highly trained and skilled workers in our area. Blackhawk will be a key player in all economic development efforts in both Rock and Green Counties.

• Student Retention and Success - We want to reach more people in our district both traditional and nontraditional. We want to reduce barriers to those who are not yet our students but need to be and those who are already enrolled. We want our retention rates to improve. We want high course completion rates, high graduation rates, and a consistently high percentage of our students finding life-supporting jobs in their field of study. • A Diverse and Inclusive Environment - Our aim is to create an environment of inclusiveness, where students and employees are a mix of age, race, gender, religion, physical abilities, sexual orientation, and socioeconomic status reflective of the workplace and this district and country. We want all to feel valued and welcome. We seek to be a culturally competent organization. • Enhanced Organizational Effectiveness & Engagement - We want greater input into decision making—a more inclusive governance structure. We want to improve our systems and processes to be as efficient and effective as possible. We want increased communication, flowing vertically and horizontally both internally and externally. • New Resources - We need to develop new sources of funding to support the College. We want to grow the Foundation, increase the number of grants, and grow our partnerships with business and industry, putting into place systems that will allow us to do this on a continuing basis.

Programs

Blackhawk Technical College offers a wealth of programs and services designed to improve and advance students' skills and abilities in preparation for increased effectiveness in the world of work, and the world at large. To assist students who desire to enter, advance in, or re-train for the world of work, approximately 50 Associate Degree, Vocational Diploma, or cultural occupations are available. Numerous other courses are designed for those who wish to become more effective in the world-at-large.

Associate Degree

These programs are organized to provide day and evening educational opportunities at the two-year post- secondary level. The overall objective is the creation of an atmosphere of inquiry and learning in which students are guided in their pursuit of the understanding, appreciation, knowledge, and skills essential to their active and effective participation in their home, occupational and civic lives.

The specific objective is to prepare students for entry into or advancement in occupations which depend on technical information and on an understanding of the laws and principles of mathematics, science, and technology relevant to modern design, production, distribution, and service.

Associate degree programs require successful completion of a minimum of 64 semester credit hours of course work of which 32 must have been in courses dealing with the major field of instruction. At least 25% of these semester hours must have been earned at the institution awarding the degree. The distribution of course credits may vary according to the type of degree program in which the student is enrolled.

Diploma and Certificate Programs

Individual courses fulfill specific job needs. They may be chosen individually or they may be part of a Certificate or Diploma program.

Certificate programs include a grouping of only those courses which are essential to prepare a student for successful employment in specific occupations. Certificates may be awarded for completion of an educational offering not described under diploma or associate degree program criteria.

Diploma programs, usually one or two years long, provide more extensive training on a broader base in a more complete work area. This greater training leads to greater employment opportunity and to greater advancement possibilities.

Diploma programs may be less than one year, one year or two years in length. Occupational skills course work comprises a minimum of 80 percent of the total class time spent in these programs. Supportive related course work may constitute the remaining curricular requirements. Related instruction for apprenticeship is included as a diploma program.

Apprentice Programs and Courses

The Wisconsin Apprenticeship Law was created to fulfill the following purposes:

1. To assist in the development of better-trained workers for the trades.

2. To act as a protective measure for young men and women entering the trades.

3. To provide a basis for orderly procedure for the indenturing and training of apprentices.

The Apprenticeship Law is a part of the educational machinery of the state for instruction in useful occupations. Blackhawk Technical College has been vested with the responsibility of cooperating with employers and the Division of Apprenticeship and Training, Department of Workforce Development, under the Apprenticeship Law.

When an employer decides to use the apprenticeship method of training his or her skilled workers, an arrangement is made with representatives of the Division of Apprenticeship and Training to draw up the standards which apply to the trade field in which the apprentice is to be trained. As soon as this has been done, the employer and the apprentice sign a contract in which the training schedule, the total hours of related instruction, and the total time of the training program are determined.

A person interested in becoming an apprentice cannot enroll in Blackhawk Technical College for this purpose unless the person has entered into a training agreement with an employer and the Department of Workforce Development, Apprenticeship Division. This training agreement, as indicated, is outlined in a contract.

Listed below are the individual programs offered by Blackhawk Technical College.

BUSINESS AND INFORMATION TECHNOLOGY MANUFACTURING AND CONSTRUCTION Accounting Air Conditioning, Heating, Ventilation & Refrigeration Administrative Assistant Technology Information Technology – Web Analyst/Programmer Computer Numerical Control Technician Specialist Computer Service Technician Information Technology - Network Specialist Electric Power Distribution Legal Administrative Professional Electro-Mechanical Technology Marketing Industrial Engineering Technician Medical Administrative Specialist Industrial Mechanic Supervisory Management Mechanical Design Technician Individualized Technical Studies Technical Studies-Journeyworker Business Management Welding Information Technology – Information Security

HEALTH SERVICES MONROE CAMPUS Culinary Arts Farm Business and Production Management Dental Assistant Landscape and Turf Services Early Childhood Education Agribusiness Specialist Medical Assistant Laboratory Science Technician Assistant Nursing Medical Coding Specialist Nursing Assistant Pharmacy Technician OTHER – CERTIFICATE/SPECIAL PROGRAMS Physical Therapist Assistant Accounting Assistant Radiography Community Based Residential Facility Caregiver Diagnostic Medical Sonography Computer Applications Specialist Computer & Information Systems Security Computer Hardware TRANSPORTATION, AGRICULTURE AND Support APPRENTICESHIP Industrial Engineering Certificate Apprenticeship Management Development Automotive Technician Marketing Diesel and Heavy Equipment Technician Medical Office Specialist Personal Care Worker PROTECTIVE SERVICES Phlebotomy Fire Protection Technician Office Specialist Criminal Justice – Law Enforcement Office Technology Criminal Justice – Law Enforcement Academy Promotion Emergency Medical Technician – Basic Small Business Planning Emergency Medical Technician - Intermediate Transportation & Logistics Welding Fabrication Processes & Application

OFFERED IN COOPERATION - SHARED Dental Hygiene Physical Therapist Assistant Clinical Laboratory Technician Occupational Therapist Assistant Interpreter Technician

Academic Support Division

The Academic Support Division offers a variety of programs and services that provide career awareness and readiness activities, and instructional support for a variety of educational needs that exists in the adult community. The division works closely with other divisions of Blackhawk Technical College as well as local schools and industry to develop programs to meet educational needs in the community. All programs are offered at no cost to the student at several locations throughout the community including Central and Monroe Campuses, Beloit Center, Rock County Job Center, Rock County Jail, Janesville and Beloit Even Start Family Literacy sites and other community and work sites. Following is a list of the different programs and services offered by the division.

Adult High School and High School Credit Classes Basic Skills Education and GED/HSED Preparation Business and Industry Outreach for Basic Skills Contracting for At-risk High School Youth English As a Second Language Instruction Even Start Family Literacy Program RECAP/WtW (Rock County Education and Criminal Addictions Program/Welfare to Work Remedial Instruction for Vocational Students Special Needs Support and Instruction Tutorial Assistance for Vocational Students Wingspan

Adult Continuing Education/Continuing Education and Development

Serving over 6,800 adults each year throughout Rock and Green Counties, the Continuing Education and Development unit of Blackhawk Technical College combines programming for the general public as well as customized training for business and industry in delivering educational services and resources.

Subject matter embraces all disciplines. Methods of delivery range from seminars and workshops to short-term and semester-length courses, made available in classroom and shop format and through cable television and computer applications.

Continuing Education and Development staff are committed to the concept of “lifelong” learning and providing educational programs that reflect the latest in technological advances and services.

DEMOGRAPHIC AND ECONOMIC INFORMATION

Population

Rock City of City of Green City of County Janesville Beloit County Monroe Estimate, 2013 160,148 63,600 36,820 36,799 10,780 Estimate, 2012 160,129 63,480 36,850 36,863 10,811 Estimate, 2011 160,287 63,515 36,945 36,884 10,820 Census, 2010 160,331 63,575 36,966 36,842 10,827 Estimate, 2009 160,635 63,500 37,000 36,603 10,950

Source: Wisconsin Department of Administration, Demographics Services Center.

Per Return Adjusted Gross Income

State of Rock City of City of Green City of Wisconsin County Janesville Beloit County Monroe 2011 $47,640 $43,120 $44,260 $32,310 $46,650 $43,380 2010 46,958 43,766 44,436 31,968 44,874 42,601 2009 45,372 44,326 44,423 31,760 42,223 38,829 2008 47,046 46,180 47,132 32,690 46,125 44,307 2007 48,985 46,611 48,020 33,111 44,415 40,739

Source: Wisconsin Department of Revenue, Division of Research and Policy.

Unemployment Rate

State of Janesville City of Green Wisconsin MSA Beloit County August, 2013 6.2% 7.4% 10.9% 5.2% August, 2012 6.8 8.2 11.2 6.0

Average, 2012 6.9% 8.4% 11.1% 6.4% Average, 2011 7.5 9.5 12.9 7.1 Average, 2010 8.5 11.2 16.3 8.3 Average, 2009 8.7 12.8 17.8 9.0 Average, 2008 4.8 6.2 8.5 4.6

Source: Wisconsin Department of Workforce Development.

Building Permit Valuations

City of City of Year Janesville Year Beloit 2013* $38,522,074 2013* $17,984,032 2012 31,349,416 2012 17,929,144 2011 71,063,606 2011 46,809,383 2010 66,879,092 2010 13,393,074 2009 42,565,000 2009 57,554,444

*As of September 15, 2013. *As of March 30, 2013.

City of Year Monroe 2013* $13,243,812 2012 8,759,719 2011 6,580,245 2010 68,370,626 2009 10,186,876

*As of August 7, 2013.

Source: City of Janesville Official Statement dated October 22, 2013, City of Beloit Official Statement dated May 21, 2013 and Clerk, City of Monroe.

Largest Employers Number of Name Type of Business Employees Mercy Health System (1) Health care facilities 3,869 Seventh Avenue (2) Internet & catalog shopping 1,500 School District of Janesville Education 1,368 Rock County Government 1,161 Beloit Memorial Hospital (3) Medical facility 1,002 Monroe Clinic Hospital (2) Medical facility 917 School District of Beloit Education 881 Walmart 3 Locations (1) (2) (3) Discount department stores 840 Colony Brands Inc. (2) (4) Mfgr./Mail order food and gifts 830 GHC Specialty Brands, also known as Lab Distributor of safety equipment & supplies 800 Safety Supply, division of Grainer (1) Frito-Lay (3) Snack food processor 701 City of Janesville Government 649 Monroe Truck Equipment (2) Wholesales truck parts & accessories 550 Woodman’s Food Market 2 Locations (1) Retail grocery 550 LeMans Corporation (1) Distribution center 500 Dean/St. Mary’s/Riverview Clinic (1) Medical facilities 500 SSI Technologies Inc. (1) Manufacturers powdered metal materials 500 City of Beloit Government 457 Prent Corporation (1) Manufacturers plastics film & sheet 400 Beloit College (3) Education 400

(1) City of Janesville. (2) City of Monroe (3) City of Beloit. (4) Colony Brands Inc. also employs 1,490 temporary employees and an additional 5,000-5,500 employees during the holiday season.

Source: Infogroup (www.salesgenie.com), 2013 Wisconsin Business Service Directory and Employer Contacts.

Largest Taxpayers

2012 2012 Assessed Equalized Taxpayer Type of Business Valuation Valuation Mercy Health System (1) Health care facilities $68,054,450 $83,055,743 ABC Supply (3) Wholesale distribution 61,151,759 63,385,285 Janesville Mall (1)(4) Retail 34,594,700 42,220,436 Kettle Foods (3) Food Processor 39,660,339 41,108,906 Dean/St. Mary’s/Riverview Clinic (1) Medical facilities 33,623,600 41,035,275 GHC Specialty Brands, also known as Distributor of safety equipment 31,311,860 38,213,957 Lab Safety Supply, division of Grainer (1) & supplies Blain Supply Farm & Fleet (1) Retail 29,827,330 36,402,191 Kerry Ingredients (3) Mfgr. Food additives 34,245,682 35,496,482 Staples Contract & Commercial LLC (3) Distribution center 32,331,313 33,512,192 Wal-Mart (1) Retail 22,544,600 27,514,123 Helgesen Family Partnership (1) Commercial Building 20,251,300 24,715,309 Menard's(1) Retail 19,236,050 23,476,267 LeMans Corporation (1) Distribution center 18,895,260 23,060,356 Woodman's(1) Retail 18,661,200 22,774,702 Frito-Lay (3) Snack food processor 21,486,117 22,270,883 Wal-Mart Stores (3) Retail 14,582,980 15,115,613 Menard's (3) Retail 14,409,774 14,936,081 Beloit Clinic(3) Healthcare services 14,355,837 14,880,174 Monroe Clinic Hospital (2) Medical facility 13,259,600 13,229,866 Woodman's(3) Retail grocer 12,330,705 12,781,076 Walgreens (3) Retail 11,904,229 11,919,423 Colony Brands Inc. (2) Mfgr./Mail order food and gifts 9,408,000 9,386,903 Wal-mart(2) Retail 8,828,400 8,808,603 TOTAL $584,955,085 $659,299,845

The above taxpayers represent 5.72% of the District's 2012 Equalized Value (TID IN) ($11,525,644,826). The District’s 2013 Equalized Value (TID IN) is $11,245,141,222.

(1) City of Janesville. (2) City of Monroe. (3) City of Beloit. Equalized value estimated. (4) Includes Boston Store, JC Penney, Sears and Kohl’s Department Stores.

Source: City of Janesville Official Statement dated October 22, 2013, City of Beloit Official Statement dated May 21, 2013 and Clerk, City of Monroe,

TAX LEVIES, RATES AND COLLECTIONS

Personal property taxes, special assessments, special charges and special taxes must be paid to the town, city or village treasurer in full by January 31. Real property taxes may be paid in full by January 31 or in two equal installments payable by January 31 and July 31. Municipalities also have the option of adopting payment plans which allow taxpayers to pay their real property taxes and special assessments in three or more installments, provided that the first installment is paid by January 31, one-half of the taxes are paid by April 30 and the remainder is paid by July 31. Amounts paid on or before January 31 are paid to the town, city or village treasurer. Amounts paid after January 31 are paid to the county treasurer unless the municipality has authorized payment in three or more installments in which case payment is made to the town, city or village treasurer. Any amounts paid after July 31 are paid to the county treasurer. For municipalities which have not adopted an installment payment plan, the town, city or village treasurer settles with other taxing jurisdictions for collections through the preceding month on January 15 and February 20. For municipalities which have adopted an installment payment plan, the town, city or village treasurer settles with other taxing jurisdictions for collections through the preceding month on January 15, February 15 and the 15th day of each month following a month in which an installment payment is due. On or before August 20, the County Treasurer must settle in full with the underlying taxing districts for all real property taxes and special taxes. The County Board may authorize its County Treasurer to also settle in full with the underlying taxing districts for all special assessments and special charges. The County may then recover any tax delinquencies by enforcing the lien on the property and retain any penalties or interest on the delinquencies for which it has settled. Since, in practice, all delinquent real estate taxes are withheld from the County's share of taxes, the District receives 100 percent of the real estate taxes it levies.

For the State of Wisconsin's 2013-2015 fiscal biennium, 2013 Act 20 (the "Budget Act"), among other things, eliminates the mill rate limitation that had been in place for districts in previous fiscal years, and in its place, introduces a tax levy limitation (the "Tax Levy Limit"). Under Section 38.16 of the Wisconsin Statutes, the Board may levy a tax on the full equalized value of taxable property within the area served by the District for the purposes of making capital improvements, acquiring equipment, operating and maintaining schools and paying principal and interest on valid bonds and notes issued by the District. Unless approved by referendum and except for taxes levied to pay debt service on valid bonds and notes (other than Noncapital Notes as defined below), the District's tax levy in 2013 or any year thereafter may not be increased by an amount in excess of the District's valuation factor (as described below). Except in limited circumstances as provided in Section 38.16 of the Wisconsin Statutes, if the Board imposes an excess tax levy, the State Technical College System Board is required to make corresponding reductions in state aid payments received by the District.

The Tax Levy Limit does not apply to taxes levied for the purpose of paying principal and interest on valid bonds and notes issued by the District to finance any capital project or equipment with a useful life of more than one year or to refund any municipal obligations or any interest on municipal obligations. However, the Tax Levy Limit does apply to notes issued by the District under Section 67.12(12) of the Wisconsin Statutes on or after the effective date of the Budget Act for other purposes (in essence non-capital purposes) ("Noncapital Notes").

Under the Tax Levy Limit, the District is prohibited from increasing its tax levy (for all purposes except paying principal and interest on valid bonds and notes other than Noncapital Notes) by a percentage that exceeds its valuation factor. Valuation factor is defined as a percentage equal to the greater of (i) the percentage change in the District's January 1 equalized value due to aggregate new construction, less improvements removed, in municipalities located in the District between the previous year and the current year, or (ii) zero percent. If a municipality is located in two or more districts, the Wisconsin Department of Revenue shall apportion the value of the aggregate new construction, less improvements removed, in the municipality among the districts based on the percentage of the municipality's equalized value located in each district. The Tax Levy Limit permits a tax levy increase (i) if the District did not levy its full allowable levy in the prior year, allowing the District to carry forward the difference between the allowable levy and the actual levy, up to a maximum of 0.5% of the prior year's actual levy, if the District's Board approves the increase by a three-fourths vote, (ii) with the approval of the electors of the District pursuant to a referendum, or (iii) in an amount equal to the amount of any refunded or rescinded property taxes paid by the Board in the year of the levy if they result in a redetermination of the District's equalized valuation by the Wisconsin Department of Revenue.

Set forth below are the taxes levied and the tax rate per $1,000 equalized value on all taxable property within the District. The rates as set forth include amounts levied for debt service. The rates set forth are for the collection years 2010-2014 and include the operational and debt service mill rate.

Uncollected Taxes Collection District District as of August 20th Percent of Year Tax Rate Levy of Each Year Levy Collected 2014 $1.92 $20,747,840 -To be collected- 2013 1.85 20,421,757 -0- 100.00% 2012 1.78 20,037,522 -0- 100.00 2011 1.73 19,888,750 -0- 100.00 2010 1.73 20,749,303 -0- 100.00

Source: The District.

2013-14 Proportionate Amounts of Local Tax Revenue Per Municipality Based on 2013 Equalized Valuation (TID-OUT)

2013 Equalized Valuation Percent Amount Entity (TID OUT) of Levy of Levy Rock County $8,921,165,966 82.7631% $17,171,555 Green County 1,857,992,966 17.2369 3,576,285 Totals $10,779,158,932 100.0000% $20,747,840

Several municipalities within the District have created Tax Incremental Districts under Wisconsin Statutes 66.1105. TID Valuations totaling $465,982,290 for these municipalities have been excluded from the District tax base.

Source: Wisconsin Department of Revenue.

EQUALIZED VALUATIONS

All equalized valuations of property in the State of Wisconsin are determined by the State of Wisconsin, Department of Revenue, Supervisor of Assessments Office. Equalized valuations are the State's estimate of full market value. The State determines assessed valuations of all manufacturing property in the State. Assessed valuations of residential and commercial property are determined by local assessors.

Set forth in the table below are equalized valuations of property located within the District for the years 2009 through 2013. The District’s equalized valuation (TID IN) has decreased by 10.55 percent since 2009. The average annual percentage change is -2.75 percent.

Equalized Equalized Valuation Valuation Year (TID-IN) (TID-OUT) 2013 $11,245,141,222 $10,779,158,932 2012 11,525,644,826 11,048,410,836 2011 11,752,283,785 11,229,423,995 2010 12,004,455,318 11,501,174,128 2009 12,571,369,516 11,998,810,726

Source: Wisconsin Department of Revenue.

INDEBTEDNESS OF THE DISTRICT

Direct Indebtedness

Set forth below is the direct general obligation indebtedness of the District, including principal and interest payments due on existing debt as well as debt service on the Notes. Interest on the Notes has been estimated using an average rate of 3.00 percent. Bond years total 11,933.33 years and average life is 7.956 years.

Outstanding Total Bonds and Notes New Issue-2013 D Notes Debt Service Year Principal Interest Principal Interest Requirements 2013 $3,930,000 $669,122 $4,599,122 2014 4,050,000 590,735 $37,000 4,677,735 2015 3,850,000 527,514 45,000 4,422,514 2016 3,680,000 438,394 45,000 4,163,394 2017 3,405,000 348,608 45,000 3,798,608 2018 3,385,000 257,056 45,000 3,687,056 2019 3,035,000 172,210 45,000 3,252,210 2020 2,210,000 108,383 $325,000 40,125 2,683,508 2021 1,455,000 64,560 350,000 30,000 1,899,560 2022 1,115,000 34,265 375,000 19,125 1,543,390 2023 750,000 10,350 450,000 6,750 1,217,100 $30,865,000 $3,221,196 $1,500,000 $358,000 $35,944,196 Less: 2013 Sinking Funds (3,930,000) (669,122) 0 0 (4,599,122) TOTAL $26,935,000 $2,552,074 $1,500,000 $358,000 $31,345,074

Other Financing

The District does not borrow for cash flow purposes.

The District anticipates issuing approximately $11,000,000 general obligation debt within the next twelve months.

Default Record

The District has never defaulted on any prior debt repayment obligations.

Underlying Indebtedness

Set forth below is information relating to the outstanding overlapping and underlying indebtedness of the District.

Amount of Debt Outstanding (Net of 2013 Percent Debt Principal Chargeable to Chargeable to Name of Entity Payments) District* District Rock County $45,940,000 99.80% $45,848,120 Green County 11,655,000 73.32 8,545,446 Cities Total 131,434,593 100.00 131,434,593 Villages Total 6,573,367 100.00 6,573,367 Towns Total 7,549,149 Varies 6,613,429 School Districts Total 253,551,685 Varies 224,750,502 Sanitary Districts Total 5,114,787 Varies 5,114,787 TOTAL $461,818,581 $428,880,244

Source: Wisconsin Department of Revenue. Information provided by each municipal entity through publicly available disclosure documents available on EMMA.msrb.org and the Wisconsin Department of Public Instruction and direct inquiries.

Statistical Summary

The table below reflects direct, overlapping and underlying bonded indebtedness net of all 2013 principal payments.

2013 Equalized Valuation as certified by Wisconsin Department of Revenue $11,245,141,222

Direct Bonded Indebtedness, including the Notes $28,435,000

Direct, Overlapping and Underlying Bonded Indebtedness Including the Notes $457,315,244

Direct Bonded Indebtedness as a Percentage of Equalized Valuation 0.25%

Direct, Overlapping and Underlying Bonded Indebtedness as a Percentage of Equalized Valuation 4.07%

Population of District (2012 Estimate)* 189,865

Direct Bonded Indebtedness Per Capita $149.76

Direct, Overlapping and Underlying Bonded Indebtedness Per Capita $2,408.63

*Source: Wisconsin Technical College District Board.

Debt Limit

As described under the caption "CONSTITUTIONAL AND STATUTORY CONSIDERATIONS AND LIMITATIONS CONCERNING THE DISTRICT'S POWER TO INCUR INDEBTEDNESS--Debt Limit," the total indebtedness of the District may not exceed five percent (5%)(1) of the equalized value of property in the District. Set forth in the table below is a comparison of the outstanding indebtedness of the District, as of the date of the closing of the Notes, as a percentage of the applicable debt limit.

Equalized Valuation (2013) as certified by Wisconsin Department of Revenue $11,245,141,222

Lega l Debt Percentage Allowed 5.00%

Legal Debt Limit $562,257,061

General Obligation Debt Outstanding, including the Notes $28,435,000

Unused Margin of Indebtedness $533,822,061

Percent of Legal Debt Incurred 5.06%

Percentage of Legal Debt Available 94.94%

(1) The maximum bonded indebtedness of the District for the purposes of purchasing school sites and the constructing and equipping of school buildings may not exceed two percent (2%).

FINANCIAL INFORMATION

The financial operations of the District are conducted primarily through a series of state mandated funds. All revenues except those attributable to the building funds and other funds authorized by State law are accounted for in the general fund, and any lawful expenditure of the District must be made from the appropriate fund and recorded therein.

As in other areas of the United States, the financing of public education in the State is subject to changing legislation, variations in public opinion, examination of financing methods through litigation and other matters. For these reasons the District cannot anticipate with certainty all of the factors which may influence the financing of its future activities.

Budgeting Process

The District is required by State law to annually formulate a budget and to hold public hearings thereon prior to the determination of the amounts to be financed in whole or in part by general property taxes, tuition, fees, funds on hand or estimated revenues from other sources. Such budget must list existing indebtedness of the District and all anticipated revenue from all sources during the ensuing year and must also list all proposed appropriations for each functional activity and reserve account of the District during the ensuing year. The budget must show actual revenues and expenditures for the preceding year, actual revenues and expenditures for not less than the first six months of the current year and estimated revenues and expenditures for the balance of the current year.

As part of the budgeting process, budget requests are submitted during the last half of the fiscal year by the instructors and departmental administrators of each division to their respective Vice Presidents, who thereafter review and revise such requests and submit them, with their recommendations, to the President. After review and adjustment by the administrative staff of the District, the proposed budget is presented to the full Board, at which time the proposed budget is reviewed with the District's administrative staff. After further review and adjustment, the proposed budget is again submitted to the full Board each year. The proposed budget is formally adopted by the Board after the public hearing is held.

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COMPARATIVE STATEMENT OF REVENUES AND EXPENDITURES GENERAL FUND FOR YEARS ENDED JUNE 30 ______

Actual on a Actual on a Actual on a Budgetary Budgetary Budgetary 2013 -14 2012-13 Basis Basis Basis BUDGET DRAFT 2011-12 2010-11 2009-10 Revenues Tax Levy $14,975,065 $15,241,139 $15,310,852 $15,886,758 $15,321,681 State Aid 2,892,000 2,839,940 3,463,383 4,739,837 4,923,842 Federal 12,000 23,738 28,554 13,616 14,795 Program Fees 7,272,900 7,155,981 7,604,405 7,924,305 7,729,501 Material Fees 499,900 471,868 509,850 542,762 523,654 Other Student Fees 382,000 388,066 384,064 420,717 422,275 Institutional 815,400 1,061,336 955,674 1,214,971 1,136,769

Total revenues 26,849,265 27,182,068 28,256,782 30,742,966 30,072,517

Expendi tures Instruction 17,264,110 17,328,775 17,028,845 18,376,379 17,273,177 Instructional Resources 2,223,805 1,894,283 1,786,391 1,993,022 1,841,161 Student Services 2,447,589 2,262,048 2,174,367 2,268,499 1,999,133 General Institutional 5,151,313 4,545,854 4,615,220 4,548,024 4,977,943 Physical Plant 1,927,206 1,919,064 1,929,108 2,023,029 2,051,830 Total Expenditures 29,014,023 27,950,024 27,533,931 29,208,953 28,143,244

Excess of revenues over (under) expenditures (2,164,758) (767,956) 722,851 1,534,013 1,929,273

Other financing sources (uses) Operating transfers out (10,000) (80,982) (684,875) (635,520) (445,183) Net other financing sources (uses) (10,000) (80,982) (684,875) (635,520) (445,183)

Revenues and other sources over (under) expenditures and other uses (848,938) 37,976 898,493 1,484,090

Fund balances - beginning of year 12,233,451 12,195,475 11,296,982 9,812,892

Fund balances - end of year $11,384,513 $12,233,451 $12,195,475 $11,296,982

NOTE: The amounts for all years are shown on a budgetary basis of accounting.

The amounts shown for the years ended June 30, 2010 through 2012 are excerpts, which have been examined by Wipfli LLP, Eau Claire, Wisconsin. The amounts shown for the year ended June 30, 2013 have been provided as a Draft, and the 2013-2014 figures are shown on a budgetary basis, and have been provided by the District. The comparative statement of revenues, expenditures and encumbrances should be read in conjunction with other financial statements and notes thereto appearing in Appendix A to this Official Statement.

Financial Statements

A copy of the District's Basic Financial Statements and Related Notes for the fiscal year ended June 30, 2012 and DRAFT for the fiscal year ended June 30, 2013, including the accompanying independent auditor’s report, is included as Appendix A to this Official Statement. Potential purchasers should read such financial statements in their entirety for more complete information concerning the District's financial position. Such financial statements have been audited by the Auditor, to the extent and for the periods indicated thereon. The District has not requested the Auditor to perform any additional examination, assessment or evaluation with respect to such financial statements since the date thereof, nor has the District requested that the Auditor consent to the use of such financial statements in this Official Statement. Although the inclusion of the financial statements in this Official Statement is not intended to demonstrate the fiscal condition of the District since the date of the financial statements, in connection with the issuance of the Notes, the District represents that there has been no material adverse change in the financial position or results of operations of the District, nor has the District incurred any material liabilities, which would make such financial statements misleading.

UNDERWRITING

The Notes have been purchased at a public sale by a group of Underwriters for whom ______is acting as Managing Underwriter. The Underwriter intends to offer the Notes to the public initially at the prices which produce the yields set forth on the first page of this Official Statement plus accrued interest from December 5, 2013, which prices may subsequently change without any requirement of prior notice. The Underwriter reserves the right to join with dealers and other underwriters in offering the Notes to the public. The Underwriter may offer and sell the Notes to certain dealers (including dealers depositing the Notes into investment trusts) at prices lower than the public offering prices. In connection with this offering, the Underwriter may over allocate or effect transactions which stabilize or maintain the market price of the Notes at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time.

TAX EXEMPTION

Quarles & Brady LLP, Milwaukee, Wisconsin, Bond Counsel, will deliver a legal opinion with respect to the federal income tax exemption applicable to the interest on the Notes under existing law substantially in the following form:

"The interest on the Notes is excludable for federal income tax purposes from the gross income of the owners of the Notes. The interest on the Notes is not an item of tax preference for purposes of the federal alternative minimum tax imposed by Section 55 of the Internal Revenue Code of 1986, as amended (the "Code") on corporations (as that term is defined for federal income tax purposes) and individuals. However, for purposes of computing the alternative minimum tax imposed on corporations, the interest on the Notes is included in adjusted current earnings. The Code contains requirements that must be satisfied subsequent to the issuance of the Notes in order for interest on the Notes to be or continue to be excludable from gross income for federal income tax purposes. Failure to comply with certain of those requirements could cause the interest on the Notes to be included in gross income retroactively to the date of issuance of the Notes. The District has agreed to comply with all of those requirements. The opinion set forth in the first sentence of this paragraph is subject to the condition that the District comply with those requirements. We express no opinion regarding other federal tax consequences arising with respect to the Notes."

The interest on the Notes is not exempt from present Wisconsin income or franchise taxes.

Prospective purchasers of the Notes should be aware that ownership of the Notes may result in collateral federal income tax consequences to certain taxpayers. Bond Counsel will not express any opinion as to such collateral tax consequences. Prospective purchasers of the Notes should consult their tax advisors as to collateral federal income tax consequences.

From time to time legislation is proposed, and there are or may be legislative proposals pending in the Congress of the United States that, if enacted, could alter or amend the federal tax matters referred to above or adversely affect the market value of the Notes. It cannot be predicted whether, or in what form, any proposal that could alter one or more of the federal tax matters referred to above or adversely affect the market value of the Notes may be enacted. Prospective purchasers of the Notes should consult their own tax advisors regarding any pending or proposed federal tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal tax legislation.

Original Issue Discount

To the extent that the initial public offering price of certain of the Notes is less than the principal amount payable at maturity, such Notes ("Discounted Notes") will be considered to be issued with original issue discount. The original issue discount is the excess of the stated redemption price at maturity of a Discounted Note over the initial offering price to the public, excluding underwriters or other intermediaries, at which price a substantial amount of such Discounted Notes were sold (issue price). With respect to a taxpayer who purchases a Discounted Note in the initial public offering at the issue price and who holds such Discounted Note to maturity, the full amount of original issue discount will constitute interest that is not includible in the gross income of the owner of such Discounted Note for federal income tax purposes and such owner will not, subject to the caveats and provisions herein described, realize taxable capital gain upon payment of such Discounted Note upon maturity.

Original issue discount is treated as compounding semiannually, at a rate determined by reference to the yield to maturity of each individual Discounted Note, on days that are determined by reference to the maturity date of such Discounted Note. The amount treated as original issue discount on a Discounted Note for a particular semiannual accrual period is generally equal to (a) the product of (i) the yield to maturity for such Discounted Note (determined by compounding at the close of each accrual period) and (ii) the amount that would have been the tax basis of such Discounted Note at the beginning of the particular accrual period if held by the original purchaser; and less (b) the amount of any interest payable for such Discounted Note during the accrual period. The tax basis is determined by adding to the initial public offering price on such Discounted Note the sum of the amounts that have been treated as original issue discount for such purposes during all prior periods. If a Discounted Note is sold or exchanged between semiannual compounding dates, original issue discount that would have been accrued for that semiannual compounding period for federal income tax purposes is to be apportioned in equal amounts among the days in such compounding period.

For federal income tax purposes, the amount of original issue discount that is treated as having accrued with respect to such Discounted Note is added to the cost basis of the owner in determining gain or loss upon disposition of a Discounted Note (including its sale, exchange, redemption, or payment at maturity). Amounts received upon disposition of a Discounted Note that are attributable to accrued original issue discount will be treated as tax-exempt interest, rather than as taxable gain.

The accrual or receipt of original issue discount on the Discounted Notes may result in certain collateral federal income tax consequences for the owners of such Discounted Notes. The extent of these collateral tax consequences will depend upon the owner's particular tax status and other items of income or deduction. In the case of corporate owners of Discounted Notes, a portion of the original issue discount that is accrued in each year will be included in adjusted current earnings for purposes of calculating the corporation's alternative minimum tax liability. Corporate owners of any Discounted Notes should be aware that such accrual of original issue discount may result in an alternative minimum tax liability although the owners of such Discounted Notes will not receive a corresponding cash payment until a later year.

The Code contains additional provisions relating to the accrual of original issue discount. Owners who purchase Discounted Notes at a price other than the issue price or who purchase such Discounted Notes in the secondary market should consult their own tax advisors with respect to the tax consequences of owning the Discounted Notes. Under the applicable provisions governing the determination of state and local taxes, accrued interest on the Discounted Notes may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment until a later year. Owners of Discounted Notes should consult their own tax advisors with respect to the state and local tax consequences of owning the Discounted Notes.

Note Premium

To the extent that the initial offering price of certain of the Notes is more than the principal amount payable at maturity, such Notes ("Premium Notes") will be considered to have bond premium.

Any Premium Note purchased in the initial offering at the issue price will have "amortizable bond premium" within the meaning of Section 171 of the Code. The amortizable bond premium of each Premium Note is calculated on a daily basis from the issue date of such Premium Note until its stated maturity date (or call date, if any) on the basis of a constant instant rate compounded at each accrual period (with straight line interpolation between the compounding dates). An owner of a Premium Note that has amortizable bond premium is not allowed any deduction for the amortizable bond premium; rather the amortizable bond premium attributable to a taxable year is applied against (and operates to reduce) the amount of tax-exempt interest payments on the Premium Notes. During each taxable year, such an owner must reduce his or her tax basis in such Premium Note by the amount of the amortizable bond premium that is allocable to the portion of such taxable year during which the holder held such Premium Note. The adjusted tax basis in a Premium Note will be used to determine taxable gain or loss upon a disposition (including the sale, exchange, redemption, or payment at maturity) of such Premium Note.

Owners of Premium Notes who did not purchase such Premium Notes in the initial offering at the issue price should consult their own tax advisors with respect to the tax consequences of owning such Premium Notes. Owners of Premium Notes should consult their own tax advisors with respect to the state and local tax consequences of owning the Premium Notes.

DESIGNATION AS QUALIFIED TAX-EXEMPT OBLIGATIONS

The District will designate the Notes as "qualified tax-exempt obligations" for purposes of Section 265 of the Internal Revenue Code of 1986 relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations.

CONTINUING DISCLOSURE

In order to assist the Underwriters in complying with Rule 15c2-12 promulgated by the Securities and Exchange Commission (the "SEC"), pursuant to the Securities Exchange Act of 1934 (the "Rule"), the District shall covenant pursuant to Award Resolution adopted by the Governing Body to enter into undertaking (the "Undertaking") for the benefit of holders including beneficial holders of the Notes to provide certain financial information and operating data relating to the District annually to the Municipal Securities Rulemaking Board (the "MSRB"), and to provide notices of the occurrence of certain events enumerated in the Rule electronically or in the manner otherwise prescribed by the MSRB to the MSRB. The Undertaking provides that the annual report will be filed not later than 270 days after the end of each fiscal year. The District's fiscal year ends June 30th. The details and terms of the Undertaking, as well as the information to be contained in the annual report or the notices of material events, are set forth in the Continuing Disclosure Certificate to be executed and delivered by the District at the time the Notes are delivered. Such Certificate will be in substantially the form attached hereto as Appendix B. A failure by the District to comply with the Undertaking will not constitute an event of default on the Notes (although holders will have the right to obtain specific performance of the obligations under the Undertaking). Nevertheless, such a failure must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Notes in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Notes and their market price.

The District is required to file its continuing disclosure information using the Electronic Municipal Market Access (“EMMA”) system. Investors will be able to access continuing disclosure information filed with the MSRB at www.emma.msrb.org.

The District did not file its audited financial information, which the District had agreed to file under previous continuing disclosure undertaking agreements as described in the Rule, for the fiscal year ended June 30, 2011 and the operating data for the fiscal year ended June 30, 2011 within the time specified. As of the date of this Official Statement, the District has filed the audited financial information and operating data in the manner prescribed by the MSRB. The District has established procedures to ensure filing of audited financial information and operating data are made in a timely manner in the future to the MSRB.

BOOK-ENTRY-ONLY SYSTEM

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

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

Purchases of Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Notes 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. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Notes are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Notes, except in the event that use of the book-entry system for the Notes is discontinued.

To facilitate subsequent transfers, all Notes deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Notes with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Notes; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Notes 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 Notes may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Notes, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Notes may wish to ascertain that the nominee holding the Notes for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Notes 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 Notes unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions, and dividend payments on the Notes will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from District or Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with Notes 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, Agent, or District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of District or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Notes at any time by giving reasonable notice to the District or Agent. Under such circumstances, in the event that a successor depository is not obtained, Note certificates are required to be printed and delivered.

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

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

LITIGATION

There is no controversy or litigation of any nature now pending or, to the knowledge of the District, threatened, restraining or enjoining the issuance, sale, execution or delivery of the Notes, or in any way contesting or affecting the validity of the Notes or any proceedings of the District taken with respect to the issuance or sale thereof.

LEGAL MATTERS

Legal matters incident to the authorization and issuance of the Notes are subject to the unqualified approving legal opinion of Quarles & Brady LLP, Bond Counsel. Such opinion will be issued on the basis of the law existing at the time of the issuance of the Notes. A copy of such opinion will be available at the time of the delivery of the Notes.

MUNICIPAL BANKRUPTCY

Municipalities are prohibited from filing for bankruptcy under Chapter 11 (reorganization) or Chapter 7 (liquidation) of the U.S. Bankruptcy Code (11 U.S.C. §§ 101-1532) (the "Bankruptcy Code"). Instead, the Bankruptcy Code permits municipalities to file a petition under Chapter 9 of the Bankruptcy Code, but only if certain requirements are met. These requirements include that the municipality must be “specifically authorized” under State law to file for relief under Chapter 9. For these purposes, "State law" may include, without limitation, statutes of general applicability enacted by the State legislature, special legislation applicable to a particular municipality, and/or executive orders issued by an appropriate officer of the State's executive branch.

As of the date hereof, Wisconsin law contains no express authority for municipalities to file for bankruptcy relief under Chapter 9 of the Bankruptcy Code.

Nevertheless, there can be no assurance (a) that State law will not change in the future, while the Notes are outstanding, in a way that would allow the District to file for bankruptcy relief under Chapter 9 of the Bankruptcy Code; or (b) even absent such a change in State law, that an executive order or other executive action could not effectively authorize the District to file for relief under Chapter 9. If, in the future, the District were to file a bankruptcy case under Chapter 9, the relevant bankruptcy court would need to consider whether the District could properly do so, which would involve questions regarding State law authority as well as other questions such as whether the District is a municipality for bankruptcy purposes. If the relevant bankruptcy court concluded that the District could properly file a bankruptcy case, and that determination was not reversed, vacated, or otherwise substantially altered on appeal, then the rights of holders of the Notes could be modified in bankruptcy proceedings. Such modifications could be adverse to holders of the Notes, and there could ultimately be no assurance that holders of the Notes would be paid in full or in part on the Notes. Further, under such circumstances, there could be no assurance that the Notes would not be treated as general, unsecured debt by a bankruptcy court, meaning that claims of holders of the Notes could be viewed as having no priority over claims of other creditors of the District.

RATING

This issue has been assigned a “Aa2” rating by Moody's Investors Service, Inc. Such rating reflects only the views of such organization and explanations of the significance of such rating may be obtained from the rating agency furnishing the same. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that such rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by such rating agency, if in the judgment of such rating agency circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Notes.

Such rating is not to be construed as a recommendation of the rating agency to buy, sell or hold the Notes, and the rating assigned by the rating agency should be evaluated independently. Except as may be required by the Undertakings described under the heading “Continuing Disclosure” neither the District nor the Underwriter undertakes responsibility to bring to the attention of the owners of the Notes any proposed change in or withdrawal of such rating or to oppose any such revision or withdrawal.

FINANCIAL ADVISOR

Robert W. Baird & Co., Milwaukee, Wisconsin has acted as Financial Advisor to District in connection with the issuance of the Notes.

MISCELLANEOUS

Any statement made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized.

Bond Counsel has not assumed responsibility for this Official Statement or participated in its preparation (except with respect to the section entitled "Tax Exemption") and has not performed any investigation as to its accuracy, completeness or sufficiency.

The execution and delivery of this Official Statement by its Secretary has been duly authorized by the District.

In accordance with the Rule, the Preliminary Official Statement is deemed final except for the omission of certain information described in the Rule.

AUTHORIZATION

This Official Statement has been approved for distribution to prospective purchasers and the Underwriter of the Notes. The District, acting through its District Secretary, will provide to the Underwriter of the Notes at the time of delivery of the Notes, a certificate confirming to the Underwriter that, to the best of its knowledge and belief, the Official Statement with respect to the Notes, together with any supplements thereto, at the time of acceptance of the adoption of the Award Resolution and at the time of delivery of the Notes, was true and correct in all material respects and did not at any time contain an untrue statement of a material fact or omit to state a material fact required to be stated, where necessary to make the statements in light of the circumstances under which they were made, not misleading.

BLACKHAWK TECHNICAL COLLEGE DISTRICT

By/s/ District Secretary

APPENDIX A

GENERAL PURPOSE FINANCIAL STATEMENTS AND RELATED NOTES

BLACKHAWK TECHNICAL COLLEGE DISTRICT

Rock and Green Counties, Wisconsin

For year ended June 30, 2012

And

DRAFT for the year ended June 30, 2013

Wipfli LLP, Eau Claire, Wisconsin

A copy of the District's Basic Financial Statements and Related Notes for the fiscal year ended June 30, 2012 and DRAFT for the year ended June 30, 2013, including the accompanying independent auditor’s report, is included as Appendix A to this Official Statement. Potential purchasers should read such financial statements in their entirety for more complete information concerning the District's financial position. Such financial statements have been audited by the Auditor, to the extent and for the periods indicated thereon. The District has not requested the Auditor to perform any additional examination, assessment or evaluation with respect to such financial statements since the date thereof, nor has the District requested that the Auditor consent to the use of such financial statements in this Official Statement. Although the inclusion of the financial statements in this Official Statement is not intended to demonstrate the fiscal condition of the District since the date of the financial statements, in connection with the issuance of the Notes, the District represents that there has been no material adverse change in the financial position or results of operations of the District, nor has the District incurred any material liabilities, which would make such financial statements misleading.

Blackhawk Technical College District

Financial Statements and Single Audit Years Ended June 30, 2012 and 2011

Table of Contents

Blackhawk Technical College Independent Auditor’s Report...... 1 District Management’s Discussion and Analysis...... 3 Janesville, Wisconsin Basic Financial Statements Statements of Net Assets...... 11 Financial Statements and Single Audit Statements of Revenues, Expenses, and Changes in Net Assets...... 12 Years Ended June 30, 2012 and 2011 Statements of Cash Flows ...... 13 Statements of Fiduciary Net Assets – Blackhawk Technical College Postemployment Benefits Trust ...... 15 Statements of Changes in Fiduciary Net Assets – Blackhawk Technical College Postemployment Benefits Trust ...... 16 Notes to the Basic Financial Statements...... 17 Required Supplementary Information Schedules of Funding Progress and Employer Contributions ...... 45 Note to Required Supplementary Information ...... 46 Blackhawk Technical College District Blackhawk Technical College District

Financial Statements and Single Audit Financial Statements and Single Audit Years Ended June 30, 2012 and 2011 Years Ended June 30, 2012 and 2011

Table of Contents (Continued) Table of Contents (Continued)

Supplementary Financial Information Single Audit Section General Fund Independent Auditor’s Report on Internal Control Over Financial Reporting Schedule of Revenues, Expenditures, and Changes in Fund Balance and on Compliance and Other Matters Based on an Audit of Financial Statements – Budget and Actual (Non-GAAP Budgetarjy Basis)...... 47 Performed in Accordance with Government Auditing Standards...... 59 Special Revenue Fund – Operating Independent Auditor’s Report on Compliance With Requirements That Could Schedule of Revenues, Expenditures, and Changes in Fund Balance Have a Direct and Material Effect on Each Major Federal and State Program and – Budget and Actual (Non-GAAP Budgetary Basis) ...... 48 Internal Control Over Compliance in Accordance With OMB Circular A-133 ...... 61 Special Revenue Fund – Non-Aidable Funds Schedule of Expenditures of Federal Awards ...... 63 Schedule of Revenues, Expenditures, and Changes in Fund Balance Schedule of Expenditures of State Awards ...... 67 – Budget and Actual (Non-GAAP Budgetary Basis) ...... 49 Notes to the Schedules of Expenditures of Federal and State Awards ...... 71 Capital Projects Fund Schedule of Findings and Questioned Costs ...... 73 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual (Non-GAAP Budgetary Basis) ...... 50 Statistical Section (Unaudited) Debt Service Fund Financial Trends

Schedule of Revenues, Expenditures, and Changes in Fund Balance Net Assets by Component ...... 79

– Budget and Actual (Non-GAAP Budgetary Basis) ...... 51 Changes in Net Assets ...... 80 Enterprise Funds Revenue Capacity

Schedule of Revenues, Expenditures, and Changes in Fund Equity Equalized Value of Taxable Property...... 81

– Budget and Actual (Non-GAAP Budgetary Basis) ...... 52 Direct and Overlapping Property Tax Rates ...... 82 Property Tax Levies and Collections ...... 83 Internal Service Funds Principal Property Taxpayers...... 84 Schedule of Revenues, Expenditures, and Changes in Fund Equity Enrollment Statistics – Historical Comparisons...... 85 – Budget and Actual (Non-GAAP Budgetary Basis) ...... 53 Debt Capacity Schedule to Reconcile the Non-GAAP Budgetary Combined Balance Sheet Ratio of Net Debt to Equalized Valuation and Debt per Capita...... 86 – All Fund Types to the Statement of Net Assets - June 30, 2012...... 54 Direct and Overlapping Debt...... 87 Schedule to Reconcile the Non-GAAP Budgetary Basis Financial Statements to the Legal Debt Margin Information...... 91 Statement of Revenues, Expenditures, and Changes in Fund Balance - June 30, 2012 ..... 55 Demographic and Economic Information Schedule to Reconcile the Non-GAAP Budgetary Combined Balance Sheet Demographic and Economic Statistics...... 92

– All Fund Types to the Statement of Net Assets - June 30, 2011...... 57 Principal Employers ...... 93 Schedule to Reconcile the Non-GAAP Budgetary Basis Financial Statements to the Operating Information Statement of Revenues, Expenditures, and Changes in Fund Balance - June 30, 2011 ..... 58 Full-Time Equivalent District Employees by Employee Group...... 94 Operational Expenditures per Full-Time Equivalent (FTE) Student ...... 95 Campus Statistics ...... 96

The Management’s Discussion and Analysis, on pages 3 through 10, is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation Independent Auditor’s Report of the required supplementary information. However, we did not audit the information and express no opinion on it. Blackhawk Technical College District has not presented comparative Management’s Discussion and Analysis for the year ended June 30, 2011, that the Governmental Accounting Standards Board has determined is necessary to supplement, although not required to be a part of, the 2012 financial statements. District Board Blackhawk Technical College District The schedules of funding progress and employer contributions on page 46 are not a required Janesville, Wisconsin part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and We have audited the accompanying financial statements of Blackhawk Technical College presentation of the required supplementary information. However, we did not audit the District, (the “College”) as of and for the years ended June 30, 2012 and 2011, as listed in the information and express no opinion on it. table of contents. These financial statements are the responsibility of the College’s management. Our responsibility is to express opinions on these financial statements based on Our audit was made for the purpose of forming opinions on the financial statements that our audit. collectively comprise the College’s basic financial statements. The 2012 budgetary comparison schedules listed in the table of contents as supplementary information are presented for We conducted our audit in accordance with auditing standards generally accepted in the United purposes of additional analysis and are not a required part of the basic financial statements. States and the standards applicable to financial audits contained in Government Auditing The accompanying schedules of expenditures of federal and state awards are presented for Standards, issued by the Comptroller General of the United States. Those standards require purposes of additional analysis as required by U.S. Office of Management and Budget Circular Audits of States, Local Governments, and Non-Profit Organizations State Single that we plan and perform the audit to obtain reasonable assurance about whether the financial A-133, and Audit Guidelines statements are free of material misstatement. An audit includes examining, on a test basis, , issued by the Wisconsin Department of Administration and are not a required evidence supporting the amounts and disclosures in the financial statements. An audit also part of the basic financial statements. Such information is the responsibility of management and includes assessing the accounting principles used and significant estimates made by was derived from and relates directly to the underlying accounting and other records used to management, as well as evaluating the overall financial statement presentation. We believe prepare the financial statements. The information has been subjected to the auditing that our audit provides a reasonable basis for our opinion. 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 In our opinion, the financial statements referred to above present fairly, in all material respects, other records used to prepare the financial statements or to the financial statements the financial position of the Blackhawk Technical College District as of June 30, 2012 and 2011, themselves, and other additional procedures in accordance with auditing standards generally and its changes in financial position and cash flows for the years then ended, in conformity with accepted in the United States. In our opinion, the 2012 budgetary comparison schedules and accounting principles generally accepted in the United States. the schedules of expenditures of federal and state awards are fairly stated in all material respects in relation to the financial statements as a whole. In accordance with Government Auditing Standards, we have also issued a report dated November 26, 2012, on our consideration of the Blackhawk Technical College District’s internal The “Statistical Section” listed in the accompanying table of contents, which is the responsibility control over financial reporting and on our tests of its compliance with certain provisions of laws, of management, is presented for purposes of additional analysis and is not a required part of the regulations, contracts, and grant agreements and other matters. The purpose of that report is to basic financial statements. The information has not been subjected to the auditing procedures describe the scope of our testing of internal control over financial reporting and compliance and applied in the audit of the basic financial statements and, accordingly, we do not express an the results of that testing, and not to provide an opinion on the internal control over financial opinion or provide any assurance on it. reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our /s/ Wipfli LLP audit. Wipfli LLP

November 26, 2012 Eau Claire, Wisconsin

1 2

Blackhawk Technical College District

Management’s Discussion and Analysis Years Ended June 30, 2012 and 2011

Overview

Blackhawk Technical College District (BTC or “College”) Management’s Discussion and Analysis (MD&A) of its financial condition provides an overview of financial activity, identifies changes in financial positions, and assists the reader of these financial statements in focusing on noteworthy financial issues for the year ending June 30, 2012. Management’s Discussion and Analysis BTC is a public institution of higher education whose mission is to provide quality education, training and economic development services to Rock and Green counties. To accomplish this mission, it is critical that BTC maintain a healthy financial position for the long term. BTC’s goal is to accumulate sufficient net assets to ensure adequate reserves are available to accomplish this mission, whether it is to implement new programs or to expand existing programs.

This annual financial report consists of a series of financial statements, prepared in accordance with generally accepted accounting principles (GAAP), as defined in the Governmental Accounting Standards Board Statement 34, Basic Financial Statements-and Management’s Discussion and Analysis-for State and Local Governments, and Statement 35, Basic Financial Statements-and Management’s Discussion and Analysis-for Public Colleges and Universities.

Statement of Revenues, Expenses, and Changes in Net Assets

The Statement of Revenues, Expenses, and Changes in Net Assets presents the revenues earned and expenses incurred during the year. Activities are reported as either operating or non-operating depending upon the nature of the activity. In general, a public college such as BTC will report an operating deficit or loss, as GAAP classifies state appropriations and property taxes as non-operating revenues. Revenues received from taxpayers in the form of tax levies and state aid appropriations are considered non-operating revenues and will reduce the operating deficit or loss or provide a net gain.

The following summary shows a condensed version of the Statement of Revenues, Expenses, and Changes in Net Assets:

Increase (Decrease) 2012 2011 Amount %

Operating Revenue $16,648,203 $17,931,771 ($1,283,568) (7.2)

Operating Expenses 38,774,616 41,016,893 (2,242,277) (5.5)

Non-Operating Revenues (Expenses) net 22,736,663 24,021,196 (1,284,533) (5.3)

Increase in Net Assets $ 610,250 $ 936,074 ($325,824) (34.8)

3 Statement of Revenues, Expenses, and Changes in Net Assets (Continued) Statement of Revenues, Expenses, and Changes in Net Assets (Continued)

Operating Revenues Non-Operating Revenue and Expenses

Operating revenues are the charges for services offered by the College. During 2012, the College Non-operating revenues and expenses are revenue and expense items not directly related to providing generated $16,648,203 of operating revenue. This is a decrease of $1,283,568 from 2011 or -7.2 instruction. Net non-operating revenues (expenses) decreased $1,284,533 or -5.4%. Important factors percent. Significant changes between years are as follows: driving this net decrease are as follows: x Student tuition and fees decreased by $1,234,299 or -19.1% due primarily to the increase in financial x State operating appropriations (General State Aid) decreased $1,276,454 or -26.9% due to a 30% aid applied to student tuition and fee charges. Student financial aid is reported as grant revenue. reduction in state funding for Wisconsin technical colleges. State operating appropriations are Accounting rules do not allow the double recording of revenue; therefore, tuition and fee revenues do allocated among the 16 technical colleges on a formula basis with Blackhawk Technical College not include student financial aid applied to tuition and fee charges. Student aid applied to tuition and receiving a slight increase in allocated funding, thereby partially offsetting the 30% reduction in state fees charges increased 35% from $2,444,386 in 2011 to $3,302,647 in 2012. A 9.4% decline in appropriations. enrollment also contributed to the decrease in tuition and fee revenue. x Investment income decreased by $32,181 or -39.7% due to lower interest rates on cash and x State aid revenue increased by $330,831 or 23.3% due to additional grant funding for health investments. sciences programming, workforce development training, and youth apprenticeship support. x Loss on disposal of property and equipment increased by $84,548. This is primarily attributed to the x Federal grant revenue decreased by $333,520 or 3.9% primarily due to the expiration of the career disposal of equipment not fully depreciated and the impairment of assets used specifically in the and technical education, Perkins career preparation, and even start grants. delivery of programs and services that were eliminated or suspended. x Contract revenue decreased by $102,620 or -14.7% due to a reduction in high school contracts x Interest expense decreased $64,478 or – 7.7% due to the retirement of debt and lower interest rates ($146,440) which was offset by an increase in other contract and customized training activity. on recent bond issues.

Operating Expenses Statement of Net Assets

Operating expenses are costs related to the programs offered by the college. During 2012, total The Statement of Net Assets includes all assets (items that the College owns and amounts owed to the operating expenses decreased by $2,242,277 or -5.5% from the prior year. Major factors contributing to College by others) and liabilities (amounts the College owes to others and what has been collected from this decrease are as follows: others before the College has provided the services). This statement is prepared under the accrual basis of accounting, whereby revenues and assets are recognized when the service is provided, and expenses and liabilities are recognized when others have provided the service to us, regardless of when cash is x Instruction expenses decreased by $1,110,526 or -5.5%, due to reduced instructional staffing exchanged. partially offset by an increase in equipment expenses. x Instructional resource expenses are up $104,310 or 4%, due to an increase in equipment purchases that are below the threshold for capitalization and are therefore expensed; offset by a reduction in personnel, contractual services, and supply expenses. x Student services expenses decreased $152,021 or -3.6%, due to a reduction in professional and contractual services. x General institutional expenses decreased $134,180 or -2.4% due to a reduction in other post- employment benefit expenses, offset by an increase in equipment purchase expenses. x Physical plant expenses decreased by $163,089 or -7% due to a reduction in contractual services, energy consumption, and capital improvements expensed. x Student aid expenses decreased by $723,909 or -15.9% due to an increase in the amount of aid applied to tuition and fees resulting in less excess aid available for disbursement to students.

4 5 Statement of Net Assets (Continued) Statement of Net Assets (Continued)

Below are highlights of the components of the Statement of Net Assets: Liabilities

Increase (Decrease) Total liabilities decreased by $1,535,508 or -6.1%. Factors driving this decrease are as follows: 2012 2011 Amount % x Current liabilities decreased by $1,306,518 or -16.0%. The current portion of long term debt ASSETS decreased $410,000 due to the retirement of debt, while deferred student enrollment revenue Cash, cash equivalents and investments $11,085,568 $11,198,188 ($112,620) (1.0) decreased $805,477 due largely to the reduction in summer and early fall enrollment. Accounts Receivables 7,666,047 8,694,746 (1,028,699) (11.8) payable and accrued liabilities decreased $190,570 due to reduced wages and the timing of Net capital assets 28,557,675 27,967,911 589,764 2.1 payments, while funds due to students and other groups increased $99,529 due to student club Other assets 3,825,870 4,199,573 (373,703) (8.9) revenues exceeding expenditures. Total Assets 51,135,160 52,060,418 (925,258) (1.8) x Long-term liabilities decreased by $228,990 or -1.3% due to the retirement of debt offset by a new bond issue.

LIABILITIES Net Assets Current liabilities 6,860,198 8,166,716 (1,306,518) (16.0) Long-term liabilities 16,762,445 16,991,435 (228,990) (1.3) The changes in assets and liabilities as described above resulted in total net assets being increased by Total Liabilities 23,622,643 25,158,151 (1,535,508) (6.1) $610,250 or 2.3%. Additional information regarding these changes is:

x Invested in capital assets, net of related debt increased by $777,586 or 6.0%. The primary reason NET ASSETS for this increase is the retirement of debt. Invested in capital assets, net of x Restricted net assets increased by $61,727 or 10.3% due to low interest rate savings offset by a related debt 13,773,483 12,995,897 777,586 6.0 planned reduction in trust fund net assets. Restricted 659,755 598,028 61,727 10.3 Unrestricted 13,079,279 13,308,342 (229,063) (1.7) x Unrestricted net assets decreased by $229,063 or -1.7% due to the planned reduction of net assets Total Net Assets $27,512,517 $26,902,267 $ 610,250 2.3 to support one-time or limited duration expenses.

Statement of Cash Flows Assets The Statement of Cash Flows presents information related to cash inflows and outflows, summarized by Total assets decreased by $925,258, or -1.8%. Significant factors driving this decrease are as follows: operating, financing, capital and investing activities. This statement is important in evaluating the College’s ability to meet financial obligations as they mature. x Cash, cash equivalents, and investments decreased by $112,620 or -1.0%. This decrease is the result of a reduction in liabilities partially offset by the collection of receivables, revenues exceeding The following schedule summarizes the major components of the Statement of Cash Flows: expenditures, and debt funded capital projects not completed by June 30, 2012. Increase (Decrease) x Receivables decreased by $1,028,699 or -11.8%. Property tax receivables declined $125,048 due to 2012 2011 Amount % the timing of property owner payments, federal and state aid declined $141,980 due largely to the timely of reimbursement for state and federal grant expenditures, and other receivables decreased Net cash used for operating activities $(20,625,538) $(25,511,846) $4,886,308 19.2 $761,671 due primarily to reduced student registrations by fiscal year end. Net cash provided by non-capital x Post-employment benefits decreased from $4,171,593 in 2011 to $3,580,670 in 2012 due to annual financing activities 23,693,492 25,236,693 (1,543,201) (6.1) benefit cost exceeding the current contribution to the other post-employment benefits (OPEB) trust. Net cash provided by (used in) x Net capital assets increased by $589,764 or 2.1% due to capital asset additions exceeding capital and related financing activities (3,229,465) 1,321,082 (4,550,547) (344.5) depreciation charges and asset disposals. Net cash flow provided by (used in) investing activities 1,932,867 1,580,875 351,992 22.3 Net increase (decrease) in cash and cash equivalents $1,771,356 $2,626,804 ($855,448) (32.6)

6 7 Statement of Cash Flows (Continued) OPEB x Cash and cash equivalents increased by $1,771,356 in 2012, and by $2,626,804 in 2011. Cash, cash In 2008 the College started funding its obligations under Governmental Accounting Standards Board equivalents, and investments decreased by $112,620 or -1.0%. This decrease is the result of a (GASB) Statement No. 45 which requires the College to recognize the expense of other post- reduction in liabilities partially offset by the collection of receivables, revenues exceeding employment benefits when the benefit is earned rather than when it is paid. The College is amortizing expenditures, and debt funded capital projects not completed by June 30, 2012. prior service costs over a thirty year period. The issues of funding the obligation and the impact on general fund balance were a significant budgetary and financial reporting concern. The College issued $5,175,000 in bonds in September 2010, to partially fund the other post-employment benefit liability. Capital Asset and Debt Administration Under the latest actuarial study completed for June 30, 2011, the actuarial accrued liability is $8,099,141 The College’s investment in capital assets includes land, land improvements, buildings and with funding of $6,880,656 leaving $1,218,485 to be funded in the future. Recognizing the long-term improvements, equipment, leasehold improvements and construction in progress. On a GAAP basis, the nature of these funds and the need for a return on investment of plan assets, the College appointed an College added $3,089,433 to capital assets during 2012, including the transfer of $1,165,766 from Investment Advisor to manage the investment of the plan assets in accordance with the adopted construction in progress to leasehold and building improvements and equipment, and retired net capital Investment Policy. The long term investment return on plan assets is expected to bring the actuarial assets of $104,599 in equipment, land, and building improvements during the year. The College finances accrued liability to full funding. The College expects to continue funding the current service costs within the bulk of its capital assets through the issuance of debt. In 2012, the College incurred new debt in the the operational budget. amount of $3,300,000 for capital assets and facility improvements, and retired debt in the amount of $3,940,000 for a net decrease of $640,000. The College continues to maintain a Moody’s Investors Economic Factors Service Aa2 rating, and continues to meet all of its debt service requirements. Wisconsin state statutes limit the amount of aggregate and bonded indebtedness that the College can incur. The amount of debt The College’s district covers most of Rock and Green County. The College’s tax base decreased 2.36% outstanding falls well below these thresholds. in 2011 following the 2010 decline of 4.15%. The College’s tax base is now below 2007 valuations with no expectation of growth in the near term. The local economy continues to struggle after General Motors Financial Position closed their Janesville plant in 2009 putting 2,600 employees out of work. In addition, there have been other businesses that have downsized due to either losing business to General Motors or indirectly due The College has a variety of funding sources including property taxes, state aid, student fees, business to unemployed workers having less money to spend. In August 2012, Beloit had an unemployment rate and industry contract fees, investment income, federal and state grants and other sources to meet the of 11.8% and Janesville had 9.2% while the state of Wisconsin had 7.1% and the country had 8.2%. The expenses of the College. The State’s 2011-13 budget bill as signed into law reduces general aid to the top three industries in Rock County include medical services, educational services and government. In Wisconsin Technical College System by 30% and imposes further restrictions on the District’s levy Green County, the top industries are manufacturing, health care, and educational services. authority. Districts remain subject to the 1.5 mill rate cap; however, the budget bill as adopted freezes the operational levy at the greater of the dollar amount levied in 2010 or the mill rate levied in 2010. This The counties are striving to diversify the local economy through the attraction and expansion of industrial freeze on the operational levy will sunset on July 1, 2013. and commercial business and industry. Four companies recently announced plans to locate in Rock County making a capital investment of $240 million and creating nearly 400 new jobs by 2014. In Public Act 10, which impacted the collective bargaining rights of most public sector employees, limited addition, a number of existing manufacturers have announced expansion plans with additional capital the College’s contribution to health and retirement benefit plans administered by the State. The cost investment and the creation of new jobs in Rock County. The College’s District is positioned for savings from Act 10 were expected to offset the reduction in general state aid; however, the College economic recovery and the College is dedicated to serving the vital role of providing a qualified, skilled experienced a significant budget gap in fiscal year 2011-12 as a result of Act 10. To close this gap, the workforce to meet the needs of new and existing business and industry. College reduced operational expenses by suspending academic programs and eliminating services. Challenges

The College experienced 54% enrollment growth over a two-year period beginning in 2008, as a result of the General Motors plant closure. The demand for educational and training services remains high four years after GM’s announcement of the planned closure. The College has partnered with economic development leaders to position Rock and Green County as an attractive location for business and industry. The College collaborates with local business and industry to ensure educational programming and training services are relevant and effective in meeting the workforce needs of the community. The College must continue to investment in our facilities and equipment to ensure that student learning is in sync with the technologies employed in the workplace. Funding these operational and capital needs is a significant challenge given the loss of state support and the freeze on operational levies. Despite these resource challenges, the College strives to support advancing the local economy through workforce development and improving the lives of area citizens seeking to acquire valued, marketable work skills.

8 9 Requests for Information

This financial report is designed to provide a general overview of the College’s financial picture for those interested parties. Questions concerning any information contained in this report or for any additional information should be addressed to the Vice President of Finance and College Operations, 6004 S County Road G, PO Box 5009, Janesville, WI 53547-5009.

Basic Financial Statements

10 Blackhawk Technical College District

Statements of Net Assets June 30, 2012 and 2011

2012 2011 2012 2011

ASSETS LIABILITIES Current assets Current liabilities Cash and cash equivalents $ 5,318,324 $ 3,546,968 Accounts payable and accrued liabilities $ 678,716 $ 644,566 Investments 5,767,244 7,651,220 Other accrued liabilities 1,759,852 1,970,301 Receivables: Accrued interest payable 165,764 180,035 Property taxes 6,073,658 6,198,706 Deferred revenue - other 137,841 943,318 Federal and state aid 971,025 1,113,005 Due to students and other groups 688,025 588,496 Accounts and other, net reserve of Current portion of long-term obligations 3,430,000 3,840,000 $150,000 at 2012 and 2011 621,364 1,383,035 Total current liabilities 6,860,198 8,166,716 Prepaid expenses 245,200 27,980 Long-term obligations, less current portion Total current assets 18,996,815 19,920,914 General obligation debt payable 16,735,000 16,965,000 Deferred premium on general obligation debt 27,445 26,435 Noncurrent assets Total long-term obligations, less current portion 16,762,445 16,991,435 Net OPEB asset 3,580,670 4,171,593 Total liabilities - 23,622,643 25,158,151 Capital assets 43,681,039 42,327,193 Less: accumulated depreciation 15,123,364 14,359,282 NET ASSETS Investment in capital assets, net of related debt 13,773,483 12,995,897 Total capital assets, net of depreciation 28,557,675 27,967,911 Restricted for: Debt service 546,942 458,951 Student financial assistance 112,813 139,077 Unrestricted 13,079,279 13,308,342

Total net assets 27,512,517 26,902,267

$51,135,160 $ 52,060,418 Total assets $ 51,135,160 $ 52,060,418

See accompanying notes to financial statements. 11 Blackhawk Technical College District Blackhawk Technical College District

Statements of Revenues, Expenses, and Changes in Net Assets Statements of Cash Flows For the Year Ended June 30, 2012 and 2011 For the Year Ended June 30, 2012 and 2011

2012 2011 2012 2011 Cash flows from operating activities Operating revenues Tuition and fees received $ 5,152,022 $ 6,362,033 Student tuition and program fees, net of scholarship allowances Federal and state grants received 9,859,721 9,847,985 of $3,302,647 in 2012 and $2,444,386 in 2011$ 5,221,994 $ 6,456,293 Contract revenues 862,454 1,047,550 State aids 1,750,700 1,419,869 Payments to employees (24,822,659) (29,650,256) Federal grants 8,135,545 8,469,065 Payments for materials and services (12,597,248) (14,033,630) Contract revenue 594,867 697,487 Auxiliary enterprise revenues 282,914 247,241 Auxiliary enterprise revenue 282,914 247,241 Other receipts 637,258 667,231 Miscellaneous - institutional revenue 662,183 641,816 Net cash used for operating activities (20,625,538) (25,511,846) Total operating revenues 16,648,203 17,931,771 Cash flows from noncapital financing activities Local government property taxes received 20,230,109 20,496,856 Operating expenses State appropriations received 3,463,383 4,739,837 Instruction 19,169,314 20,279,840 Instructional resources 2,704,827 2,600,517 Net cash provided by noncapital financing activities 23,693,492 25,236,693 Student services 4,032,577 4,184,598 General institutional 5,412,688 5,546,868 Cash flows from capital and related financing activities Physical plant 2,170,602 2,333,691 Purchases of capital assets (1,800,130) (742,308) Student aid 3,807,513 4,531,422 Proceeds from issuance of capital debt 3,300,000 6,925,000 Auxiliary services 247,789 324,500 Principal paid on capital debt (3,940,000) (4,035,000) Depreciation 1,229,306 1,215,457 Interest paid on capital debt (789,335) (826,610)

Net cash provided by (used for) capital and Total operating expenses 38,774,616 41,016,893 related financing activities (3,229,465) 1,321,082

Operating loss (22,126,413) (23,085,122) Cash flows from investing activities Purchase of Investments (1,631,533) (9,721,341) Nonoperating revenues (expenses) Sale of Investments 3,515,509 11,221,144 Property taxes 20,105,061 20,060,889 Investment income received 48,891 81,072 State operating appropriations 3,463,383 4,739,837 Investment income 48,891 81,072 Net cash provided by investing activities 1,932,867 1,580,875 Loss on disposal of property and equipment (104,598) (20,050) Interest expense (776,074) (840,552) Net increase in cash and cash equivalents 1,771,356 2,626,804

Total nonoperating revenues 22,736,663 24,021,196 Cash and cash equivalents Beginning of year 3,546,968 920,164 Increase in net assets 610,250 936,074 End of year $ 5,318,324 $ 3,546,968 Net assets - beginning of year 26,902,267 25,966,193 Non-cash capital and related financing activities Net assets - end of year $ 27,512,517 $ 26,902,267 Loss on disposal of capital assets $ 104,598 $ 20,050

See accompanying notes to financial statements. 12 13 Blackhawk Technical College District Blackhawk Technical College District

Statements of Cash Flows (Continued) Statements of Fiduciary Net Assets – For the Year Ended June 30, 2012 and 2011 Blackhawk Technical College Post-employment Benefits Trust June 30, 2012 and 2011 2012 2011 Reconciliation of operating loss to net cash 2012 2011 used for operating activities: Operating loss $ (22,126,413) $ (23,085,122) ASSETS Adjustment to reconcile operating loss to net cash used for operating activities: Current Assets Depreciation 1,229,306 1,215,457 Cash and cash equivalents $ 19,723 $ 19,560 Changes in assets and liabilities: Short-term investments 232,206 162,425 Receivables 903,651 (96,798) Prepaid expenditures (217,220) (7,237) Total Current Assets 251,929 181,985 Accounts payable and accrued liabilities (89,388) 286,588 Other accrued liabilities (210,449) (11,052) Long Term Assets Due to students and other groups 99,529 188,290 Equity investments 6,726,099 6,698,671 Post-employment benefits 590,923 (4,339,488) Deferred revenue - other (805,477) 337,516 Total Assets $ 6,978,028 $ 6,880,656

Net cash used for operating activities $ (20,625,538) $ (25,511,846) LIABILITIES

Current Liabilities $ 25,170 $ -

Total Liabilties 25,170 -

NET ASSETS

Held in trust for post-employment benefits 6,952,858 6,880,656

Total Net Assets $ 6,952,858 $ 6,880,656

See accompanying notes to financial statements. 14 See accompanying notes to financial statements. 15 Blackhawk Technical College District Blackhawk Technical College District

Statements of Changes in Fiduciary Net Assets – Notes to the Basic Financial Statements Blackhawk Technical College Post-employment Benefits Trust June 30, 2012 and 2011 Note 1 Summary of Significant Accounting Policies 2012 2011 ADDITIONS Introduction

Contributions Introduction: Blackhawk Technical College District (the College) is organized under Blackhawk Technical College $ 406,463 $ 5,581,463 state legislation enacted in 1911 establishing vocational, technical, and adult education. The goals of the College are to train people for employment in a system Investment income (loss) flexible enough to permit adjustment to meet the needs of the community, with Interest 378 6,544 programs offered on a part-time, full-time, day and evening basis. Dividends 220,782 126,419 Capital gains (losses) - realized (601) 265,241 The geographic area of the College is comprised of most of Rock County and the Capital gains (losses) - unrealized (158,583) 97,309 majority of Green County in south central Wisconsin. There are 52 municipalities with an estimated population of 190,040 and 13 public school districts within the College’s boundaries. The district contains 1,200 square miles and operates campuses located Total investment income 61,976 495,513 in the cities of Beloit, Janesville and Monroe as well as an aviation center at the South Central Wisconsin Regional Airport and learning centers in the surrounding Total additions 468,439 6,076,976 communities.

DEDUCTIONS The governing body of the College is the College Board, which consists of nine members. The members are appointed to staggered three-year terms by the County Retiree benefits 362,230 401,335 Board chairpersons for Rock and Green counties, who meet once a year to appoint Investment expense 2,696 11,752 members to the three open seats. The College Board membership includes two Administrative expense 31,311 7,485 employers, two employees, three additional members, one school district administrator and one elected official who holds a state or local office. The College Board powers are Total deductions 396,237 420,572 established under the provisions of Chapter 38 of the Wisconsin Statutes and include: x Authority to borrow money and levy taxes; Change in Net Assets 72,202 5,656,404 x Budgetary authority; and NET ASSETS HELD IN TRUST FOR x Authority over other fiscal and general management of the College which POST-EMPLOYMENT BENEFITS includes, but is not limited to, the authority to execute contracts, to exercise control over facilities and properties, to determine the outcome or disposition of Beginning of year 6,880,656 1,224,252 matters affecting the recipients of the services being provided, and to approve the hiring or retention of key management personnel who implement Board End of year $ 6,952,858 $ 6,880,656 policy and directives.

The College is approved to offer 49 associate degree and technical diploma programs. These include 24 associate degree, 4 two-year technical diploma, 10 one-year technical diploma, 6 less-than-one-year technical diploma, and 5 apprenticeship programs. In addition, the College offers various advanced technical programs, basic skills education, and adult continuing education.

See accompanying notes to financial statements. 16 17 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 1 Summary of Significant Accounting Policies (Continued) Note 1 Summary of Significant Accounting Policies (Continued)

Introduction (Continued) Basis of Accounting and Financial Statement Presentation

The accounting policies of the College conform to accounting principles generally For financial statement reporting purposes, the College is considered a special- accepted in the United States of America (GAAP) as applicable to public colleges and purpose government engaged only in business-type activities. Accordingly, the basic universities as well as those prescribed by the Wisconsin Technical College System financial statements of the College have been prepared on the accrual basis of (WTCS). The College reports are based on all applicable Governmental Accounting accounting, whereby all revenues are recorded when earned, and all expenses are Standards Board (GASB) pronouncements. recorded when incurred. This basis of accounting also requires the College to record depreciation expense related to capital assets to spread the cost of these assets to the The following is a summary of the more significant policies. estimated period benefiting from them.

Reporting Entity Operating revenues and expenses generally result from providing educational services or producing and delivering goods in connection with the College’s ongoing operations. Amounts reported as operating revenues include (1) student tuition and fees, (2) The basic financial statements include all the accounts of all operations of the charges to customers for goods or services provided, (3) state and federal operating College’s reporting entity as governed by its Board. The College’s reporting entity is grants, and (4) contracts with business and industry or school districts. Operating based upon the criteria set forth by the GASB Statement No. 14, The Financial expenses include all instructional and administrative expenses, and depreciation on Reporting Entity, as amended by GASB Statement No. 39, Determining Whether capital assets. All revenues and expenses not meeting this definition are reported as Certain Organizations are Component Units, and includes all related organizations for non-operating revenues and expenses. which the College exercises financial accountability. The manifestations of financial accountability include the ability to appoint a voting majority of an organization’s governing board, the ability to significantly influence operations, and accountability for Budgets and Budgetary Accounting fiscal matters. The College’s internal records are maintained on a fund basis as required by the The College is affiliated with the Blackhawk Technical College Foundation, Inc. WTCS. The College follows the procedures listed below in adopting the annual (Foundation), a not-for-profit corporation whose purpose is to solicit, hold, manage, budgets for all governmental fund types that are legally required. invest and expend endowment funds and other gifts, grants, and bequests exclusively for the maintenance and benefit of the College. The Foundation is managed by a 1. Property taxes are levied by the various taxing municipalities. The College records Director and an independent board of directors. The financial activities of the as revenue its share of the local tax in the year levied. Foundation are not included in the College’s financial statements as the College does not have the ability to significantly influence operations or designate management and 2. Public hearings are conducted on the proposed budget prior to District Board no significant interdependency exists. approval.

3. Prior to July 1, the budget is legally enacted through approval by the District Board.

4. Budget amendments during the year are legally authorized. Budget transfers (between funds and functional areas within funds) and changes in budgeted revenues and expenditures (appropriations) require approval by a vote of two-thirds of the entire membership of the District’s Board and require publishing a Class 1 public notice in the College’s official newspaper within ten days according to Wisconsin Statutes.

18 19 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 1 Summary of Significant Accounting Policies (Continued) Note 1 Summary of Significant Accounting Policies (Continued)

Budgets and Budgetary Accounting (Continued) Receivables and Credit Policies

5. Management exercises control over budgeted expenditures by fund and function as Receivables are uncollateralized obligations which generally are due upon receipt. presented in the accompanying basic financial statements. Expenditures may not Accounts receivable are stated at the invoice amount. Account balances with invoices exceed funds available or appropriated unless authorized by a resolution adopted over thirty days old are considered delinquent. Payments of accounts receivable are by a vote of two-thirds of the District Board. Unused appropriations lapse at the end applied to the specific invoices identified on the customers’ remittance advice or, if of each fiscal year. unspecified, to the earliest unpaid invoices.

6. Formal budgetary integration is employed as a planning device for all funds. The The carrying amount of accounts receivable is reduced by a valuation allowance that College adopts an annual operating budget that is prepared on a different basis reflects management’s best estimate of amounts that will not be collected. The from the basic financial statements, which are prepared in accordance with GAAP. allowance for doubtful accounts is based on management’s assessment of the The budget differs from GAAP by recognizing encumbrances as expenditures. collectibility of specific student accounts and the aging of accounts receivable. All Also, the budget does not incorporate changes related to GASB statements Nos. accounts or portions thereof deemed to be uncollectible are written off to the allowance 33, 34, and 35. for doubtful accounts.

Use of Estimates Prepaid Expenses

In preparing basic financial statements in conformity with GAAP, the College is Prepaid balances are for payments made by the College for which benefits extend required to make estimates and assumptions that affect the reported amounts of beyond June 30. assets and liabilities and the disclosure of contingent assets and liabilities at the date of the basic financial statements and the reported amounts of revenues and expenses Inventories during the reporting period. Actual results could differ from those estimates. The College does not maintain a significant amount of inventory and does not record Cash and Cash Equivalents inventory in its financial records.

Cash includes amounts in petty cash, demand deposits, and other short-term interest- Capital Assets bearing deposits. Capital assets are valued at historical cost or estimated historical cost if actual For purposes of the statement of cash flows, cash on hand, demand deposits with historical cost is not available. Donated capital assets are valued at their estimated fair financial institutions, investments in the Local Government Investment Pool (LGIP), value at the time of donation. and other short-term investments with maturity dates of less than ninety days from when purchased are considered cash equivalents. The costs of maintenance and repairs are charged to operations as incurred. Equipment assets having a cost of $5,000 or more per unit and building or remodeling projects of $15,000 or more are capitalized. Depreciation on buildings and equipment is provided in amounts sufficient to relate the cost of the depreciable assets to operations on the straight-line basis over the estimated service lives, which range from three to fifteen years for equipment, 20 years for site improvements, 50 years for remodeling, 50 years for buildings, and 65 years for infrastructures.

20 21 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 1 Summary of Significant Accounting Policies (Continued) Note 1 Summary of Significant Accounting Policies (Continued)

Property Taxes and Taxes Receivable Property Taxes and Taxes Receivable (Continued)

The District Board, under Section 38.16 of the Wisconsin Statutes, may levy a tax not The combined tax rate for the fiscal years ended June 30, 2012 and 2011, are as to exceed 1.5 mills on the full value of taxable property within the area served by the follows: College for the purposes of operating and maintaining schools. The mill rate limitation is not applicable to taxes levied for the purposes of paying principal and interest on 2012 2011 general obligation debt issued by the College that is used for capital improvements and Levy Levy equipment acquisitions. Mill Rate Amount Mill Rate Amount The College communicates its property tax levy to city, village, and town treasurers or Operating levy 1.41492$ 15,888,757 1.38149$ 15,888,757 clerks in October of the fiscal year for which the taxes are levied. The following dates Debt service levy 0.36945 4,148,765 0.34779 3,999,993 are pertinent to the College’s tax calendar: Total property tax levy $ 20,037,522 $ 19,888,750 Levy date October 31, or within 10 days of receipt of equalized valuation, whichever is later. Tax bills are mailed Month of December Other Employee Benefit Amounts Lien date January 1 Payments: Compensated Absences - College employees are granted vacation in varying amounts Taxes paid in one installment January 31 in accordance with the provisions of union contracts and College policy. Vacation Taxes paid in two installment earned is forfeited if not taken within the allowable time period. The expense for First installment due January 31 vacation pay is recorded on the accrual basis. The value of vested vacation pay Second installment due July 31 including payroll taxes and retirement costs as of June 30, 2012 and 2011, was Delinquent taxes purchased by approximately $84,000 and $97,000, respectively. Counties October 1 Retirement Plan - The College has a retirement plan covering substantially all of its The College’s property tax is apportioned each fall, based on the equalized value as employees, which is funded through contributions to the Wisconsin Retirement System established by the Wisconsin Department of Revenue, to the municipalities located (WRS). All contributions made by the College on behalf of its employees are reported within the District. The College records its share of the property tax in the year it is as expenses when paid. See Note 6 for further information on retirement plans. levied.

22 23 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 1 Summary of Significant Accounting Policies (Continued) Note 1 Summary of Significant Accounting Policies (Continued)

Other Employee Benefit Amounts (Continued) Other Employee Benefit Amounts (Continued)

Post-Employment Health, Dental and Life Insurance - The College provides post- As of June 30, 2011, actuarial valuation, members of the plan consisted of the retirement health care, dental and life insurance benefits to certain teachers, support following: staff and administrators under contractual arrangements. Instructional staff must be 55 years old and have completed 12, 15, or 18 years of service to receive three, four, or Active: five years of paid health insurance, respectively. Other staff must be 58 years old and Fully eligible 50 have completed 15, 18 or 20 years of service to receive three, four, or five years of Others 172 paid health insurance, respectively. Health care benefits are coordinated with Medicare Retirees 38 after age 65. Dental coverage is available only to College Presidents. At June 30, Surviving spouses - 2012, 33 eligible retirees are receiving benefits. The College completed the second bi- annual actuarial study to estimate the costs and financial liabilities of this plan offered Total participants 260 to its employees for the year ended June 30, 2011. The cost method used in estimating the liability was the Projected Unit Credit Cost Method. In order to determine the employer’s liability, the per capita claims were offset by the cost sharing features of the plan and the Medicare reimbursement. The attrition period used was from date of hire to date of full eligibility for benefits (55 with 12 years of service). The Annual Required Contribution (ARC) and the Actuarial Accrued Liability (AAL) are based upon Projected Unit Credit Accrued Liability as of June 30, 2011. The significant assumptions used in the computation include a 5.5% discount rate and a health insurance premium rate trend of 10% in year 1 and declining to 5% in year 11 and remaining at that level thereafter.

The College established a trust (Blackhawk Technical College Post-Employment Benefits Trust) for the purpose of funding the Other Post-Employment Benefits (OPEB) liability on November 21, 2007. The plan’s financial statements are prepared on the accrual basis of accounting. Plan contributions are recognized in the period in which the contributions are due and the College has committed to making contributions which total at least the amount of the ARC. Benefits are paid at the time premiums are due to the insurance carrier. Investments are reported at fair value.

On October 10, 2010, the College issued a taxable general obligation promissory note in the amount of $5,175,000 in order to substantially fund this liability. Based on the actuarial valuation and review as of June 30, 2011, the best estimate for the AAL of the College’s post-retirement health care plan, which is 84.96% funded and not included in the accompanying basic financial statements at June 30, 2012, is $8,099,141.

24 25 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 1 Summary of Significant Accounting Policies (Continued) Note 1 Summary of Significant Accounting Policies (Continued)

Other Employee Benefit Amounts (Continued) Tuition and Fees

OPEB cost is calculated based upon the ARC which represents a level of funding that, Tuition and fees are recorded, net of scholarships, as revenue in the period in which if paid on an ongoing basis, is projected to cover the normal cost each year and the related activity or instruction takes place. Tuition and fees attributable to summer amortize any unfunded actuarial liabilities over a period of 30 years. The following school programs are prorated on the basis of student class days occurring before and schedule shows the computation of the net OPEB (asset) obligation: after the fiscal year-end.

2012 2011 State and Federal Revenues

ARC$ 954,759 $ 1,244,309 The College receives funding from various federal and state contracts and grants. Interest on OPEB obligation (229,438) 7,018 Some of these revenues are earned over fiscal periods different from the College and Adjustment to annual required contribution 272,065 (9,352) are subject to the Federal Single Audit Act and State Single Audit Guidelines.

Annual OPEB cost 997,386 1,241,975 State general aids are recognized as revenue in the entitlement year. Federal and state aids for reimbursable programs are recognized as revenue in the year the related Contributions made 406,463 5,581,463 program expenditures are incurred. Aids received prior to meeting revenue recognition criteria are recorded as deferred revenues. Increase (decrease) in net OPEB obligation 590,923 (4,339,488) Scholarship Allowances and Student Aid Net OPEB (asset) obligation - Beginning of year (4,171,593) 167,895 Financial aid to students is reported in the basic financial statements under the Net OPEB (asset) obligation - End of year $ (3,580,670) $ (4,171,593) alternative method, as prescribed by the National Association of College and University Business Officers (NACUBO). Certain aid (loans, funds provided to students as awarded by third parties, and Federal Direct Lending) is accounted for as third-party The funded status of the plan at June 30 was as follows: payments (credited to the student’s account as if the student made the payment). All other aid is reflected in the basic financial statements as operating expenses or 2012 2011 scholarship allowances, which reduce revenues. The amount reported as operating expenses represents the portion of aid that was provided to the student in the form of AAL$ 8,099,141 $ 8,099,141 cash. Scholarship allowances represent the portion of aid provided to the student in Actuarial value of plan assets 6,880,656 6,880,656 the form of reduced tuition. Under the alternative method, these amounts are computed on a total College basis by allocating the cash payments to students, excluding payments for services, on the ratio of all aid to the aid not considered to be Unfunded actuarial accrued liability (UAAL) $ 1,218,485 $ 1,218,485 third-party aid. Funded ratio (actuarial value of plan assets/AAL) 85.0% 85.0%

Covered payroll (active plan members) $ 15,522,784 $ 15,522,784

Ratio of UAAL to covered payroll 7.8% 7.8%

26 27 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 1 Summary of Significant Accounting Policies (Continued) Note 2 Cash, Cash Equivalents, and Investments (Continued)

Net Assets Cash, cash equivalents, and investments are classified as follows at June 30:

Net assets are classified according to restrictions or availability of assets for 2012 2011 satisfaction of College obligations. Invested in capital assets, net of related debt represents the net value of capital assets (property, plant, and equipment) less the Restricted for: debt incurred to acquire or construct the assets and the borrowed resources not yet Debt Service $ 740,151 $ 665,421 expended, but restricted for capital purchases. Restricted net assets for debt service Capital Projects 1,402,500 1,282,143 can only be used to repay debt service costs (principal and interest) as they are levied Student Financial Assistance 653,179 588,611 for that specific purpose. Restricted net assets for student financial assistance can only be used for student financial assistance activities. All remaining net assets are 2,795,830 2,536,175 unrestricted for legal purposes, but may be designated for specific purposes. Unrestricted 8,289,738 8,662,013 Note 2 Cash, Cash Equivalents, and Investments Total cash, cash equivalents, and investments $ 11,085,568 $ 11,198,188 Cash, cash equivalents, and investments are classified in the College’s Statements of Net Assets and Statements of Cash Flows as follows: Cash equivalents and investments are shown on the College’s Statement of Net Assets for the Blackhawk Technical College Post-employment Benefits Trust as 2012 2011 follows: Cash deposits: Cash on hand $11,775 $ ,775 2012 2011 Demand deposits 1,568,849 1,290,503 Cash equivalents: Total cash deposits 1,570,624 1,292,278 Cash on hand $ 100 $ 100 Wisconsin Local Government Investment Pool 232,206 162,425 Cash equivalents: US Bank Money Market 19,623 19,460 Wisconsin Local Government Investment Pool 3,747,700 2,254,690 Total cash equivalents $ 251,929 $ 181,985 Total cash and cash equivalents 5,318,324 3,546,968

Investments: Certificates of Deposit 5,766,272 7,650,249 Treasury securities 972 971

Total cash, cash equivalents, and investments $ 11,085,568 $ 11,198,188

28 29 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 2 Cash, Cash Equivalents, and Investments (Continued) Note 2 Cash, Cash Equivalents, and Investments (Continued)

The College is authorized by Wisconsin Statute 66.0603 to invest in the following Custodial Credit Risk – Deposits instruments: Custodial credit risk is the risk that, in the event of financial institution failure, the x Obligations of the U.S. Treasury and U.S. Agencies. College will not be able to recover deposits or will not be able to recover collateral x Obligations of any Wisconsin county, city, drainage district, technical college securities that are in the possession of a third party. As of June 30, 2012 and 2011, district, village, town, or school district. the College’s carrying value of the deposits was $7,335,121 and $8,940,751, respectively, compared to bank balances of $7,455,187 and $9,381,042, respectively. x Time deposits in any bank, trust company, or savings and loan association that is No bank balances at June 30, 2012 or 2011, were uninsured and uncollateralized. authorized to transact business in this state, if the time deposits mature in not more than three years. Credit Risk – Investments x The state’s local government pooled investment fund. x Any security maturing in seven years or less with either the highest or second Credit risk is the risk an issuer or other counterparty to an investment will not fulfill its rating category of a nationally recognized rating agency. obligations. State law limits investments as listed above. The College minimizes its credit risk by requiring security of the investment as the first priority and limiting x Repurchase agreements with public depositories, if the agreement is secured by investments to financial institutions and the LGIP. The College’s repurchase federal bonds or securities. agreements are collateralized by U.S. Government securities which are uninsured and x Securities of open-end management investment companies or investment trusts, if unregistered, held by the counterparty or its trust department, but not in the College’s the portfolio is limited to obligations of the U.S. Treasury and U.S. Agencies. name. As of June 30, 2012 and 2011, the College had $3,747,700 and $2,254,690, respectively, invested in the LGIP and treasury securities, which do not carry a credit x Bonds issued by a local exposition district. quality rating. x Bonds issued by a local professional baseball park district. x Bonds issued by the University of Wisconsin Hospitals and Clinics Authority. Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of an The Wisconsin Local Government Investment Pool (LGIP) has compiled fair value organization’s investment in a single issuer. Any investment which represents 5 information for all securities in the pool and has provided a book value to fair value percent or more of total investments is required to be disclosed. Exempt from this conversion factor. As of June 30, 2012 and 2011, the conversion factors were 100%. disclosure are investments issued or explicitly guaranteed by the U.S. government, investments in mutual funds, external investments pools, and other pooled The LGIP is part of the State Investment Fund (SIF) and is managed by the State of investments. The College places no limit on the amount the College may invest in any Wisconsin Investment Board (SWIB). The SIF is not registered with the Securities and one issuer. Exchange Commission, but operates under the statutory authority of Wisconsin Chapter 25. The SIF reports the fair value of its underlying assets annually. Participants in the LGIP have the right to withdraw their funds in total on one day’s Interest Rate Risk notice. Interest rate risk is the risk changes in interest rates will adversely affect the fair value of Investments in the LGIP are covered by a surety bond issued by Financial Security an investment. The College does not have a formal investment policy which limits Assurance, Inc. The bond insures against loss arising from principal defaults on investment maturities as a means of managing its exposure to fair value losses arising substantially all types of securities acquired by the pool except U.S. Government and from increasing interest rates. agency securities. The bond provides unlimited coverage on principal losses, reduced by any Federal Deposit Insurance Corporation (FDIC) and State of Wisconsin Guarantee Fund insurance. The College is exposed to market risk through its participation in the LGIP.

30 31 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 3 Accounts and Other Receivables Note 4 Capital Assets

Accounts and other receivables consisted of the following on June 30: Following are the changes in the College’s capital assets for the years ended June 30, 2012 and 2011: 2012 2011 2012 Student tuition and fees, net of allowance for Beginning Ending doubtful accounts$ 381,440 $ 1,036,463 Balance Additions Deletions Balance Contracted services 215,618 312,825 Capital assets not being depreciated: Other 24,306 33,747 Land $-482,500 $ $ 20,000 $ 462,500 Contstruction in progress 92,141 1,131,871 1,165,766 58,246 Total accounts and other receivables$ 621,364 $ 1,383,035 Total capital assets not being depreciated 574,641 1,131,871 1,185,766 520,746

Capital assets being depreciated: Land improvements 1,422,938 - - 1,422,938 Buildings and improvements 31,076,915 54,398 17,790 31,113,523 Leasehold improvements 836,179 938,387 - 1,774,566 Equipment 8,416,520 964,777 532,031 8,849,266

Total capital assets being depreciated 41,752,552 1,957,562 549,821 43,160,293

Less accumulated depreciation: Land improvements 738,909 52,107 - 791,016 Buildings and improvements 7,585,800 623,602 3,024 8,206,378 Leasehold improvements 62,713 65,269 - 127,982 Equipment 5,971,860 488,326 462,198 5,997,988

Total accumulated depreciation 14,359,282 1,229,304 465,222 15,123,364

Net capital assets 27,967,911$ 1,860,129 $ 1,270,365 28,557,675

Less general obligation debt (16,145,000) (16,020,000)

Add unspent general obligation debt 1,172,986 1,235,808

Total invested in capital assets - Net of related debt $ 12,995,897 $ 13,773,483

32 33 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 4 Capital Assets (Continued) Note 5 Long-Term Obligations

2011 The following is a summary of long-term obligations for the years ended June 30, 2012 Beginning Ending and 2011: Balance Additions Deletions Balance Capital assets not being depreciated: Balance Balance Due Within 07/01/11 Increases Decreases 06/30/12 One Year Land $-482,500 $-$ $ 482,500 Contstruction in progress 208,847 292,344 409,050 92,141 General Obligation Debt$ 20,805,000 $ 3,300,000 $ 3,940,000 $ 20,165,000 $ 3,430,000 Deferred premium 26,435 10,560 9,550 27,445 - Total capital assets not being depreciated 691,347 292,344 409,050 574,641 $ 20,831,435 $ 3,310,560 $ 3,949,550 $ 20,192,445 $ 3,430,000

Capital assets being depreciated: Balance Balance Due Within Land improvements 1,310,788 112,150 - 1,422,938 07/01/10 Increases Decreases 06/30/11 One Year Buildings and improvements 30,824,962 251,953 - 31,076,915 General Obligation Debt$ 17,915,000 $ 6,925,000 $ 4,035,000 $ 20,805,000 $ 3,840,000 Leasehold improvements 836,179 - - 836,179 Deferred premium 17,328 17,337 8,230 26,435 - Equipment 8,140,631 408,969 133,080 8,416,520 $ 17,932,328 $ 6,942,337 $ 4,043,230 $ 20,831,435 $ 3,840,000 Total capital assets being depreciated 41,112,560 773,072 133,080 41,752,552 The College pledges full faith, credit, and resources of the College to pay all outstanding general obligation promissory notes. The College levies taxes annually to Less accumulated depreciation: pay the amount of principal and interest due for the debt. Land improvements 689,606 49,303 - 738,909 Buildings and improvements 6,964,905 620,895 - 7,585,800 The obligations of the College at June 30 are as follows: Leasehold improvements 20,904 41,809 - 62,713 Equipment 5,581,439 503,452 113,031 5,971,860 2012 2011

Total accumulated depreciation 13,256,854 1,215,459 113,031 14,359,282 2002 $535,000 general obligation promissory note payable to R.W. Baird & Co., Milwaukee, WI, Net capital assets 28,547,053$ (150,043) $ 429,099 27,967,911 interest at 4.375%-4.55%, payable semiannually in October and April; varying principal payments Less general obligation debt (17,915,000) (16,145,000) are due annually on April 1 until maturity on April 1, 2012. Proceeds used for building Add unspent general obligation debt 1,140,191 1,172,986 construction and improvements.$ - $ 65,000

Total invested in capital assets - Subtotal$ - $ 65,000 Net of related debt $ 11,772,244 $ 12,995,897

34 35 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 5 Long-Term Obligations (Continued) Note 5 Long-Term Obligations (Continued)

The obligations of the College at June 30 are as follows: 2012 2011

2012 2011 Subtotal - Carried forward $ 7,860,000 $ 9,640,000

Subtotal - Carried forward $ - $ 65,000 2005 $1,500,000 general obligation promissory note payable to Harris, N.A., Chicago, IL, 2002 $640,000 general obligation promissory note interest at 3.00%-3.65%, payable semiannually payable to R.W. Baird & Co., Milwaukee, WI, in April and October; varying principal payments interest at 3.5%-4.35%, payable semiannually are due annually on April 1 until maturity on in October and April; varying principal payments April 1, 2015. Proceeds used for building are due annually on April 1 until maturity on improvements, remodeling, and to acquire April 1, 2012. Proceeds used for building equipment. 330,000 435,000 construction and improvements. - 80,000 2006 $2,000,000 general obligation promissory 2002 $2,390,000 general obligation promissory note payable to UMB Bank, N.A., Kansas City, note payable to First Trust Portfolios LP, Lisle, IL, MO, interest at 4.00%-4.25%, payable interest at 3.0%-4.0%, payable semiannually in semiannually in April and October; varying April and October; varying principal payments principal payments are due annually on April 1 are due annually on April 1 until maturity on until maturity on April 1, 2016. Proceeds used April 1, 2012. Proceeds used for building for building improvements, remodeling, and to improvements, remodeling, and to acquire acquire equipment. 400,000 500,000 equipment. - 135,000 2007 $2,300,000 general obligation promissory 2003 $17,500,000 general obligation bonds note payable to UMB Bank, N.A., Kansas City, payable to RBC Dain Rauscher, Denver, CO, MO, interest at 4.00%-4.10%, payable interest at 3.25%-4.25%, payable semiannually semiannually in April and October; varying in April and October; varying principal payments principal payments are due annually on April 1 are due annually on April 1 until maturity on until maturity on April 1, 2017. Proceeds used April 1, 2018. Proceeds used to expand College for building improvements, remodeling, and to facilities at the Central and Monroe Campuses acquire equipment. 1,005,000 1,180,000 and to acquire equipment. 7,685,000 9,100,000 2008 $2,500,000 general obligation promissory 2004 $1,500,000 general obligation promissory note payable to Stifel Nicholas & Company, Inc., note payable to Bank of America, N.A., Chicago, Minneapolis, MN, interest at 3.80%-4.00%, IL, interest at 2.95%, payable semiannually in payable semiannually in April and October; April and October; varying principal payments varying principal payments are due annually on are due annually on April 1 until maturity on April 1 until maturity on April 1, 2018. Proceeds April 1, 2014. Proceeds used for building used for building improvements, remodeling, and improvements, remodeling, and to acquire to acquire equipment. 1,150,000 1,315,000 equipment. 175,000 260,000 Subtotal $ 10,745,000 $ 13,070,000 Subtotal $ 7,860,000 $ 9,640,000

36 37 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 5 Long-Term Obligations (Continued) Note 5 Long-Term Obligations (Continued)

2012 2011 Principal and interest are payable from irrevocable and valorem taxes levied on all taxable property in the District. The annual requirements to amortize all outstanding Subtotal - Carried forward $ 10,745,000 $ 13,070,000 general obligation debt, including interest, are as follows:

2009 $2,500,000 general obligation promissory Year Principal Interest Total note payable to M&I Marshall and Ilsley Bank, 2013 $63,430,000 $ 63,053$ 4,093,053 Milwaukee, WI, interest at 2.75%-3.75%, 2014 3,040,000 564,575 3,604,575 payable semiannually in April and October; 2015 3,185,000 467,910 3,652,910 varying principal payments are due annually on 2016 3,060,000 364,100 3,424,100 April 1 until maturity on April 1, 2019. Proceeds 2017 2,835,000 259,445 3,094,445 used for building improvements, remodeling, and 2018-2021 4,615,000 255,918 4,870,918 to acquire equipment. 845,000 1,425,000 $ 20,165,000 $ 2,575,001 $ 22,740,001 2010 $1,750,000 general obligation promissory note payable to M&I Marshall and Ilsley Bank, Wisconsin Statutes 67.03(1) provides the aggregate amount of indebtedness of a Milwaukee, WI, interest at 1.75%-2.50%, district shall not exceed 5 percent of the value of the taxable property located in the payable semiannually in April and October; district. The 5 percent limit at June 30, 2012, and 2011, was $624,355,115 and varying principal payments are due annually on $600,222,766, respectively. The actual net aggregate indebtedness of the College for April 1 until maturity on April 1, 2016. Proceeds 2012 and 2011 was $19,452,294 (net of restricted net assets of $712,706) and used for building construction, remodeling, and $20,346,049 (net of restricted net assets of $458,951), respectively. In addition, the equipment. 1,230,000 1,650,000 maximum bonded indebtedness of the College for purchasing and constructing buildings and equipment may not exceed 2 percent of the value of the taxable property 2010 $5,175,000 taxable general obligation within the District. The 2 percent limit at June 30, 2012 and 2011, was $249,742,046 promissory note payable to M&I Marshall and and $240,089,106, respectively. The actual bonded indebtedness of the College for Ilsley Bank, Milwaukee, WI, interest at 1.30%- 2012 and 2011 was $7,413,384 (net of restricted net assets of $271,616) and 3.55%, payable semiannually in April and $8,899,257 (net of restricted net assets of $200,743), respectively. October; varying principal payments are due annually on April 1 until maturity on Note 6 Retirement Plans April 1, 2020. Proceeds used for OPEB past service liability. 4,145,000 4,660,000 All eligible College employees participate in the WRS, a cost-sharing, multiple- employer, defined benefit, Public Employee Retirement System (PERS). Eligibility 2011 $3,300,000 general obligation promissory requirements are as follows: note payable to M&I Marshall and Ilsley Bank, Milwaukee, WI, interest at 1.85%-2.80%, x Employees initially employed by a WRS employer prior to July 1, 2011 – payable semiannually in April and October; Expected to be employed for at least one year and expected to work at least varying principal payments are due annually on 600 hours a year (440 hours for teachers). April 1 until maturity on April 1, 2021. Proceeds used for building construction, remodeling, and x Employees initially employed by a WRS employer on or after July 1, 2011 – equipment. 3,200,000 - Expected to be employed for at least one year and expected to work at least 1,200 hours a year (880 hours for teachers). Total outstanding long-term obilgations $ 20,165,000 $ 20,805,000

38 39 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 6 Retirement Plans (Continued) Note 7 Expenses Classification

Covered employees in the general/teacher/educational support personnel category are Expenses on the Statements of Revenues, Expenses, and Changes in Net Assets are required by statute to contribute 5.8% (July to December 2011) and 5.9% (January to classified by function. Alternatively, the expenses could also be shown by type of June 2012). For the year ended June 30, 2012, the College made these contributions expense, as follows for the year ended June 30: for covered employees in the educational support personnel category. For the year ended June 30, 2011, the College made these contributions to the plan on behalf of all 2012 2011 covered employees. Employers are required to contribute an actuarially determined amount necessary to fund the remaining projected cost of future benefits. Salaries and wages$ 18,176,164 $ 18,724,329 Employee benefits 7,026,969 8,106,064 The payroll for College employees covered by the WRS for the year ended June 30, Travel, memberships, and subscriptions 266,465 310,483 2012, was $16,406,052; the employer’s total payroll was $18,176,164. The total Supplies 2,825,266 2,525,997 required contribution for the year ended June 30, 2012, was $1,919,395 or 11.7% of Contract services 3,009,631 3,150,775 covered payroll. Total contributions for the years ending June 30, 2011 and 2010, Rentals 235,493 182,285 were $1,889,738 and $1,704,397, respectively. The employer has made the Credit 102,185 124,192 employees’ contributions to the plan for the year ended June 30, 2011. Insurance 194,039 179,688 Employees who retire at or after age 65 are entitled to receive a retirement benefit. Utilities 754,474 789,043 Employees may retire at age 55 and receive actuarially reduced benefits. The factors Depreciation 1,229,306 1,215,457 influencing the benefit are (1) final average earnings, (2) years of creditable service, Student aid 4,954,624 5,708,580 and (3) a formula factor. Final average earnings is the average of the employee’s three highest years’ earnings. Employees terminating covered employment before Total operating expenses $ 38,774,616 $ 41,016,893 becoming eligible for a retirement benefit may withdraw their contributions and, by doing so, forfeit all rights to any subsequent benefits. For employees beginning Note 8 Commitments and Contingencies participation on or after January 1, 1990, and no longer actively employed on or after April 24, 1998, creditable service in each of five years is required for eligibility for a The College receives regular program aids from the WTCS Board based on aidable retirement annuity. Participants employed prior to 1990 or beginning employment on expenditures. This amount is subject to adjustment based on a state audit of the full- or after April 24, 1998, up to and including June 30, 2011, are immediately vested. time equivalent students and cost allocation reports of the College and other districts of Participants initially beginning employment on or after July 1, 2011, are not eligible for the state. The audit for the year ended June 30, 2012, has not been completed. It is a WRS retirement annuity or lump sum retirement benefit until they have five years of the belief of management of the College that audit adjustments, if any, will not creditable service. If an employee were to leave prior to fulfilling the five year vesting materially affect the College’s financial position. requirement, that employee would remain eligible to take a separation benefit. The separation benefit would include the employee contributions (and investment returns) From time to time, the College becomes party to claims and legal proceedings. only. Although the outcome of such matters cannot be forecast with certainty, it is the opinion of management and appropriate legal counsel that the likelihood is remote that The WRS also provides death and disability benefits for employees. Eligibility and the any such claims or proceedings will have a material adverse effect on the College’s amount of all benefits are determined under Chapter 40 of Wisconsin Statutes. The financial position. WRS issues an annual financial report which may be obtained by writing to the Department of Employee Trust Funds, P.O. Box 7931, Madison, WI 53707-7931. As of June 30, 2012, the College had approximately $236,000 in construction commitments related to construction in progress at year-end.

40 41 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 9 Operating Leases Note 10 Insurance (Continued)

The College’s operating leases are month-to-month and year-to-year for institutional Districts Mutual Insurance (Continued) facilities and office equipment. Total expense for all operating leases for the years ended June 30, 2012 and 2011, was approximately $233,400 and $179,030, DMI operations are governed by a five-member board of directors. Member colleges respectively. Total future minimum lease payments at June 30 are estimated as follows: do not exercise any control over the activities of DMI beyond election of the board of directors at the annual meeting. The board has the authority to adopt its own budget, set policy matters, and control the financial affairs of the Company. Year Amount At the start of operations, each member college was assessed a charge for a 2013 $ 370,933 capitalization component to establish reserves for the Company. For the years ended 2014 363,113 June 30, 2012 and 2011, the College paid premiums of approximately $165,800 and 2015 367,943 $154,600, respectively, to DMI. Future premiums will be based on relevant rating 2016 186,024 exposure bases as well as the historical loss experience by members. DMI’s ongoing 2017 190,788 operational expenses, other than loss adjustment expenses, are apportioned pro rata 2018-2021 462,548 to each participant based on equity interest in the Company. The audited DMI financial statements can be obtained through Districts Mutual Insurance Co., 200 W. Grand $ 1,941,349 Avenue Suite B, Port Washington, WI 53074. Supplemental Insurance Note 10 Insurance In July 1997, the WTCS technical colleges formed the WTCS Insurance Trust to jointly Districts Mutual Insurance purchase commercial insurance to provide coverage for losses from theft of, damages to, or destruction of assets. The trust is organized under Wisconsin Statutes 66.0301 In July 2004, all sixteen WTCS technical colleges created Districts Mutual Insurance and is governed by a board of trustees consisting of one trustee from each member Company (DMI). DMI is a fully assessable mutual company authorized under college. Member entities include all sixteen WTCS districts. Wisconsin Statute Chapter 611 to provide property, casualty, and liability insurance and risk management services to its members. The scope of insurance protection The WTCS Insurance Trust has purchased the following levels of coverage from DMI provided by DMI is broad, covering property at $350,000,000 per occurrence; general for its participating members: liability, auto, and educators’ legal liability at $5,000,000 per occurrence; and workers’ compensation at the statutorily required limits. x Liability: $5,000,000 aggregate general; $1,000,000 auto per accident; At this time, settled claims have not approached the coverage limits as identified $1,000,000 employee benefits; includes benefit for accidental death and above. The College’s exposure in its layer of insurance is limited to $5,000 to dismemberment, repatriation, and medical expenses; $1,000 deductible for $100,000 per occurrence depending on the type of coverage, and DMI purchases employee benefits. reinsurance for losses in excess of its retained layer of coverage. x Crime: $750,000 coverage for employee dishonesty, forgery, computer fraud, and funds transfer fraud; $500,000 coverage for theft, robbery, burglary, disappearance and destruction of money and securities; $25,000 coverage for investigation expenses; $2,500 deductible for investigation; $15,000 deductible for employee dishonesty, forgery, and fraud.

42 43 Blackhawk Technical College District

Notes to the Basic Financial Statements

Note 10 Insurance (Continued)

Supplemental Insurance

The College has purchased the following additional insurance:

x Aircraft Hull and Liability: $1,000,000 per occurrence; $1,000 deductible. x Aircraft General Liability: $10,000,000 per occurrence; $10,000,000 aggregate limit; $1,000 deductible per aircraft. The Trust financial statements can be obtained through Lakeshore Technical College Required Supplementary Information District, 1290 North Avenue, Cleveland, WI 53015.

Note 11 Subsequent Events

On August 1, 2012, the College issued general obligation promissory notes in the amount of $4,100,000. The proceeds are to be used for costs related to building improvements, remodeling and the acquisition of equipment. The interest rate varies from 1.0% to 2.0% with the first principal payment due April 1, 2013.

Subsequent events have been evaluated through November 26, 2012, which is the date the financial statements were available to be issued.

44 Blackhawk Technical College District Blackhawk Technical College District

Schedules of Funding Progress and Employer Contributions Note to Required Supplementary Information Year Ended June 30, 2012

Schedule of Employer Contributions Note 1 The College is required to present the Schedule of Funding Progress information for (Unaudited) the three most recent studies. Studies have been completed as of June 30, 2011 and June 30, 2012 2009.

Annual Net Year Required Percentage OPEB Ended Contribution of ARC (Asset) June 30 (ARC) Contributed Obligation 2012$ 954,759 42.6%$ (3,580,670) 2011 1,244,309 448.6% (4,171,593) 2010 1,243,928 88.4% 167,895 2009 854,460 97.1% 24,359

Schedule of Funding Progress (Unaudited) June 30, 2011

Actuarial UAAL as a Accrued Percentage Actuarial Liability (AAL) Unfunded of Actuarial Value of Projected AAL Funded Covered Covered Valuation Assets Unit (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (a/b) (c) ((b-a)/c) 6/30/11$ 6,880,656 $ 8,099,141 $ 1,218,485 85.0%$7 15,522,784 .8% 6/30/09 496,255 9,417,090 8,920,835 5.3% 13,751,811 64.9%

See Independent Auditor’s Report. See accompanying note to required supplementary information. 45 46 Blackhawk Technical College District

General Fund – Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual (Non-GAAP Budgetary Basis) Year Ended June 30, 2012

Variance with Actual on a Final Budget- Budget Amounts Budgetary Favorable Original Final Basis (Unfavorable) Revenues Local government $ 15,872,757 $ 15,293,752 $ 15,310,852 $ 17,100 Intergovernmental revenue: State aids 3,352,600 3,352,600 3,463,383 110,783 Supplementary Financial Information Federal aids - 12,000 28,554 16,554 Tuition and fees: Statutory program fees 8,180,719 8,180,719 7,604,405 (576,314) Material fees 565,400 565,400 509,850 (55,550) Other student fees 381,015 428,615 384,064 (44,551) Miscellaneous - institutional revenue 913,000 1,195,210 955,674 (239,536)

Total revenues 29,265,491 29,028,296 28,256,782 (771,514)

Expenditures Current: Instruction 17,399,746 17,488,290 17,028,845 459,445 Instructional resources 2,268,147 2,246,089 1,786,391 459,698 Student services 2,103,489 2,250,917 2,174,367 76,550 General institutional 5,013,853 5,229,492 4,615,220 614,272 Physical plant 2,042,540 2,038,040 1,929,108 108,932

Total expenditures 28,827,775 29,252,828 27,533,931 1,718,897

Revenues over (under) expenditures 437,716 (224,532) 722,851 947,383

Other financing uses Operating transfers out (684,875) (684,875) (684,875) -

Total other financing uses (684,875) (684,875) (684,875) -

Revenues and other financing sources over (under) expenditures and other financing uses (247,159) (909,407) 37,976 947,383

Fund balance Beginning of year 12,195,475 12,195,475 12,195,475 -

End of year $ 11,948,316 $ 11,286,068 $ 12,233,451 $ 947,383

See Independent Auditor’s Report. 47 Blackhawk Technical College District Blackhawk Technical College District

Special Revenues Fund - Operating – Schedule of Revenues, Expenditures, Special Revenue Fund – Non-Aidable Funds – and Changes in Fund Balance – Budget and Actual Schedule of Revenues, Expenditures, and Changes in (Non-GAAP Budgetary Basis) Fund Balance – Budget and Actual (Non-GAAP Budgetary Basis) Year Ended June 30, 2012 Year Ended June 30, 2012

Variance with Variance with Actual on a Final Budget- Actual on a Final Budget- Budget Amounts Budgetary Favorable Budget Amounts Budgetary Favorable Original Final Basis (Unfavorable) Original Final Basis (Unfavorable) Revenues Local government $ 61,000 $ 649,459 $ 645,444 $ (4,015) Revenues Intergovernmental revenue: Intergovernmental revenue: State aids 778,428 760,692 654,915 (105,777) State aids$ 1,614,000 $ 1,634,000 $ 1,016,536 $ (617,464) Federal 1,661,604 1,278,915 899,992 (378,923) Federal 14,665,000 18,265,000 15,708,202 (2,556,798) Tuition and fees: Miscellaneous - institutional revenue 145,600 252,100 188,025 (64,075) Statutory program fees - - - - Material fees 500 1,355 1,418 63 Total revenues 16,424,600 20,151,100 16,912,763 (3,238,337) Other student fees 500 23,799 24,904 1,105 Miscellaneous - institutional revenue 10,000 227,383 150,980 (76,403) Expenditures Current: Total revenues 2,512,032 2,941,603 2,377,653 (563,950) Student services 16,454,600 20,075,100 16,832,431 3,242,669 General institutional - 108,000 106,596 1,404 Expenditures Current: Total expenditures 16,454,600 20,183,100 16,939,027 3,244,073 Instruction 2,499,121 2,360,559 1,855,038 505,521 Instructional resources 82,161 82,161 82,161 - Revenues over (under) expenditures (30,000) (32,000) (26,264) 5,736 Student services 707,927 685,324 649,003 36,321 Physical Plant - - - - Fund balance Beginning of year 139,077 139,077 139,077 - Total expenditures 3,289,209 3,128,044 2,586,202 541,842 End of year $ 109,077 $ 107,077 $ 112,813 $ 5,736 Revenues over (under) expenditures (777,177) (186,441) (208,549) (22,108)

Fund balance Beginning of year 984,401 984,401 984,401 -

End of year $ 207,224 $ 797,960 $ 775,852 $ (22,108)

See Independent Auditor’s Report. 48 See Independent Auditor’s Report. 49 Blackhawk Technical College District Blackhawk Technical College District

Capital Projects Fund – Debt Service Fund – Schedule of Revenues, Expenditures, and Changes in Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual (Non-GAAP Budgetary Basis) Fund Balance – Budget and Actual (Non-GAAP Budgetary Basis) Year Ended June 30, 2012 Year Ended June 30, 2012

Revenues Revenues Intergovernmental revenue: Local government $ 4,148,765 $ 4,148,765 $-4,148,765 $ State aids$ 77,099 $ 70,429 $8,820 79,249 $ Miscellaneous - institutional revenue 10,000 10,000 3,426 (6,574) Federal - 2,033 2,033 - Miscellaneous - institutional revenue 14,000 16,863 7,836 (9,027) Total revenues 4,158,765 4,158,765 4,152,191 (6,574)

Total revenues 91,099 89,325 89,118 (207) Expenditures

Expenditures Physical plant 4,802,500 4,802,500 4,730,346 72,154 Capital outlay: Instruction 591,878 592,096 442,972 149,124 Total expenditures 4,802,500 4,802,500 4,730,346 72,154 Instructional resources 1,544,459 1,898,704 1,404,308 494,396 General institutional 16,103 227,293 226,669 624 Revenues over (under) expenditures (643,735) (643,735) (578,155) 65,580 Physical plant 787,058 1,187,700 1,085,224 102,476 Other financing sources Total expenditures 2,939,498 3,905,793 3,159,173 746,620 Operating transfers in 651,875 651,875 651,875 -

Revenues over (under) expenditures (2,848,399) (3,816,468) (3,070,055) 746,413 Total other financing sources 651,875 651,875 651,875 -

Other financing sources Revenues and other financing sources Proceeds of general obligation debt 3,300,000 3,300,000 3,300,000 - over (under) expenditures 8,140 8,140 73,720 65,580

Total other financing sources 3,300,000 3,300,000 3,300,000 - Fund balance Beginning of year 638,986 638,986 638,986 - Other financing uses Operating transfers out (25,000) (25,000) (25,000) - End of year $ 647,126 $ 647,126 $ 712,706 $ 65,580

Total other financing uses (25,000) (25,000) (25,000) -

Revenues and other financing sources over (under) expenditures and other financing uses 426,601 (541,468) 204,945 746,413

Fund balance Beginning of year 799,024 799,024 799,024 -

End of year $21,225,625 $ 57,556$ 1,003,969 $ 746,413

See Independent Auditor’s Report. 50 See Independent Auditor’s Report. 51 Blackhawk Technical College District Blackhawk Technical College District

Enterprise Funds – Internal Service Funds – Schedule of Revenues, Expenditures, and Changes in Schedule of Revenues, Expenditures, and Changes in Fund Equity – Budget and Actual (Non-GAAP Budgetary Basis) Fund Equity – Budget and Actual (Non-GAAP Budgetary Basis) Year Ended June 30, 2012 Year Ended June 30, 2012

Variance with Variance with Actual on a Final Budget- Actual on a Final Budget- Budget Amounts Budgetary Favorable Budget Amounts Budgetary Favorable Original Final Basis (Unfavorable) Original Final Basis (Unfavorable) Revenues Revenues Intergovernmental revenue: Miscellaneous - institutional revenue $ 198,800 $ 198,800 $-198,800 $ Federal$700 700 $$628 1,328 $ Miscellaneous - institutional revenue 244,154 260,154 282,914 22,760 Total revenues 198,800 198,800 198,800 -

Total revenues 244,854 260,854 284,242 23,388 Expenditures Auxiliary services 208,800 308,800 207,340 101,460 Expenditures Auxiliary services 346,133 346,133 266,766 79,367 Total expenditures 208,800 308,800 207,340 101,460

Total expenditures 346,133 346,133 266,766 79,367 Revenues over (under) expenditures (10,000) (110,000) (8,540) 101,460

Revenues over (under) expenditures (101,279) (85,279) 17,476 102,755 Retained earnings Beginning of year 270,972 270,972 270,972 - Other financing sources Operating transfers in 74,000 58,000 58,000 - End of year $ 260,972 $ 160,972 $ 262,432 $ 101,460

Total other financing sources 74,000 58,000 58,000 -

Revenues and other financing sources over (under) expenditures and other financing uses (27,279) (27,279) 75,476 102,755

Retained earnings Beginning of year 269,623 269,623 269,623 -

End of year $ 242,344 $ 242,344 $ 345,099 $ 102,755

See Independent Auditor’s Report. 52 See Independent Auditor’s Report. 53 Blackhawk Technical College District Schedule to Reconcile the Non-GAAP Budgetary Combined Balance Sheet – All Fund Types to the Statement of Net Assets June 30, 2012

General Special Revenue Fund Capital Debt Enterprise Internal Agency Reconciling Statement of ASSETS AND OTHER DEBITS Fund Operating Non - Aidable Projects Fund Service Fund Fund Service Fund Funds Total Items Net Assets Assets Cash and cash equivalents $ 1,785,234 $ 128,293 $ 36,212 $ 1,402,500 $ 739,179 $ 414,507 $ 262,432 $ 549,967 $-5,318,324 $ $ 5,318,324 Investments 5,099,272 600,000 67,000 - 972 - - 5,767,244 - 5,767,244 Receivables: Taxes 6,073,658 ------6,073,658 - 6,073,658 Federal and state 168,867 263,495 538,663 - ----971,025-971,025 Accounts 460,662 - 17,360 - - 4,861 - 138,481 621,364 - 621,364 Due from other funds 603,628 ------603,628(603,628) - Prepaid items 245,200 ------245,200-245,200 Post-employment benefits ------3,580,6703,580,670 Fixed assets ------43,681,03943,681,039 Less: accumulated depreciation ------15,123,36415,123,364

Total assets and other debits $ 14,436,521 $ 991,788 $ 659,235 $ 1,402,500 $ 740,151 $ 419,368 $ 262,432 $ 688,448 $ 19,600,443 $ 31,534,717 $ 51,135,160

LIABILITIES, EQUITY AND OTHER CREDITS

Liabilities Accounts payable $8490,743 $ ,899$ 11,748 $ 166,692 $ - $-211 $4$ 23$-678,716 $ $ 678,716 Accrued liabilities 1,547,711 207,037 3,365 - - 1,739 - - 1,759,852 - 1,759,852 Accrued interest ------165,764165,764 Due to other funds - - 531,309 - - 72,319 - - 603,628 (603,628) - Deferred revenues Student fees 137,841 ------137,841 137,841 Due to student organizations ------688,025 688,025 - 688,025 General obligation debt payable ------20,165,00020,165,000 Deferred premium on general obligation debt - - - - 27,445 - - - 27,445 - 27,445 Total liabilities 2,176,295 215,936 546,422 166,692 27,445 74,269 - 688,448 3,895,507 19,727,136 23,622,643 Fund equity and other credits Investments in capital assets ------13,773,483 13,773,483 Retained earnings - - - - - 345,099 - - 345,099 12,734,180 13,079,279 Fund balances: Reserved for debt service - - - - 712,706 - - - 712,706 (165,764) 546,942 Reserved for capital projects - - - 1,003,969 ----1,003,969 (1,003,969) - Reserved for self-insurance ------262,432 - 262,432 (262,432) - Reserved for student financial assistance - - 112,813 - ----112,813 - 112,813 Reserved for prepaid items 245,200 ------245,200 (245,200) - Unreserved - Designated for operations 7,405,682 ------7,405,682 (7,405,682) - Unreserved - Designated for State aid fluctuations 322,760 ------322,760 (322,760) - Unreserved - Designated for subsequent years 484,140 ------484,140 (484,140) - Unreserved - Designated for subsequent year 3,775,669 775,852 ------4,551,521 (4,551,521) - Budgetary basis fund equity 12,233,451 775,852 112,813 1,003,969 712,706 345,099 262,432 - 15,446,322 12,066,195 27,512,517

Reserve for encumbrances 26,775 - - 231,839 ----258,614(258,614) - Total equity/net assets 12,260,226 775,852 112,813 1,235,808 712,706 345,099 262,432 - 15,704,936 11,807,581 27,512,517 Total liabilities, fund equity and other credits $ 14,436,521 $ 991,788 $ 659,235 $ 1,402,500 $ 740,151 $ 419,368 $ 262,432 $ 688,448 $ 19,600,443 $ 31,534,717 $ 51,135,160

See Independent Auditor’s Report. 54 Blackhawk Technical College District Schedule to Reconcile the Non-GAAP Budgetary Basis Financial Statements to the Statement of Revenues, Expenditures, and Changes in Fund Balance Year Ended June 30, 2012

Statement of Revenues, Expenses General Special Revenue Fund Capital Debt Enterprise Internal Reconciling and Changes in Fund Operating Non - Aidable Projects Fund Service Fund Fund Service Fund Total Items Net Assets Revenues Local government - tax levy $ 15,310,852 $-645,444 $ -$ $-4,148,765 $-$$- 20,105,061 $$ 20,105,061 Intergovernmental revenue: State aids 3,463,383 654,915 1,016,536 79,249 - - - 5,214,083 5,214,083 Federal aids 28,554 899,992 15,708,202 2,033 - 1,328 - 16,640,109 (8,504,564) 8,135,545 Tuition and fees: Statutory program fees 7,604,405 ------7,604,405 (2,945,961) 4,658,444 Material fees 509,850 1,418 - - - - - 511,268 (198,159) 313,109 Other student fees 384,064 24,904 - - - - - 408,968 (158,527) 250,441 Miscellaneous - institutional revenue 955,674 150,980 188,025 7,836 3,426 282,914 198,800 1,787,655 (198,800) 1,588,855

Total revenues 28,256,782 2,377,653 16,912,763 89,118 4,152,191 284,242 198,800 52,271,549 (12,006,011) 40,265,538 Expenditures Current: Instruction 17,028,845 1,855,038 - 442,972 - - - 19,326,855 (157,541) 19,169,314 Instructional resources 1,786,391 82,161 - 1,404,308 - - - 3,272,860 (568,033) 2,704,827 Student services 2,174,367 649,003 16,832,431 - - - - 19,655,801 (15,623,224) 4,032,577 General institutional 4,615,220 - 106,596 226,669 - - - 4,948,485 464,203 5,412,688 Physical plant 1,929,108 - - 1,085,224 4,730,346 - - 7,744,678 (5,574,076) 2,170,602 Student aid ------3,807,513 3,807,513 Auxiliary services - - - - - 266,766 207,340 474,106 (226,317) 247,789 Depreciation ------1,229,306 1,229,306 Loss on disposition of fixed assets ------104,598 104,598 Debt service Interest and fiscal charges ------776,074 776,074

Total expenditures 27,533,931 2,586,202 16,939,027 3,159,173 4,730,346 266,766 207,340 55,422,785 (15,767,497) 39,655,288 Excess (deficiency) of revenues over expenditures 722,851 (208,549) (26,264) (3,070,055) (578,155) 17,476 (8,540) (3,151,236) 3,761,486 610,250 Other financing sources (uses) Operating transfers in - - - - 651,875 58,000 - 709,875 (709,875) - Operating transfers out (684,875) - - (25,000) - - - (709,875) 709,875 - Proceeds from long-term debt - - - 3,300,000 - - - 3,300,000 (3,300,000) - Total other financing sources (uses) (684,875) - - 3,275,000 651,875 58,000 - 3,300,000 (3,300,000) - Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses 37,976 (208,549) (26,264) 204,945 73,720 75,476 (8,540) 148,764 461,486 610,250 Fund balances: Beginning of year 12,195,475 984,401 139,077 799,024 638,986 269,623 270,972 15,297,558 11,604,709 26,902,267 End of year $ 12,233,451 $1775,852 $ 12,813 $ 1,003,969 $ 712,706 $ 345,099 $ 262,432 $ 15,446,322 $ 12,066,195 $ 27,512,517

See Independent Auditor’s Report. 55 Blackhawk Technical College District Blackhawk Technical College District Schedule to Reconcile the Non-GAAP Budgetary Basis Financial Statements Schedule to Reconcile the Non-GAAP Budgetary Combined Balance Sheet – to the Statement of Revenues, Expenditures, and Changes in Fund Balance All Fund Types to the Statement of Net Assets (Continued) June 30, 2011 Year Ended June 30, 2012 General Special Revenue Fund (1) State grant revenue is presented on the Statement of Revenues, Expenses and Changes ASSETS AND OTHER DEBITS Fund Operating Non - Aidable in Net assets as follows: Assets Cash and cash equivalents $ 96,660 $ 440,881 $ 63,608 Operating $ 1,750,700 Investments 7,183,249 400,000 67,000 Receivables: Non-operating 3,463,383 Taxes 6,198,706 - - Federal and state 170,052 332,753 610,200 Total $ 5,214,083 Accounts 1,231,541 - 13,842 Due from other funds 592,148 - - Prepaid items 27,980 - - Post-employment benefits - - - (2) Other institutional revenue is reported in three separate lines on the Statement of Revenues, Fixed assets - - - Expenses, and Changes in Net Assets as follows: Less: accumulated depreciation - - -

Auxiliary enterprise revenues$ 282,914 Total assets and other debits $ 15,500,336 $ 1,173,634 $ 754,650 Contract revenues 594,867 LIABILITIES, EQUITY AND OTHER CREDITS Miscellaneous income 662,183 Investment income 48,891 Liabilities Accounts payable $ 550,570 $ 25,165 $ 21,228 Accrued liabilities 1,801,295 164,068 2,197 Total $ 1,588,855 Accrued interest - - - Due to other funds - - 592,148 (3) Reconciliation of budgetary basis fund equity and net assets as presented on the Statement of Deferred revenues Revenue, Expenses, and Changes in Net Assets as follows: Student fees 876,718 - - Due to student organizations - - - General obligation debt payable - -- 2012 Deferred premium on general obligation debt - - - Net OPEB obligation payable - - - Budgetary basis fund equity $ 15,446,322 Total liabilities 3,228,583 189,233 615,573 General fixed assets capitalized - cost 43,681,039 Fund equity and other credits Accumulated depreciation on general fixed assets (15,123,364) Investments in capital assets - - - Net OPEB Assets 3,580,670 Retained earnings - - - Fund balances: General obligation debt (20,165,000) Reserved for debt service - - - Accrued interest on long-term debt (165,764) Reserved for capital projects - - - Encumbrances 258,614 Reserved for self-insurance - - - Reserved for student financial assistance - - 139,077 Net assets per basic financial statements $ 27,512,517 Reserved for prepaid items 27,980 - - Reserve for OPEB - - - Unreserved - Designated for operations 8,233,433 - - Unreserved - Designated for State aid fluctuations 418,000 - - Unreserved - Designated for subsequent years 1,527,424 - - Unreserved - Designated for subsequent year 1,988,638 984,401 -

Budgetary basis fund equity 12,195,475 984,401 139,077 Reserve for encumbrances 76,278 - -

Total equity/net assets 12,271,753 984,401 139,077

Total liabilities, fund equity and other credits $ 15,500,336 $ 1,173,634 $ 754,650

See Independent Auditor’s Report. 56 Blackhawk Technical College District Schedule to Reconcile the Non-GAAP Budgetary Basis Financial Statements to the Statement of Revenues, Expenditures, and Changes in Fund Balance Year Ended June 30, 2011

Capital Debt Enterprise Internal Agency Reconciling Statement of Projects Fund Service Fund Fund Service Fund Funds Total Items Net Assets General Special Revenue Fund Fund Operating Non - Aidable $ 1,282,143 $ 664,450 $ 269,697 $ 271,526 $ 458,003 $ 3,546,968 $ - $ 3,546,968 - 971 - - 7,651,220 - 7,651,220 Revenues Local government - tax levy $ 15,886,758 $-174,138 $ - - - - - 6,198,706 - 6,198,706 Intergovernmental revenue: - - - - - 1,113,005 - 1,113,005 State aids 4,739,837 396,957 1,018,483 - - 3,727 - 133,925 1,383,035 - 1,383,035 Federal aids 13,616 1,341,977 13,219,619 - - - - - 592,148 (592,148) - Tuition and fees: - - - - - 27,980 - 27,980 Statutory program fees 7,924,305 ------4,171,593 4,171,593 Material fees 542,762 390 ------42,327,193 42,327,193 Other student fees 420,717 12,505 ------14,359,282 14,359,282 Miscellaneous - institutional revenue 1,214,971 9,999 162,744

$ 1,282,143 $ 665,421 $ 273,424 $ 271,526 $ 591,928 $ 20,513,062 $ 31,547,356 $ 52,060,418 Total revenues 30,742,966 1,935,966 14,400,846

Expenditures Current: $-43,157 $460$$3,432 554 $$- 644,566 $$ 644,566 Instruction 18,376,379 1,761,905 - - - 2,741 - - 1,970,301 - 1,970,301 Instructional resources 1,993,022 85,496 ------180,035 180,035 Student services 2,268,499 675,206 14,317,685 - - - - - 592,148 (592,148) - General institutional 4,548,024 - 103,669 Physical plant 2,023,029 - - 66,000 - 600 - - 943,318 943,318 Student aid ------588,496 588,496 - 588,496 Auxiliary ------20,805,000 20,805,000 Depreciation - - - - 26,435 - - - 26,435 - 26,435 Loss on disposition of fixed assets ------Debt service Principal - - - 109,157 26,435 3,801 554 591,928 4,765,264 20,392,887 25,158,151 Interest and fiscal charges - - -

------12,995,897 12,995,897 Total expenditures 29,208,953 2,522,607 14,421,354 - - 269,623 - - 269,623 13,038,719 13,308,342 Excess (deficiency) of revenues over expenditures 1,534,013 (586,641) (20,508)

- 638,986 - - - 638,986 (180,035) 458,951 Other financing sources (uses) 799,024 - - - - 799,024 (799,024) - Operating transfers in - - 5,000 - - - 270,972 - 270,972 (270,972) - Operating transfers out (635,520) ------139,077 - 139,077 Proceeds from long-term debt ------27,980 (27,980) ------Total other financing sources (uses) (635,520) - 5,000 - - - - - 8,233,433 (8,233,433) ------418,000 (418,000) - Excess (deficiency) of revenues and other financing - - - - - 1,527,424 (1,527,424) - sources over expenditures and other financing uses 898,493 (586,641) (15,508) - - - - - 2,973,039 (2,973,039) - Fund balances: 799,024 638,986 269,623 270,972 - 15,297,558 11,604,709 26,902,267 Beginning of year 11,296,982 1,571,042 154,585 373,962 - - - - 450,240 (450,240) - End of year $ 12,195,475 $ 984,401 $ 139,077 1,172,986 638,986 269,623 270,972 - 15,747,798 11,154,469 26,902,267

$ 1,282,143 $ 665,421 $ 273,424 $ 271,526 $ 591,928 $ 20,513,062 $ 31,547,356 $ 52,060,418

See Independent Auditor’s Report. 57 Statement of Revenues, Expenses Capital Debt Enterprise Internal Reconciling and Changes in Projects Fund Service Fund Fund Service Fund Total Items Net Assets

$- $- 3,999,993 $-$ $-20,060,889 $ $ 20,060,889

4,429 - - - 6,159,706 6,159,706 - - 1,456 - 14,576,668 (6,107,603) 8,469,065 Single Audit Section - - - - 7,924,305 (2,176,236) 5,748,069 - - - - 543,152 (149,108) 394,044 - - - - 433,222 (119,042) 314,180 11,652 5,009 247,241 180,000 1,831,616 (164,000) 1,667,616

16,081 4,005,002 248,697 180,000 51,529,558 (8,715,989) 42,813,569

348,018 - - - 20,486,302 (206,462) 20,279,840 613,566 - - - 2,692,084 (91,567) 2,600,517 4,119 - - - 17,265,509 (13,080,911) 4,184,598 165,907 - - - 4,817,600 729,268 5,546,868 721,711 - - - 2,744,740 (411,049) 2,333,691 - - - - - 4,531,422 4,531,422 64,811 - 292,374 181,885 539,070 (214,570) 324,500 - - - - - 1,215,457 1,215,457 - - - - - 20,050 20,050

- 4,035,000 - - 4,035,000 (4,035,000) - - 835,717 - - 835,717 4,835 840,552

1,918,132 4,870,717 292,374 181,885 53,416,022 (11,538,527) 41,877,495

(1,902,051) (865,715) (43,677) (1,885) (1,886,464) 2,822,538 936,074

- 602,520 69,000 - 676,520 (676,520) - (25,000) - - - (660,520) 660,520 - 1,750,000 - - - 1,750,000 (1,750,000) -

1,725,000 602,520 69,000 - 1,766,000 (1,766,000) -

(177,051) (263,195) 25,323 (1,885) (120,464) 1,056,538 936,074

976,075 902,181 244,300 272,857 15,418,022 10,548,171 25,966,193

$ 799,024 $ 638,986 $ 269,623 $ 270,972 $ 15,297,558 $ 11,604,709 $ 26,902,267

See Independent Auditor’s Report. 58

Compliance and Other Matters

Independent Auditor’s Report on Internal Control Over As part of obtaining reasonable assurance about whether the Blackhawk Technical College Financial Reporting and on Compliance and Other Matters District’s financial statements are free of material misstatement, we performed tests of its Based on an Audit of Financial Statements compliance with certain provisions of laws, regulations, contracts, and grant agreements, Government Auditing Standards noncompliance with which could have a direct and material effect on the determination of Performed in Accordance With financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Governmental Auditing Standards. District Board Blackhawk Technical College District We noted certain matters that we reported to management of the Blackhawk Technical College Janesville, Wisconsin District in a separate letter dated November 26, 2012.

This report is intended for the information of the District Board, management, federal awarding We have audited the basic financial statements of Blackhawk Technical College District (the agencies, and pass-through entities and is not intended to be, and should not be, used by “College”), as of and for the year ended June 30, 2012, and have issued our report thereon anyone other than these specified parties. dated November 26, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United /s/ Wipfli LLP States. Wipfli LLP Internal Control Over Financial Reporting November 26, 2012 In planning and performing our audit, we considered the Blackhawk Technical College District’s Eau Claire, Wisconsin internal control over financial reporting 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 Blackhawk Technical College District’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of Blackhawk Technical College District’s internal control over financial reporting.

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

Our consideration of internal control over financial 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 reporting 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.

59 60

In our opinion, except for the noncompliance described in the preceding paragraph, the Blackhawk Technical College District complied, in all material respects, with the requirements referred to above that could have a direct and material effect on its major federal and state Independent Auditor’s Report on Compliance With Requirements programs for the year ended June 30, 2012. That Could Have a Direct and Material Effect on Each Major Internal Control Over Compliance Federal and State Program and Internal Control Over Compliance in Accordance With OMB Circular A-133 The management of the Blackhawk Technical College District is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal and state programs. In planning and performing our District Board audit, we considered the College’s internal control over compliance with requirements that could Blackhawk Technical College District have a direct and material effect on a major federal or state program in order to determine our Janesville, Wisconsin auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, Audits of State, Local Governments and Non-Profit Organizations State of Wisconsin Single Compliance , and the Audit Guidelines, but not for the purpose of expressing an opinion on the effectiveness of We have audited the compliance of the Blackhawk Technical College District (the “College”) internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Blackhawk Technical College District’s internal control over compliance. with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement and the State of Wisconsin Single Audit Our consideration of the internal control over compliance was for the limited purpose described Guidelines, issued by the Wisconsin Department of Administration, that could have a direct and in the first paragraph of this section and was not designed to identify all deficiencies in internal material effect on each of its major federal and state programs for the year ended June 30, control over compliance that might be deficiencies, significant deficiencies, or material 2012. The Blackhawk Technical College District’s major federal and state programs are weaknesses. However, as discussed below, we identified a deficiency in internal control over identified in the summary of auditor’s results section of the accompanying schedule of findings compliance that we consider to be a significant deficiency. and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal and state programs is the responsibility of the A deficiency in internal control over compliance exists when the design or operation of a control College’s management. Our responsibility is to express an opinion on the College’s compliance over compliance does not allow management or employees, in the normal course of performing based on our audit. their assigned functions, to prevent or detect and correct, noncompliance with a type of compliance requirement of a federal or state program on a timely basis. A material weakness in We conducted our audit of compliance in accordance with auditing standards generally internal control over compliance is a deficiency, or combination of deficiencies, in internal control accepted in the United States; the standards applicable to financial audits contained in over compliance, such that there is a reasonable possibility that material noncompliance with a Government Auditing Standards, issued by the Comptroller General of the United States; OMB type of compliance requirement of a federal or state program will not be prevented or detected Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and the and corrected on a timely basis. We consider the deficiency in internal control over compliance State of Wisconsin Single Audit Guidelines, issued by the Wisconsin Department of described in the accompanying schedule of findings and questioned costs as item 2012-01 to be Administration. Those standards and OMB Circular A-133 require that we plan and perform the a significant deficiency. audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a The Blackhawk Technical College District’s response to the findings identified in our audit is major federal or state program occurred. An audit includes examining, on a test basis, evidence described in the accompanying schedule of findings and questioned costs. We did not audit the about the College’s compliance with those requirements and performing such other procedures Blackhawk Technical College District’s response and, accordingly, we express no opinion on it. 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 of the This report is intended solely for the information and use of the District Board, management, federal awarding agencies and pass-through entities and is not intended to be and should not College’s compliance with those requirements. be, used by anyone other than these specified parties. As described in item 2012-01 in the accompanying schedule of findings and questioned costs, the Blackhawk Technical College District did not comply with requirements regarding having /s/ Wipfli LLP adequate documentation such as semiannual certifications, personnel activity reports, or Wipfli LLP equivalent documentation for wages allocated to its Career and Technical Education–Basic Grants to States program. Compliance with such requirements is necessary, in our opinion, for the Blackhawk Technical College District to comply with the requirements applicable to that November 26, 2012 program. Eau Claire, Wisconsin

61 62 Blackhawk Technical College District Blackhawk Technical College District

Schedule of Expenditures of Federal Awards Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2012 Year Ended June 30, 2012

CFDA/ CFDA/ Grant Grant Revenue Grant Grant Revenue Agency/Program/Grant Title Number Amount Federal Match Expenditures Agency/Program/Grant Title Number Amount Federal Match Expenditures

U.S. DEPARTMENT OF EDUCATION U.S. DEPARTMENT OF AGRICULTURE Direct Programs Passed through the Wisconsin Department of Public Student Financial Assistance Cluster Instruction Federal Supplemental Educational Opportunity Grants 84.007 Child and Adult Care Food Program 10.558$ 4,500 $ 1,328 -$ $ 1,328 SEOG 2011-12 E-P007A114485 n/a$ 58,250 $ - $ 58,250 Administrative Fee 7,498 - 7,498 U.S. DEPARTMENT OF COMMERCE Federal Work Study Program 84.033 Economic Development Administration FWS 2011-12 E-P033A114485 n/a 93,478 93,478 Passed through the University of WI - Whitewater Federal Pell Grant Program 84.063 Economic Adjustment Assistance 11.307 Pell 2011-12 E-P063P112672 n/a 7,051,910 - 7,051,910 EDA- State of Ingenuity 144-5-251600-PRJ42RF Administrative Fee 12,785 12,785 051 65,600 17,030 - 17,030 Federal Direct Student Loan Program 84.268 Direct Loan Program E-P268K122672 n/a 8,500,127 - 8,500,127 U.S. DEPARTMENT OF LABOR Parent's PLUS Loan E-P268K122672 n/a 4,437 - 4,437 Employment and Training Administration Total Student Financial Assistance Cluster 15,728,485 - 15,728,485 WIA Pilots, Demonstrations, and Research Projects 17.261 CATE II 053 1,000,000 217,310 - 217,310 CATE 044 951,000 37,556 - 37,556 254,866 - 254,866

U.S. DEPARTMENT OF TRANSPORTATION Passed through the Wisconsin Technical College System Board Interagency Hazardous Materials Public Sector Training and Planning Grants 20.703 n/a 5,986 - 5,986

U.S. DEPARTMENT OF VETERANS AFFAIRS VA Educational Reporting Fee 64.027 n/a 2,285 - 2,285

63 64 Blackhawk Technical College District Blackhawk Technical College District

Schedule of Expenditures of Federal Awards (Continued) Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2012 Year Ended June 30, 2012

CFDA/ CFDA/ Grant Grant Revenue Grant Grant Revenue Agency/Program/Grant Title Number Amount Federal Match Expenditures Agency/Program/Grant Title Number Amount Federal Match Expenditures

U.S. DEPARTMENT OF EDUCATION (continued) U.S. DEPARTMENT OF JUSTICE Passed through the Wisconsin Technical College Passed through Wisconsin Office of Justice Assistance System Board Homeland Security Grant Program 97.067 Adult Education-Basic Grant to States 84.002 Homeland Security / Task force training 2010-HS-03-8770 Integrated English & Civics Education 05-445-146-162 26,640$- 26,069 $$ 26,069 038 6,657$ 2,086 -$ $ 2,086 Adult Basic Education 05-646-146-122 187,500 181,590 280,764 462,354 ABE Rock County Prisoners Project 05-825-146-112 57,010 57,010 19,003 76,013 TOTAL EXPENDITURES OF FEDERAL AWARDS $ 16,640,109 $ 574,366 $ 17,214,475 Total 84.002 264,669 299,767 564,436 Career and Technical Education - Basic Grants to States 84.048 Career Prep 05-073-150-212 34,720 21,741 - 21,741 Program Improvement Research 05-423-150-252 79,549 25,065 - 25,065 Student Support Services - Non Traditional 05-424-150-262 19,886 14,847 - 14,847 Student Support Services/Guidance & Counseling 05-471-150-232 298,303 298,303 274,599 572,902 Total 84.048 359,956 274,599 634,555

Passed through the Wisconsin Department of Public Instruction Even Start - State Educational Agencies 84.213 Even Start Family Literacy - Year 12 1176505BTCCG13ESFL 112,375 3,418 - 3,418 Total 84.213 3,418 - 3,418

Total U.S Department of Education 16,356,528 574,366 16,930,894

65 See accompanying notes to the Schedules of Expenditures of Federal and State Awards. 66 Blackhawk Technical College District Blackhawk Technical College District

Schedule of Expenditures of State Awards Schedule of Expenditures of State Awards (Continued) Year Ended June 30, 2012 Year Ended June 30, 2012

State Catalog/ Grant Revenue State Catalog/ Grant Revenue State Agency/Program/Title Grant Number Amount State Match Expenditures State Agency/Program/Title Grant Number Amount State Match Expenditures Wisconsin Technical College System Board Wisconsin Department of Revenue Instructor Occupational Compentency 292.104 Occupational Competency Grant 05-639$ 454 $ 454 $ 454 $ 908 Exempt Computer Aid 835.109 n/a$- 61,050 $ $ 61,050 General State Aid 292.105 n/a 3,011,700 - 3,011,700 Wisconsin Higher Education Aids Board General State Aid Prior Year Adjustment 292.105 n/a 286,671 - 286,671 Wisconsin Higher Education Grants 235.102 n/a 956,913 - 956,913 Remission of Fees for Veterans and Dependents 235.105 n/a 77,636 - 77,636 Total 292.105 3,298,371 - 3,298,371 Minority Retention Grant 235.107 n/a 13,275 - 13,275 Handicapped Student Grant 235.112 n/a 2,700 - 2,700 Displaced Homemaker Grant Program 292.106 Talent Incentive Program 235.114 n/a 23,913 - 23,913 05-641-106-112 34,119 33,492 3,721 37,213 HEAB Nursing Student Loan Fund 235.117 n/a 13,235 - 13,235 Wisconsin Covenant Scholars Grant 235.108 n/a 3,500 - 3,500 Minority Student Participation and Retention 292.109 Wisconsin Covenant Foundation Grant 235.132 n/a 3,000 - 3,000 Minority Student Transitional Program 05-992-109-112 30,533 27,780 9,260 37,040

Total Wisconsin Higher Education Aids Board 1,094,172 - 1,094,172 Farm Training 292.111 n/a 310 - 310

Incentive Grants 292.112 Advanced Manufacturing 05-020-112-112 6,000 1,251 - 1,251 Pharmacy Tech 05-069-112-132 43,752 43,400 14,466 57,866 RECAP Health Literacy 05-071-112-162 12,928 9,866 3,289 13,155 Basic Skills Development/Transition 05-935-112-122 97,400 94,448 59,830 154,278 Total 292.112 148,965 77,585 226,550

67 68 Blackhawk Technical College District Blackhawk Technical College District

Schedule of Expenditures of State Awards (Continued) Schedule of Expenditures of State Awards (Continued) Year Ended June 30, 2012 Year Ended June 30, 2012

Transition Services to Individuals with Disabilities 292.115 Wisconsin Department of Transportation GPR Handicapped Transition 05-939-115-112$ 23,637 $723,638 $ ,878$ 31,516 Motorcycle Safety 20.395 (4) (aq) Motorcycle Safety Program 0094-11-08 23,134$ 119 $ 11,993 $ 12,112 Workforce Training Grant Program 292.116 Motorcycle Safety Program 0094-12-08 8,717 - 16,648 16,648 Angi 05-072-116-112 25,077 17,616 - 17,616 119 28,641 28,760 Advanced Manufacturing 05-076-116-112 102,456 82,316 - 82,316 Passed through Western Technical College District Wisconsin Department of Natural Resources Durst WAT Grant 02-853-116-112 13,379 8,996 - 8,996 State Aid in Lieu of Property Taxes 370.503 n/a 2,131 - 2,131 Total 292.116 108,928 - 108,928 Wisconsin Department of Corrections Faculty Development Grants 292.123 Passed through the Rock County Sheriff's Department 410.111 Technology Innovation Center 05-406-123-112 44,000 44,000 - 44,000 Rock County Basic Skills 11/12 932 $ 70,454 66,401 - 66,401 Technology Innovation Center Match 05-407-123-112 - - 44,000 44,000 Rock County Basic Skills 12/13 932 74,879 39 - 39 Total 292.123 44,000 44,000 88,000 Total 410.111 66,440 - 66,440

Fire Fighter Training 2% 292.137 n/a 23,885 - 23,885 Wisconsin Department of Workforce Development Youth Apprenticeship 445.107 General Purpose Revenue Increased Program Capacity 292.161 Youth Apprenticeship Program 066 70,380 70,380 35,190 105,570 Medical Assistant 05-040-161-112 38,412 41,082 45,636 86,718 Licensed Practical Nursing 05-068-161-112 165,562 165,562 - 165,562 Wisconsin Department of Justice Health Care Adv Instructional Technology 05-070-161-112 56,149 66,501 27,081 93,582 Law Enforcement Training Fund-Local Assistance Prog. 455.231 Total 292.161 273,145 72,717 345,862 Dignitary Protection 12-021 3,844 3,263 - 3,263

TOTAL EXPENDITURES OF STATE AWARDS $ 5,280,523 $ 279,446 $ 5,559,969 Total Wisconsin Technical College System Board 3,982,968 215,615 4,198,583

69 See accompanying notes to the Schedules of Expenditures of Federal and State Awards. 70 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Schedules of Expenditures of Federal and State Awards Notes to the Schedules of Expenditures of Federal and State Awards Year Ended June 30, 2012 (Continued) Year Ended June 30, 2012 Note 1 Summary of Significant Accounting Policies Note 3 Pass Through Funds to Subrecipients The Blackhawk Technical College District Board oversees the operation of Blackhawk During the fiscal year ended June 30, 2012, there were no funds passed through to a Technical College District (the “College”) under the provisions of Chapter 38 of the subrecipient. Wisconsin Statutes. The College includes the majority of Rock County and Green County. All significant operations of the College are included in the scope of the Office of Management and Budget Circular No. A-133 (Single Audit), Audits of States, Local Note 4 Reconciliation of Revenues to the Basic Financial Statements Governments, and Non-Profit Organizations and State of Wisconsin Single Audit Guidelines. Although the Department of Health Services has been designated as the The following is a reconciliation of federal awards per the Schedule of Expenditures of College’s cognizant agency for the Single Audit, certain responsibilities related to the Federal Awards, to the federal revenues per the College’s basic financial statements. single audit have been delegated by this department to the Wisconsin Technical College System. Revenues per Schedule of Expenditures of Federal Awards $ 16,640,109 Financial aid not recognized as revenue (8,504,564) 1. Programs Subject to Single Audit All significant federal and state awards received by the College (either directly Revenues per basic financial statements $ 8,135,545 from the federal government or the State of Wisconsin or passed through the State of Wisconsin) have been included in the Schedule of Expenditures of Federal and State Awards. The following is a reconciliation of state awards per the Schedule of Expenditures of State Awards to the state revenues per the College’s basic financial statements. 2. Basis of Presentation The accompanying Schedules of Expenditures of Federal and State Awards are Revenues per Schedule of Expenditures of State Awards $ 5,280,523 prepared on the accrual basis of accounting. Rock County Basic Skills (66,440)

Note 2 Federal Direct Student Loans (FDL) State revenue per basic financial statements $ 5,214,083 The FDL (Federal CFDA Number 84.268) is comprised of the following loan types: State revenues per basic financial statements:

Subsidized Stafford loans $ 5,334,525 Non-operating revenue $ 3,463,383 Unsubsidized Stafford loans 3,165,602 Operating revenue 1,750,700 Parent's PLUS loan 4,437 Total $ 5,214,083 Total FDL $ 8,504,564

71 72 Blackhawk Technical College District Blackhawk Technical College District

Schedule of Findings and Questioned Costs Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2012 Year Ended June 30, 2012

Section I - Summary of Auditor's Results (Continued) Section I - Summary of Auditor's Results Federal Awards (Continued) Financial Statements Identification of major federal programs: Type of auditor’s report issued: Unqualified CFDA Number Name of Federal Program or Cluster Internal control over financial reporting in accordance with GAGAS: Student Financial Assistance Cluster: Material weakness(es) identified? No 84.007 Federal Supplemental Educational Opportunity Grants Significant deficiency(ies) identified 84.033 Federal Work-Study Program not considered to be material 84.063 Federal Pell Grant Program weaknesses? None reported 84.268 Federal Direct Student Loan Program Noncompliance material to the 84.048 Career and Technical Education - Basic Grants to States financial statements? No Dollar threshold used to distinguish Federal Awards between Type A and Type B Programs $300,000

Internal control over major programs: Auditee qualified as a low-risk auditee? Yes Material weakness(es) identified? No Significant deficiency(ies) identified not considered to be material weaknesses? Yes

Type of auditor’s report issued on compliance for major programs: Qualified

Any audit findings disclosed that are required to be reported in accordance with Circular A-133 Section .510(a)? Yes

73 74 Blackhawk Technical College District Blackhawk Technical College District

Schedule of Findings and Questioned Costs (Continued) Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2012 Year Ended June 30, 2012

Section I - Summary of Auditor's Results (Continued) Section III – Federal and State Financial Assistance Findings and Questioned Costs

State Financial Assistance 2012-01 Allowable Costs – Compensation for Personal Services

Internal control over major programs: Program Affected – Career and Technical Education – Basic Grants to States (CFDA Material weakness(es) identified? No No. 84.048) from the Department of Education. Significant deficiency(ies) identified not considered to be material Compliance Requirement weaknesses? None reported OMB Circular A 87, Cost Principles for State, Local, and Indian Tribal Governments, Type of auditor’s report issued on Appendix B, Selected Items of Cost, Part 8, Compensation for Personal Services, Section H. compliance for major programs: Unqualified Support of Salaries and Wages: Any audit findings disclosed that are required to be reported in accordance x Charges to federal awards for salaries and wages, whether treated as direct or indirect with the State of Wisconsin Single costs, will be based on payrolls documented in accordance with generally accepted Audit Guidelines ? No practice of the governmental unit and approved by a responsible official(s) of the governmental unit. Identification of major state programs: x CFDA Number Name of State Program or Cluster Where employees are expected to work solely on a single federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the 235.112 Handicapped Student Grant employee worked solely on that program for the period covered by the certification. These 292.105 State Aid for Technical Colleges certifications will be prepared at least semiannually and will be signed by the employee or 292.112 Incentive Grants supervisory official having firsthand knowledge of the work performed by the employee. 292.116 Worforce Advancement Training Grants x When employees work on multiple activities or cost objectives, a distribution of their 292.161 Health Care Education salaries or wages will be supported by personnel activity reports. Such documentary Section II - Financial Statement Findings support will be required when employees work on:

There were no findings required to be reported in accordance with Generally Accepted a) More than one federal award. b) A federal award and a nonfederal award. Government Auditing Standards. c) An indirect cost activity and a direct cost activity. d) Two or more indirect activities which are allocated using different allocation bases. e) An unallowable activity and a direct or indirect cost activity.

x Personnel activity reports or equivalent documentation must meet the following standards:

a) They must reflect an after-the-fact distribution of the actual activity of each employee. b) They must account for the total activity for which each employee is compensated. c) They must be prepared at least monthly and must coincide with one or more pay periods. d) They must be signed by the employee.

x Budget estimates or other distribution percentages determined before the services are performed do not qualify as support for charges to federal awards.

75 76 Blackhawk Technical College District Blackhawk Technical College District

Schedule of Findings and Questioned Costs (Continued) Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2012 Year Ended June 30, 2012

Section III – Federal and State Financial Assistance Findings and Questioned Costs (Continued) Section IV – Prior Year Findings and Questioned Costs

2012-01 Allowable Costs – Compensation for Personal Services (Continued) None reported.

Condition Noted Section V – Other Issues During procedures performed, we noted salaries and benefits charged to the Career and Technical Education program which were not properly supported by semiannual certifications Does the auditor's report or the notes to the financial statements include disclosure or monthly personnel activity reports. with regard to substantial doubt as to the auditee's ability to continue as a going concern? No Known Questioned Costs: $444,837 Does the audit report show audit issues (i.e., material noncompliance, nonmaterial Recommendation noncompliance, questioned costs, material weakness, reportable condition, management letter comment, excess revenue or excess reserve) related to We recommend the District implement policies and procedures that make sure wages and grants/contracts with funding agencies that require audits to be in accordance with benefits charged to grants are supported by semiannual certifications, personnel activity State of Wisconsin Single Audit Guidelines: reports, or equivalent documentation. Wisconsin Department of Justice No Wisconsin Department of Revenue No Contact Wisconsin Higher Education Aids Board No Wisconsin Technical College System Board No Andy McGrath Wisconsin Department of Transportation No Wisconsin Department of Corrections No Action Plan Wisconsin Department of Public Instruction No Wisconsin Department of Workforce Development No Beginning in December 2012 the District will complete personnel activity reports for all Wisconsin Office of Justice Assistance No employees who work on multiple federal awards or cost objectives. These reports will be based on detail time records maintained by each of the employees. Beginning in January Was a Management Letter or other document conveying audit comments issued 2013 semiannual certifications will be prepared for all employees who work on a single federal as a result of this audit? Yes award or cost objective.

Anticipated Implementation Date – December 2012

/s/ Dan Walker, CPA______Name and signature of Partner Dan Walker, CPA

Date of report November 26, 2012

77 78 Blackhawk Technical College District

Financial Trends - Net Assets by Component Statistical Section Last Ten Fiscal Years

2012 2011 2010 2009 2008 2007 2006 2005 2004 2003

Invested in Capital Assets, net of related debt$ 13,773,483 $ 12,995,897 $ 11,772,244 $ 9,784,782 $ 8,190,171 $ 7,139,203 $ 6,906,562 $ 6,364,030 $ 6,331,000 $ 5,184,560

Restricted for: Debt service 546,942 458,951 726,981 668,855 627,815 582,524 367,882 314,691 824,149 671,235 Student financial assistance 112,813 139,077 154,585 170,211 176,564 184,025 182,468 173,938 170,737 140,606

Unrestricted 13,079,279 13,308,342 13,312,383 11,628,040 9,631,800 8,467,309 7,864,841 7,582,301 6,772,962 5,679,843

Total Net Assets$ 27,512,517 $ 26,902,267 $ 25,966,193 $ 22,251,888 $ 18,626,350 $ 16,373,061 $ 15,321,753 $ 14,434,960 $ 14,098,848 $ 11,676,244

Blackhawk Technical College District Blackhawk Technical College District

Financial Trends - Changes in Net Assets Revenue Capacity - Equalized Value of Taxable Property (in Thousands) Last Ten Fiscal Years Last Ten Fiscal Years

Tax Total 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Calendar Personal Increment Total District (a) (b) (c) (d) Operating Revenues Year Residential Commercial Manufacturing Other Property Districts Value Value Tax Rate Tuition and fees, net of scholarship allowances $5,223,666 $ 6,456,293 $ 6,845,709 $ 6,122,175 $ 4,504,073 $ 4,178,188 $ 3,923,645 $ 3,790,251 $ 3,792,677 $ 2,700,383 State aids 1,750,700 1,419,869 1,439,854 1,339,492 1,285,291 1,268,348 1,655,481 1,404,983 1,266,420 1,459,727 2002 $ 6,338,631 $ 1,525,274 $ 335,177 $ 715,452 $ 296,882 $ (180,031) $ 9,031,385 $ 8,605,885 1.71698 Federal grants 8,133,996 8,469,065 7,126,315 4,263,090 3,589,961 3,320,055 3,222,849 3,293,238 3,230,323 3,407,258 Contract revenue 594,867 697,487 779,501 618,280 477,516 553,940 551,294 1,198,305 933,417 1,196,477 2003 6,675,162 1,594,298 339,097 678,523 286,870 (199,814) 9,374,136 8,914,744 1.81597 Auxiliary revenues 282,914 247,241 357,488 272,117 273,400 260,466 293,788 183,210 165,703 159,782 Miscellaneous - institutional revenue 662,183 641,816 411,035 485,953 258,339 252,293 293,423 231,735 200,167 278,906 2004 7,168,637 1,678,346 351,195 720,252 279,233 (208,472) 9,989,191 9,471,022 1.75083 Total program revenues 16,648,326 17,931,771 16,959,902 13,101,107 10,388,580 9,833,290 9,940,480 10,101,722 9,588,707 9,202,533 2005 7,827,823 1,800,418 361,768 766,644 296,266 (250,658) 10,802,261 10,214,313 1.72164 Operating Expenses Instruction 19,169,314 20,279,840 19,323,435 17,535,638 16,282,231 16,137,721 15,660,520 15,357,735 14,492,317 14,413,339 2006 8,512,209 1,978,318 371,268 815,718 318,624 (312,223) 11,683,914 11,003,526 1.67007 Instructional Resources 2,704,827 2,600,517 2,630,316 2,460,755 1,846,397 2,419,781 1,784,289 2,249,173 1,477,389 1,588,587 Student Services 4,037,014 4,184,598 3,679,753 3,165,148 3,011,421 2,943,996 2,891,992 2,714,411 2,644,652 2,497,160 General Institutional 5,412,688 5,546,868 4,939,664 4,658,205 3,975,055 4,001,021 3,943,479 3,671,690 3,721,861 3,454,703 2007 9,033,670 2,161,346 413,272 825,781 343,797 (444,155) 12,333,711 11,597,147 1.69413 Physical Plant 2,170,602 2,333,691 2,207,373 2,070,089 1,932,358 2,023,007 2,153,707 2,671,772 1,381,252 1,999,712 Student Aid 3,809,185 4,531,422 3,872,504 2,410,983 1,805,477 1,470,579 1,607,867 1,654,815 1,664,659 801,034 2008 9,430,283 2,280,676 457,174 856,987 376,494 (531,580) 12,870,034 12,097,838 1.70489 Auxiliary Services 247,789 324,500 338,978 297,536 280,639 292,333 313,428 233,122 199,515 187,802 Depreciation 1,229,306 1,215,457 1,207,977 1,212,153 1,207,014 1,186,933 965,384 859,650 828,963 738,605 2009 9,355,578 2,332,842 428,157 854,556 377,729 (589,753) 12,759,109 11,998,811 1.72928 Total operating expenses 38,780,725 41,016,893 38,200,000 33,810,507 30,340,592 30,475,371 29,320,666 29,412,368 26,410,608 25,680,942 2010 8,856,866 2,260,519 426,033 859,021 364,471 (520,476) 12,246,434 11,501,174 1.72928 Operating loss (22,132,399) (23,085,122) (21,240,098) (20,709,400) (19,952,012) (20,642,081) (19,380,186) (19,310,646) (16,821,901) (16,478,409) 2011 8,582,442 2,252,419 425,730 868,838 357,674 (540,399) 11,946,704 11,229,424 1.78438 Non-operating Revenues (Expenses) Property taxes 20,105,061 20,060,889 20,851,419 20,739,773 19,724,414 18,431,063 17,624,908 16,654,551 16,238,857 14,849,958 Wisconsin Department of Revenue, Bureau of Property Tax State operating appropriations 3,469,369 4,739,837 4,923,842 4,336,620 3,740,079 3,802,490 3,487,399 3,743,857 3,906,680 3,217,275 Source: Investment income 48,891 81,072 118,643 170,780 385,929 514,974 462,034 327,480 263,150 173,835 Loss on disposal of property and equipment (104,598) (20,050) (106,941) (7,388) (692,021) (67,153) (288,403) (29,147) (11,634) - Notes: Interest expense (776,074) (840,552) (832,260) (905,147) (653,100) (987,985) (1,018,959) (1,049,983) (1,152,548) (739,415) (a) The TID's (Tax Incremental District) amount does not include the value of exempt computers. (b) Equalized value information for Rock and Green Counties. Total non-operating revenues (expenses) 22,742,649 24,021,196 24,954,703 24,334,638 22,505,301 21,693,389 20,266,979 19,646,758 19,244,505 17,501,653 (c) Small portions of Rock and Green Counties are not in BTC's district. Change in Net Assets $ 610,250 $ 936,074 $ 3,714,605 $ 3,625,238 $ 2,553,289 $ 1,051,308 $ 886,793 $ 336,112 $ 2,422,604 $ 1,023,244 (d) Tax rates are per $1,000 of BTC's equalized value.

80 81 Blackhawk Technical College District Blackhawk Technical College District

Revenue Capacity – Direct and Overlapping Property Tax Rates Revenue Capacity – Property Tax Levies and Collections Last Ten Fiscal Years Last Ten Fiscal Years

BTC Direct Rate Overlapping Rates(a) Collected within the Fiscal Other State Year of the Levy Total Collections to Date(b) Fiscal Debt School Gross Tax Net Fiscal Total Percentage Percentage Year Operational(b) Service Total County Local(c) Districts State Total Relief Tax Rate Year Tax Levy Amount of Levy Amount of Levy 2003 1.37 0.35 1.72 5.82 5.51 9.74 0.71 23.50 (1.53) 21.97 2004 1.37 0.44 1.81 6.11 5.74 10.00 0.77 24.43 (1.50) 22.93 2003 $ 14,776,156 $ 10,198,786 69.02% $ 14,776,156 100.00% 2005 1.36 0.39 1.75 5.97 5.62 9.92 0.75 24.01 (1.35) 22.66 2004 16,188,884 11,322,388 69.94% 16,188,884 100.00% 2006 1.33 0.39 1.72 5.71 5.38 9.06 0.77 22.64 (1.21) 21.43 2005 16,582,115 11,678,647 70.43% 16,582,115 100.00% 2007 1.28 0.39 1.67 5.37 5.16 8.65 0.83 21.68 (1.39) 20.29 2006 17,585,437 12,473,565 70.93% 17,585,437 100.00% 2008 1.30 0.39 1.69 5.31 5.18 8.92 1.05 22.15 (1.47) 20.68 2007 18,376,682 12,821,809 69.77% 18,376,682 100.00% 2009 1.31 0.39 1.70 5.29 5.16 8.69 1.16 22.00 (1.56) 20.44 2010 1.34 0.39 1.73 5.62 5.35 9.21 1.29 23.20 (1.55) 21.65 2008 19,662,050 13,688,087 69.62% 19,662,050 100.00% 2011 1.38 0.35 1.73 5.99 5.76 10.03 1.29 24.80 (1.60) 23.20 2009 20,625,490 14,098,573 68.36% 20,625,490 100.00% 2012 1.41 0.37 1.78 6.27 6.02 10.19 1.41 25.67 (1.63) 24.04 2010 20,749,303 14,114,630 68.02% 20,749,303 100.00% 2011 19,888,750 13,690,044 68.83% 19,888,750 100.00% Notes: 2012 20,037,522 13,963,864 69.69% 13,963,864 69.69% (a) Overlapping rates are those of local and county governments that apply to property owners within the District. Not all overlapping rates apply to all property owners within the District. For example, the county rate is made up of the rates for most of Rock and Green Counties. The individual county rates apply only to the property owners within each of those Notes: counties. These overlapping tax rates are an average of the rates for each municipality making up the detail in this column (a) Under Wisconsin law, personal property taxes and certain installment real estate taxes are collected by city, village, since each government can have a different rate. and town treasurers or clerks, who then settle with other taxing units, such as counties, technical colleges and local (b) The operational property tax levies for all funds except the Debt Service Fund. This rate may not exceed $1.50 per s.38.16 school districts. Settlements are due from the municipality by the 15th of the month following the due date based on of Wisconsin State Statutes. the municipality's payment plan. Certain installment real estate taxes and delinquent taxes are collected by the county (c) Cities, towns, villages and other special taxing districts (e.g., water districts, utility districts.) treasurers, who then settle with the city, village, and town treasurers and other taxing units before retaining any for county purposes. In practice, any delinquent real estate taxes are withheld from the county's share. Therefore, the District receives 100% of its levy upon receipt of settlement from the county treasurers, although the taxes collected as a percentage of total tax levy will vary in any given fiscal year due to timing of payments received from municipalities.

(b) Full levy is typically collected in mid-August. For 2012, $20,037,522 or 100% was collected by the end of August 2012.

82 83 Blackhawk Technical College District

Revenue Capacity – Enrollment Statistics – Historical Comparisons Last Ten Fiscal Years

2012 2011 2010 2009 Students Served (1) Associate Degree 3,987 4,060 3,787 3,114 Technical Diploma 1,028 1,492 1,498 1,211 Apprentices 72 83 94 140 Vocational Adult 5,751 6,279 6,382 6,479 Blackhawk Technical College District Community Service(4) 361 201 237 89 Basic Skills 1,556 1,880 2,107 2,288 Revenue Capacity – Principal Property Taxpayers Current Year and Ten Years Ago Total 12,755 13,995 14,105 13,321

(2) 2011 2001 Full-time Equivalent Enrollment Percentage Percentage of Total of Total Associate Degree 1,909 1,953 1,972 1,537 Equalized Equalized Equalized Equalized Technical Diploma 373 537 609 456 Taxpayer Name Valuation Rank Valuation Valuation Rank Valuation Apprentices 11 11 13 20 ABC Supply $ 63,385,638 1 0.56% Vocational Adult 81 89 85 96 Kerry Ingredients 51,152,811 2 0.46% Community Service 3 2 3 2 Dean/St. Mary's/Riverview Clinic 44,726,987 3 0.40% $ 20,816,445 5 0.25% Janesville Mall 35,499,988 4 0.32% 33,863,083 20.41% Basic Skills 188 238 234 248 Staples Contract & Commercial LLC 34,095,902 5 0.30% Total 2,565 2,830 2,916 2,359 Mercy Health System 33,309,611 6 0.30% Wal-Mart 23,278,045 7 0.21% GHC Specialty Brands LLC 22,318,723 8 0.20% 26,451,121 3 0.32% (5) Blain Supply Farm & Fleet 22,269,050 9 0.20% 23,244,778 4 0.28% Total Expenditures $30,120,133 $ 31,731,560 $ 30,722,911 $ 27,477,805 Frito-Lay 22,233,223 10 0.20% 17,904,040 9 0.22% General Motors 56,908,743 1 0.69% Inland Real Estate 18,801,764 6 0.23% Cost per full-time equivalent student$ 11,743 $ 11,213 $ 10,536 $ 11,648 Swiss Colony 18,099,552 7 0.22% Berwel, Inc. (Woodmans) 16,170,148 8 0.20% Individual 15,226,495 10 0.18% Graduate Follow-up statistics (3)

Total $ 352,269,978 3.14% $ 247,486,169 3.00% Number of Graduates N/A 1,082 1,053 839 Number of Respondents N/A 679 690 504 Total Equalized Valuation for the DistrIct $ 11,229,423,995 $ 8,250,713,736 Percent in workforce employed N/A 87% 87% 82% Percent employed in related occupations N/A 73% 77% 79% Median monthly salary N/A $22,600 $2,295$ ,935 Source: Employer contacts, Rock and Green Counties and municipality official statements. Provided by R.W. Baird & Co., Inc. Percent employed in district N/A 49% 62% 63% Percent employed elsewhere in Wisconsin N/A 29% 22% 29%

Average Age of students 34.4 33.8 34.6 34.0 Age range of students 6-92 11-91 11-95 9-93

Source: Institutional Advancement Department and basic financial statements.

84 (1) Students served represents the unduplicated count of citizens enrolled in BTC courses. (2) A full-time equivalent is basically equal to 30 annual student credits based on a mathematical calculation, which varies somewhat by program and which is subject to state approval and audit of student data. (3) Survey is conducted approximately six months after graduation, therefore, 2012 statistics are not available. (4) Community Service classes are non-credit hobby-type classes (5) For purposes of this calculation, expenditures are based upon the budgetary expenditures from the districts’ General and Special Revenue-Aidable funds as reported to the Wisconsin Technical College System. 2008 2007 2006 2005 2004 2003

2,644 2,406 2,412 2,482 2,563 2,542 990 875 1,031 1,155 1,431 1,213 149 139 141 143 209 205 6,810 8,778 9,205 9,579 8,432 8,949 Blackhawk Technical College District 65 195 326 397 274 343 1,880 2,091 2,212 2,694 2,565 2,509 Debt Capacity – Ratio of Net Debt to Equalized Valuation and Debt per Capita 12,538 14,484 15,327 16,450 15,474 15,761 Last Ten Fiscal Years

Percent of Net Debt 1,244 1,141 1,168 1,179 1,153 1,201 Less to Debt 336 333 329 362 383 375 Fiscal Equalized Outstanding Amounts Net Debt Equalized per (a) (b) (c) (d) 22 23 21 20 30 27 Year Population Valuation Debt Available Outstanding Valuation Capita 99 127 129 123 131 132 2003 181,706 8,605,885,415 26,960,000 671,859 26,288,141 0.31% 144.67 123545 2004 182,552 8,914,744,300 25,565,000 1,078,179 24,486,821 0.27% 134.14 203 214 221 241 234 239 2005 183,898 9,471,022,002 23,925,000 551,520 23,373,480 0.25% 127.10 1,905 1,840 1,871 1,930 1,935 1,979 2006 185,691 10,214,313,441 23,200,000 597,383 22,602,617 0.22% 121.72 2007 187,606 11,003,525,696 21,930,000 801,659 21,128,341 0.19% 112.62 2008 188,779 11,597,147,342 20,610,000 835,358 19,774,642 0.17% 104.75 2009 189,912 12,097,837,981 19,285,000 863,019 18,421,981 0.15% 97.00 $ 25,629,377 $ 25,054,081 $ 24,491,088 $ 23,359,216 $ 22,015,074 $ 21,804,821 2010 190,159 11,998,810,726 17,915,000 902,181 17,012,819 0.14% 89.47 2011 190,365 11,501,174,128 20,805,000 638,986 20,166,014 0.18% 105.93 $113,454 $ 3,616$113,090 $12,103$ 1,377$ 11,018 2012 190,404 11,229,423,995 20,165,000 712,536 19,452,464 0.17% 102.16 Notes: (a) Source - Wisconsin Technical College System (b) TID (Tax Incremental District) Out, excluding value of exempt computer equipment. Equalized valuations are shown on a calendar year 769 743 795 843 864 888 basis for the prior year (i.e. 2007 fiscal year would be 2006 calendar year information). 518 602 653 672 757 720 (c) Details regarding the District's outstanding debt can be found in the notes to the financial statements. 90% 91% 93% 96% 93% 90% (d) Equals the amount of funds available in the Debt Service Fund restricted for the payment of debt obligations. 88% 83% 83% 78% 74% 76% $22,463 $ ,340$22,533 $2,167$ ,080$ 2,056 60% 62% 67% 61% 68% 71% 29% 31% 29% 32% 26% 23%

34.4 36.1 36.3 36.0 35.2 35.2 9 - 92 9 - 97 9 - 90 9 - 87 9 - 92 9 - 92

85 Blackhawk Technical College District Blackhawk Technical College District

Debt Capacity – Direct and Overlapping Debt Debt Capacity – Direct and Overlapping Debt (Continued) As of June 30, 2012 As of June 30, 2012

Percentage Amount Percentage Amount Applicable Applicable Applicable Applicable Debt to the to the Debt to the to the Governmental Unit Outstanding District District Governmental Unit Outstanding District District

Overlapping debt Town of County of Adams $75,717 96.1%$ 72,764 Green $ 12,820,000 78.9% $ 10,114,980 Albany - 100.0% - Rock 39,475,000 99.8% 39,396,050 Avon - 100.0% - Total All Counties 52,295,000 94.7% 49,511,030 Beloit 6,278,085 100.0% 6,278,085 Bradford - 100.0% - Brooklyn - 43.3% - City of Cadiz 48,816 56.9% 27,776 Beloit 117,852,296 100.0% 117,852,296 Center - 100.0% - Brodhead 6,614,428 100.0% 6,614,428 Clarno - 100.0% - Edgerton 6,422,044 92.8% 5,959,657 Clinton - 100.0% - Evansville 16,180,871 100.0% 16,180,871 Decatur - 100.0% - Janesville 92,603,856 100.0% 92,603,856 Exeter 50,236 6.6% 3,316 Milton 15,260,907 100.0% 15,260,907 Fulton - 100.0% - Monroe 24,960,937 100.0% 24,960,937 Harmony - 100.0% - Total All Cities 279,895,339 99.8% 279,432,952 Janesville - 100.0% - Jefferson 60,412 100.0% 60,412 Village of Johnstown - 100.0% - Albany 139,227 100.0% 139,227 Jordan 56,941 90.5% 51,532 Browntown - 100.0% - La Prairie - 100.0% - Clinton 3,330,000 100.0% 3,330,000 Lima - 100.0% - Magnolia - 100.0% - Footville 3,149,874 100.0% 3,149,874 Milton 340,244 100.0% 340,244 Monticello 2,106,367 100.0% 2,106,367 Monroe - 100.0% - Orfordville 1,125,000 100.0% 1,125,000 Mount Pleasant - 100.0% - $ 9,850,468 100.0% $ 9,850,468 Total All Villages New Glarus 966,145 0.5% 4,831 Newark - 100.0% - Plymouth - 100.0% - Porter - 85.8% - Rock - 100.0% - Spring Grove - 100.0% - Spring Valley - 100.0% - Sylvester - 100.0% - Turtle 13,482 100.0% 13,482 Union - 96.1% - Washington 43,654 96.7% 42,213 York 60,295 0.9% 543 Total All Towns $ 7,994,027 86.3% $ 6,895,198

87 88 Blackhawk Technical College District Blackhawk Technical College District

Debt Capacity – Direct and Overlapping Debt (Continued) Debt Capacity – Direct and Overlapping Debt (Continued) As of June 30, 2012 As of June 30, 2012

School District of District Direct Debt Albany $ 2,611,466 100.0% $ 2,611,466 Argyle 1,750,000 33.0% 577,500 General Obligation Bond $ 7,413,384 100.0% $ 7,413,384 Beloit 20,751,397 100.0% 20,751,397 General Obligation Notes 12,038,910 100.0% 12,038,910 Beloit Turner 8,994,095 100.0% 8,994,095 Subtotal Direct Debt 19,452,294 100.0% 19,452,294 Brodhead 1,576,401 100.0% 1,576,401 Total Direct and Overlapping Debt $ 593,946,424 92.9%$ 551,559,546 Clinton 10,950,000 99.6% 10,906,200 Delavan-Darien 5,770,000 0.3% 17,310 Edgerton 5,963,271 73.4% 4,377,041 Statistical Summary Evansville 22,130,000 99.9% 22,107,870 Fort Atkinson 17,390,000 0.2% 34,780 2011 Equalized Valuation - TID In $ 12,487,102,300 Janesville 88,560,000 100.0% 88,560,000 Juda 2,415,000 100.0% 2,415,000 Total Direct and Overlapping Debt $ 551,559,546 Milton 4,230,000 98.6% 4,170,780 Monroe 12,395,000 100.0% 12,395,000 Direct and Overlapping Debt as a Percentage Monticello 1,485,000 100.0% 1,485,000 of Equalized Valuation 4.4% Parkview (Orfordville) 2,060,000 100.0% 2,060,000 Whitewater 11,813,624 6.1% 720,631 Population of District 190,404 Total All School Districts 220,845,254 83.2% 183,760,471

Direct and Overlapping Indebtedness - Per Capita $ 2,897 Special Districts Consolidated Koshkonong Sanitary District 3,544,107 73.0% 2,587,198 Source: Survey of each government unit with the District's boundaries, June 30, 2012 Fulton Sanitary District #2 62,435 100.0% 62,435 Juda Sanitary District #1 - 100.0% - Notes: New Glarus Sanitary District #1 - 100.0% - Plymouth Sanitary District #1 7,500 100.0% 7,500 Overlapping debt are those that coincide, at least in part, with the geographic boundaries of the District. Lake Leota District - 91.0% - This schedule estimates the portion of the outstanding debt of those overlapping governments that is Rock-Koshkonong Lake District - 53.7% - borne by the residents and businesses of the District. This process recognized, when considering the Total All Special Districts 3,614,042 73.5% 2,657,133 District's ability to issue and repay long-term debt, the entire debt burden borne by the residents and Subtotal Overlapping Debt $ 574,494,130 92.6%$ 532,107,252 businesses should be taken into account. However, this does not imply every taxpayer is a resident and therefore responsible for repaying the debt of each overlapping government.

The percentage of overlapping debt applicable to the District is the equalized property value of the overlapping government located within the District's boundaries as a percentage of total equalized value of all property for the overlapping government.

89 90 Blackhawk Technical College District

Debt Capacity – Legal Debt Margin Information Last Ten Years

2012 2011 2010 2009 2008 2007 2006 2005 2004 2003

Equalized valuation - TID In $ 12,487,102,300 $ 12,004,455,318 $ 12,571,369,516 $ 12,629,418,371 $ 12,041,302,232 $ 11,315,749,086 $ 10,464,971,831 $ 9,679,493,592 $ 9,114,558,790 $ 8,785,916,105

(a) Debt limit - 5% of equalized valuation 624,355,115 600,222,766 628,568,476 631,470,919 602,065,112 565,787,454 523,248,592 483,974,680 455,727,940 439,295,805

Aggregate Indebtedness

General obligation promissory notes 12,480,000 11,705,000 7,460,000 7,535,000 7,620,000 7,785,000 7,950,000 7,690,000 8,500,000 9,460,000 General obligation bonds 7,685,000 9,100,000 10,455,000 11,750,000 12,990,000 14,145,000 15,250,000 16,235,000 17,065,000 17,500,000 Less resources available to fund principal and (b) interest payments (712,706) (665,421) (919,509) (863,019) (835,358) (801,659) (597,383) (551,520) (1,078,179) (671,859)

Total net debt applicable to limit 19,452,294 20,139,579 16,995,491 18,421,981 19,774,642 21,128,341 22,602,617 23,373,480 24,486,821 26,288,141

Legal debt margin 604,902,821 580,083,187 611,572,985 613,048,938 582,290,470 544,659,113 500,645,975 460,601,200 431,241,119 413,007,664 Total net debt applicable to the limit as a percentage of debt limit 3.12% 3.36% 2.70% 2.92% 3.28% 3.73% 4.32% 4.83% 5.37% 5.98%

(a) Debt limit - 2% of equalized valuation 249,742,046 240,089,106 251,427,390 252,588,367 240,826,045 226,314,982 209,299,437 193,589,872 182,291,176 175,718,322

Bonded Indetedness

General obligation bonds 7,685,000 9,100,000 10,455,000 11,750,000 12,990,000 14,145,000 15,250,000 16,235,000 17,065,000 17,500,000 Less resources available to fund principal and (b) interest payments (271,616) (291,052) (536,615) (525,822) (526,507) (517,076) (392,676) (374,250) (719,700) (436,110)

Total net debt applicable to limit 7,413,384 8,808,948 9,918,385 11,224,178 12,463,493 13,627,924 14,857,324 15,860,750 16,345,300 17,063,890

Legal debt margin 242,328,662 231,280,158 241,509,005 241,364,189 228,362,552 212,687,058 194,442,113 177,729,122 165,945,876 158,654,432 Total net debt applicable to the limit as a percentage of debt limit 2.97% 3.67% 3.94% 4.44% 5.18% 6.02% 7.10% 8.19% 8.97% 9.71%

Notes:

Detail regarding the District’s debt can be found in the Notes to Financial Statements.

(a) Wisconsin State Statutes Chapter 67.03 provides that: 1) the aggregate amount of indebtedness of any municipality shall not exceed 5% of the value of the taxable property located in the municipality as equalized for state purposes and 2) for any technical college district, the bonded indebtedness for the purpose of purchasing school sites and the construction and equipping of school buildings may not exceed 2% of the value of its taxable property as equalized for state purposes. (b) Equals the amount Restricted for Debt Service on the Statement of Net Assets.

91 Blackhawk Technical College District Blackhawk Technical College District

Demographic and Economic Information – Demographic and Economic Statistics Demographic and Economic Information – Principal Employers Last Ten Calendar Years Current Year and Ten Years Prior

Annual 2012 2002 Public and Employees Rank Employees Rank Personal Per Capita Median Public Private Calendar Income Personal Number of Household School High School Unemployment (a) (a) (a) (b) (b) (c) (d) (e) Mercy Health Systems Health care facility 3,687 1 2,700 2 Year Population (000's) Income Households Income Enrollment Graduates Rate School District of Janesville Education 1,368 2 1,500 3 Rock County Government 1,170 3 1,400 4 2003 188,171$ 5,381,703 $ 28,600 79,301$ 45,847 33,312 2,151 5.92% Beloit Memorial Hospital Medical facility 1,002 4 860 9 2004 189,955 5,363,813 28,237 80,443 46,052 33,403 2,430 5.71% 2005 191,313 5,524,325 28,876 81,731 47,097 33,522 2,483 5.47% School District of Beloit Education 987 5 1,024 7 2006 193,581 5,926,074 30,613 82,995 47,681 33,870 2,158 5.22% Monroe Clinic Hospital Medical facility 917 6 2007 195,116 6,130,778 31,421 83,873 49,562 34,278 2,492 5.20% Hendricks Holdings Wholesale distribution 857 7 2008 197,245 6,474,632 32,825 84,474 52,316 34,442 2,575 5.10% GHC Specialty Brands Distributor of safety equipment & supplies 843 8 2009 197,083 6,227,256 31,597 84,594 49,662 34,405 2,633 9.44% Colony Brands Inc.(1) Mfgr./Mail order food and gifts 818 9 1,100 6 2010 197,160 6,410,233 32,513 84,278 47,860 34,138 2,675 11.69% Dean/St. Mary's/Riverview Clinic Medical facilities 731 10 2011 N/A N/A N/A 84,368 N/A 33,560 2,426 9.61% Truck and Bus Group, Division of Genral Motors Manufacture of vehicles 5,000 1 2012 N/A N/A N/A N/A N/A 33,529 N/A 8.47% Beloit Corporation Paper making industry 1,380 5 Lear Seating Corporation Seating for motor vehicles 900 8 Frito-Lay Snack Foods 800 10 Notes: (a) Source - US Department of Commerce, Bureau of Economic Analysis, for all of Green and Rock counties (b) Source - US Census Bureau, American Community Survey, for all of Green and Rock counties (c) Source - Wisconsin Department of Public Instruction, for all of Green and Rock counties Source: Green and Rock counties and official statements of municipalities within Rock and Green counties. Provided by R.W. Baird & Co., Inc. (d) Source - Wisconsin Technical College System School to Work reports for public graduates and Wisconsin Department of Public Instruction for private graduates (1) Colony Brands Inc. employs an additional 5,000-5,500 employees during the holiday season. (e) Source - Bureau of Labor Statistics N/A Not available

92 93 Blackhawk Technical College District Blackhawk Technical College District

Operating Information – Full-Time Equivalent District Employees by Employee Group Operating Information – Operational Expenditures per Full-Time Equivalent (FTE) Student Last Nine Fiscal Years Last Ten Fiscal Years

2012 2011 2010 2009 2008 2007 2006 2005 2004 Operational Expenditures(3) By Pay Groups: (General and Special BTC Operational Statewide Operational Full-time instructors 111 114 117 109 101 103 102 108 104 Revenue-Aidable Funds) Student Enrollments Expenditure per Student Expenditure per Student Part-time instructors 38 43 42 38 28 26 32 33 26 Administration 75 74 74 72 71 74 76 74 71 Full-time Percent Percent Part-time support personnel 27 30 27 30 26 28 32 31 31 Amount Percent Equivalent Increase/ Per FTE Increase/ Per FTE (1) Full-time clerical and custodial 43 42 43 41 41 42 44 45 47 Year (in 000's) Increase Students (Decrease) Students (Decrease) Students Rank

Total 294 303 303 290 267 273 286 291 279 2003 $ 21,805 7.3% 1,935 4.8%$ 11,269 2.4% $ 11,406 8

2004 22,015 1.0% 1,978 2.2% 11,130 -1.2% 11,541 7 Source: Human Resources Department - employee FTE count as of June 30 of each year. 2005 23,359 6.1% 1,929 -2.5% 12,109 8.8% 12,170 10

2006 24,491 4.8% 1,870 -3.1% 13,097 8.2% 12,813 11

2007 25,054 2.3% 1,840 -1.6% 13,616 4.0% 13,567 11

2008 25,629 2.3% 1,905 3.5% 13,454 -1.2% 13,725 8

2009 27,478 7.2% 2,358 23.8% 11,653 -13.4% 13,705 3

2010 30,723 11.8% 2,916 23.7% 10,536 -9.6% 12,785 1

2011 31,732 3.3% 2,830 -2.9% 11,213 6.4% 13,172 1

2012 30,120 -5.1% 2,565 -9.4% 11,743 4.7% (2) (2)

Notes: (1) Rank among 16 WTCS districts. (1 is the lowest; 16 is the highest.) (2) Not yet available. (3) For purposes of this calculation, operational expenditures is based upon the budgetary expenditures from the Districts’ General and Special Revenue – Aidable funds as reported to the Wisconsin Technical College System.

94 95 Blackhawk Technical College District

Operating Information – Campus Statistics Last Ten Fiscal Years

2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Square Footage Campuses Main Campus - Janesville 291,452 291,452 291,452 291,452 291,452 291,452 291,452 291,452 204,286 204,286 Aviation Center 25,210 25,210 25,210 25,210 25,210 25,210 25,210 24,300 24,300 24,300 Beloit Campus 29,068 15,000 15,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 Center for Transporation Studies 30,846 30,846 30,846 30,846 30,846 30,846 30,846 30,846 30,846 30,846 Monroe Campus 24,203 24,203 24,203 24,023 24,023 24,023 24,023 24,023 12,000 12,000 Total for campuses 400,779 386,711 386,711 375,531 375,531 375,531 375,531 374,621 275,432 275,432

Facilities Administration Building 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 Storage Building - Central Campus 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 Storage Building - Admin 1,650 1,650 1,650 1,650 1,650 1,650 1,650 1,650 1,650 1,650 Total for facilities 11,400 11,400 11,400 11,400 11,400 11,400 11,400 11,400 11,400 11,400

(1) Grand Total 412,179 398,111 398,111 386,931 386,931 386,931 386,931 386,021 286,832 286,832

(1) The regional centers are not included in this schedule. The regional centers are not a significant part of the college operations.

Source: Buildings & Grounds Department

96 Blackhawk Technical College District

Financial Statements and Single Audit Years Ended June 30, 2013 and 2012

Table of Contents

INDEPENDENT AUDITOR'S REPORT ...... 1

MANAGEMENT'S DISCUSSION AND ANALYSIS...... 4

BASIC FINANCIAL STAT£MENTS Blackhawk Technical College District Statements of Net Position ...... 11 Janesville, Wisconsin Statements of Revenues, EJ

REQUIRED SUPPLEMENTARY INFORMATION Schedules of Funding Progress and Employer Contributions...... 40 Note to Required Supplementary Information ...... ~1

SUPPlEMENTARY INFORMATION General Fund - Schedule of Revenues. Expenditures, and Changes in Fund Balances - Budget and Actual (Non-GAAP Budgetary Basis) ...... 42 Special Revenue Fund - Operating -Schedule of Revenues. Expenditures, and Changes in Fund Balanoe - Budget and Actual (Non-GAAP Budgetcry Basis) ...... 43 Special Revenue Fund - Non-A;dable Funds - Schedule of Revenues, Expenditures, and Changes 1n Fund Balance - Budget and Actual (Non-GAAP Budget

OTHER REPORTS Independent Aud~or's R~ort on Internal ContrOl Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Independent Auditor's Report Performed In ACcordance wrth Govemment AurJttJng StanrJarrJs...... 58 Independent Auditor's Re;)Ort on Compliance For Each Major Program and on lnlemal Control Over Compliance Required by OMB Circular A-133 ...... 60 Schedule of E:xpendrtures of Federal Awards ...... 63 Schedule of Expendrtures of Stale Awards ...... 67 District Board Notes to the Schedules of Expenditures of Federal and State Awards ...... 71 BlaCkhawk Technical College District Schedule of Findings and Questioned Costs ..•...... •.•...... •...... ••...... ••...... 73 Janesville, W1sconsm

STATISTICAL SECTION (UNAUDITED) Financial Trends Report on the Financial Statements Net Posruon by Component...... 78 Changes in Net Position...... 79 We have audited the accompanying financial statements of Blackhawk Technical College Revenue Capacity District, (the "College") as of and for the years ended June 30, 2013 and 2012, and the related Equalized Value of Taxable Property...... 80 notes to the financial statements, which collee1ively comprise the College's basic financial D1rectand Overlapping Property Tax Rates ...... 81 statements as listed in the table of contents. Property Tax Levies • nd Collections ...... •.... 82 Principal Property Taxpayers...... •...... 83 EnrOllment StabStics- H1stonca1 Comparisons ...... __ ...... 84 Management's Responsibility for the Financial Statements Oebt Capacity Ratio of Net Debt to Equalized Valuation and Debt Per Cap~a ...... 85 Management is responsible for the preparation and fair presentation of these financial Direct and Overlapping Debt...... _ ... , ...... _ ...... 66 statements In accordance wltl'l accounting principles generally accepted In tne United States; Legal Debt Marg1n lnformat1on ...... 90 this Includes the design, implementatiOn, and maintenance of Internal control relevant to the Demographic and Econonic Information preparation and fair presentation of financial statements that are free from material Demographic and ~conomic Statistics ...... 91 misstatement, whether due to fraud or error. Pnncipal Employers ...... • ...... 92 Operatmg Information Full-Time EquiV31ent 1FT E) DIStrict Employees by Employee Group ...... 93 Auditor's Responsibility Operabonal Expenditures per FTE Student...... 94 Campus Statistics ...... 95 Our respons1bihty IS to express op1mons on these financial statements based on our audJI. We conducted our audit in accordance with auditJng standards generally accepted in the Umted States and the standards applicable to financial audits contained In Government Auditing Standards, ISSued by the Comptroller General of the UnHed States Those standards requ1re that we plan and perfonm the audrt to obta1n reasonable assurance about whether the finanaal statements are free of matertal misstatement.

An audit 1nvo1ves performing procedures to obtain audit evidence about tl'le amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment. including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments. the auditor considers internal control relevant to the entity's preparation an:J fair presentation of the financial statements 1n order to design audrt procedures that are appropriate in the circumstances, but not for the purpose of expressing an op11110n on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropnateness of accounting policies used and the reasonableness of sigmficant accounting estimates made by management, as well as evaluabng the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling In our opinion, the financial statements referred 10 above present fairly, In all material respects, such information dorectly to the underlying accounting and other records used to prepare the the financial position of Bla:khawk Technical College District as of June 30, 2013 and 2012, and financ1al statements or to the financial statements themselves, and other additional procedures "s changes in finanaal position and cash flows for the years then ended, m conformity with In accordance wrth audrtmg standards generally accepted in the Unled States. In our opiniOn, accounting principles generally accepted in the Umted States. the 2013 budgetary companson schedules and the schedules of expenditures of federal and state awards are fairly stated in all material respects in relation to the financial statements as a Other Matters whole.

Required Supplementary lnfonnation The "Stalts!tcal Section• listed in the accompanying table of contents, which is the responsibility of management, is presented for purposes of additional analysis and is not a reqwred part of the Accounting pnnciples generally accepted in the United States require that the Management's basic financial statements. The information has not been subjected to the auditing procedures Discussion and Analysis and the schedules of funding progress and employer contributions be appfied in the audit of the basic financial statements and, accordingly, we do not express an presented to supplement the bas1c financial statements. Such information, although not a part op1mon or provide any assurance on 11. of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial Other Reporting Required by Government Auditing Standards statements in an appropri3te operatiOnal, economic, or historical context. We have applied certain limited procedure$ to the required supplementary information in

Supplementary Information Wlpfl1 LLP

Our audit was made for the purpose of forming opinions on the financial statements that 2013 collec!tvely comprise the College's basic financial statements. The 2013 budgetary comparison :::E,-a-u-::C"'Ia-:i-re-, "'w~isconsi n schedules listed in the table of contents as supplementary information are presented for purposes of addiUona.l analysis and are not a reqUired part of the basic financial statements. The accompanying schedules of expenditures of federal and state awards are presented for purposes of additional analySIS as requ1red by U.S. Office of Management and Budget C~rcular A-133, AudJts of States, Local Governments, and Non-Profit Orgamzations and State Single Audit Guidelines, issued by the Wisconsin Department of Administration and are not a required part of the basic financial s:atements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financi

2 3 MANAGEMENT'S DISCUSSION AND ANALYSIS

Blackhawk Technical College (BTC) Management's Discussion and Analysis (MD&A) of its Management's Discussion and Analysis financial condition provides an overview of financial activity, identifies changes in financial positions, and assists the reader of these financial statements 11 focusing on noteworthy financial issues for the year ending June 30, 2013.

BTC IS a public institution of higher education whose m1ssion IS to proVIde quality educabon, traintng and economic development serv~ces to Rock and Green counties. To accomplish th1s mission, it is critical that BTC maintain a healthy financial position f01 the long term. BTC's goal is to accumulate suffioent net assets to ensure adequate reserves are available to accomplish this mission, whether it IS to implement new programs or to expand e~isting programs.

This annual financial report consists of a series ot financial statements, prepared in accordance with generally accepted accounting principles (GAAP), as defined in the Governmental Accounting Standards Board Statement 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments. and Statement 35. Basic Financial Statements-and Management's Discussion and Analysis-for Pvblic COlleges and Universities.

Statement of Revenues, Expenses, and Changes in Net Position

The Statement of Revenues, Expenses, and Changes in Net Position presents the revenues earned and expenses incurred during the year Activities are repated as either operating or no~perating depending upon the nature of the act1v1ty. In general. a public college such as BTC will report an operating deficit or loss, as GAAP classifies state appropriations and property taxes as non-operating revenues. Revenues received from taxpaye-rs In the form of tax le111es and state aid appropnations are considered non-operating revenues and Will reduce the operating deficit or loss or provide a net gain.

The following summary shows a condensed version of the Statement of Revenues, Expenses, and Changes in Net Position:

Increase (Decrease} 2013 2012 Amount ~ Operating Revenue $15,256,508 $16,648,203 ($1 ,391 ,695) (8.4)

Operating Expenses 38,117,309 38,n4,616 (657,307) (1 .7)

Non-Operating Revenues (Expenses) net 22,641,606 22,736,663 ~95,307) ___jQ&

Change in Net Position ,s 219,195l $610 250 'S929,445l ~

4 lnvesbnent income decreased by $22.741 or -46 5% due to lower interest rates on cash and Operat1na Revenues orwesbnents and a reductiOO 1n mvested funds Operaung revenues are the charges for sel'llices offered by the College During 2013, the Loss on disposal of property and equiprll8nt decreased by $58.747 due to fewer disposals College generated S15,25E,508 of opell;lilil~ 9 .80,,990 9,860 1913 (57'08) (0~) • PhysiC31 plant expenses decreased by $148,939 or -$.9% primarily due to a reduction 1n Long-term liabilities 161814.J66 16,762,445 52,321 0.3 equ1pment and cap1tal mprovements expensed Total Uabolities 231617,756 231622,643 (4,887) 0.0 • Generalmslltubonal elCI)enses decreased $117,168 or -2.2% due to a reductJoo m contract seMceS, software, and equipment purchases offset by incteases in salary and benefits NETPOSmON • AIIXIIIary set111ces declined by $86,500 or -34.9% due to the closure of 1M campus day care Net ~nvestment m capllal center. Assets 14,630,406 13,773,483 856,923 62 Instruction elQ)enses IIV'.Ieased by S101,120 or 0.5%. due to increased personnel expenses Restncted 576,273 659,755 (83,482) (12.7) DepreCiation expense mcreased by $162,501 or 13.2% due to an increase 1n captlal assets Unrestricted 12.0861643 13,079,279 (992,636) (7.6) Total Net Poslllon $2712931322 $2715121517 !S21g,195) (0.8} Non-Operating Revenue and Expenses Non-operallllg revenues and expenses are revenue and expense items not dorectly related to providing instruction Net non-operating revenues (expenses) decreased S95,057 or -0 4% Factors contributing to this net deorease include.

• State operat1ng approl)"lallons (General State Aid) decreased S623,443 or -18.0% due to a $240,471 pnor year aid payment received in 2012, and a $396,529 (-13 2%) reductiOn In current year aid State operating appropriations are allocated among the 16 Wisconsin Techmc;~l Colleges on a formula basis wh1ch considers student enrollment, a1dable costs, and an equalized prope-rty value index. Prop<~rty lax reven11AS inr-reased $415,d53 or 2 1% due to an Increase in debt &arvlce obligations 1n 2013

5 6 Assets The following schedule summarizes the major components of the Statement of Cash Flows:

Total assets decreased by $224,082, or -0.4%. Significant factors dnVIng lh1s decrease are as Increase (Decrease} fOllows: 2013 2012 Amount ~

Cash, cash equivalents, and investments decreased by $1,138,707 or -10.3%. This Net cash used for operabr~g decrease is the result of a planned reduction in unrestricted net position 1n 2013. activities $(20,936,147) $(20,625,538) ($310,609) 1.5 Net capital assets increased by S1 ,517,860 or 5.3% due to facility improvements and capital N~t cash p10Yilled IJy JIUII- equipment additions in excess of depreciation charges and asset disposals. capital financing activities 23,271 ,041 23,693,492 (422,451) (1 .8) Post-employment benefit assets decreased $529,246 or -13.8% due to the annual required Net cash used for capital contribution exceeding the current contribution to the other post employment benefits and related financing (OPEB) trust. activities (3,499,751) (3,229,465) (270,286) 8.4 Receivables decreased $73,989 or -1.0% due to the timing of payments received on various Net cash flow provided by accounts. investing activities 2,178,720 1,932,867 245,853 12.7 Net increase (decrease) in cash and cash equivalents $1,013,863 $ 1,771,356 'S757,493l '42.8l

Total liabilities decreased by $4,887 or 0.0% The net decrease in to~! liabilities is attribu1ed to: • Cash and cash equivalents increased by $1,013,863 in 2013, and by $1,771,356 in 2012. The increase in cash is largely attributed to the reduction in investments. Cash, cash Current liabilities decreased by $57,208 or -0.8% due to a reduction in accounts payable. equivalents, and investments decreased by $1,138,707 or -10.3%. This decrease is the Long-term liabilities increased by S52,321 or 0.3% due to the rssuance of new debt offset by result of a planned reduction in net position in 2013. the retirement of existing debt

Net Position Capital Asset and Debt Administration

The changes tn assets ard liabilities as described above resulted 1n total net position being The College's investment in capotal assets indudes land, land im;>rovements, buildings and decreased by $219,195 or -{).8%. Addobonal information regarding these changes is: improvements, leasehold improvements, equipment. and constructicn in progress_ On a GAAP basos, the College added $3,237,996 to capital assets dunng 2013, including the transfer of Net investment in capi:al assets increased by 5856.923 or 6.2%. The primary reason for $282,4 77 from con.~trudoon in progress to leasehold and build1ng improvements, and reflrP.d net thos Increase is the addilon of caprtal assets in excess of related debt. capital assets of $45,852 in equipment during the year The Cone:~e fonances the bulk of its Restricted net position decreased by $83,482 or -12.7% due to a planned reduction in debt capital assets through the issuance of debt. In 2013, the College incurred new debt in the seMce net position. amount of $4,100,000 for capital assets and facility improvements, and retired debt in the Unrestricted net positicn decreased by $992,636 or -7.6% due to the planned reduction of amount of $3,930,000 for a net increase of $170,000. The College continues to maintain a net position to support one-lime or limited duration expenses Moody's Investors Service Aa2 rating, and continues to meet all of its debt service requirements. Wisconsin state statutes limit the amount of aggregate and bonded indebtedness that the College can incur. The amount of debt outstanding falls well t>elow these thresholds. Statement of Cash Flows Financial Position The Statement of Gash Flows presents information related to cash inflows and outflows, summarized by operating, financing, capital and investing activities. This statement is important The College has a variety of funding sources including property taxes, state aid, student fees, in evaluating the College's ability to meet financial obligations as they mature. business and industry contract fees. investment income, federal and state grants and other sources to meet the expenses of the College. The State's 2011-13 budget bill (2011 Wisconsin Act 32) reduced general state aid to the Wisconsin Technical College System by 30% and imposed further restrictions on technical oollege levy authority Distrii;ts remained subject to the 1.5 operational mill rate cap; however, Act 32 froze the operational levy at the greater of the dollar amount levied in 2010 or the mill rate levied in 2010. The State's 2013-15 budget bill (2013 Wisconsin Act 20) pemnanently removed the 1.5 operationa mill rate cap and set the operational levy amount at the 2010 level with an adjustment to increase the levy for net new construction within the College's District. The Ina-ease 1n revenue for net new construction will be realized in the College's 2013-14 financtal statement.

7 8 OPEB Having served a large number of diSlocated YIOfl(ers folloWing the clos1Xe of GM's Janesvile Plant student enrollment IS now returning to a more normaliZed level. which 1s resulting 1n lower In 2008 the College started funchng ots obhgabons under Governmental Accounting Stan

Economic Factors

The College's dastnct covers most of Rock and Green County. The College's tax base decreased 2.44% in 201:! . Following declines of 2.36% in 2011 , and 4.15% in 2010. The College's tax base as now below 2006 valuations with little el\peclallon of growth 1n the near term. The local economy continues to struggle after General Motors closed their Janesville plant in 2009 puttrng 2.600 employees out of work. In addition, there have been other busanesses that have downsazed due 10 e1ther losing business to General Motors or indaredly due to unemployed workers ha"'ng less money to spend As of August 2013, Beloit had an unemployment rate of 10 9% and Janesville had 7.8% while the state of Wisconsin had 6.2% and the country had 7 2~ % unemployed. The top three industries in Rock County andude medical seMCes, educational services and government. In Green County, the top industnes are health care, antemet retail, and diSCOUill retad sales.

The counbes are stnvang to diVersify the local economy through the attractron and expansron of rndustnal and convrercral busmess and l'ldustry. Two radio-isolope manufacturers have selected tocatrons rn ROCk County for the development of their rnan.Jfactunng plants whrch are scheduled Ill the next tVJO years. A number of extsbng manufacturers have announced expansron plans wtth addt!Jonal capital 11vestment and the creation of new jObs an Rock County The COllege's Otstnct tS postltoned for economac recovery and the College •s dedacated to serv•ng the vrtal role of provldrng a qualified skilled workforce to meet the needs of new and existing busaness and tndustry

Challenges

The College experienced 54% enrollment growth over a two-year period beginning •n 2008, as a result of the General Motors plant closure. The College has partnered With econom•c development leadership to position ROCk and Green County as an attractive location for business and Industry. The College collaborates wrth IOCCII bus1ness and Industry to ensure educallonal programming and training services are relevant and effeCIJVe In meeting the workforce needs of the community. The College continues to invest an facilitieS and equ1pment to ensure that studentlearmng 1s an sync with the technologtes employed m the workplace.

9 10 Blackhawk Technical College District

Statements of Net Position Jun& 30 2013 and 2012 Basic Financial Statements 2013 2012

ASSETS CUrrent assets Qwll UIIO """'' llqUiw!Wft• &.332.1&7 $ 5,31&,324 hvestments 3.614,674 5,767.244 Recei\ables: Pr<>perty taxes 6,163,071 6,073,658 Fedenll and s1a1e aid 1.111,367 971.025 Ace

Noncurrent 31$ sets Net OPEB asset 2 .995.788 3.580.670

Capital assets 48,013,124 43,881,039 Loss: accumiJatod dcpmclation 15 937 589 15 123.364 Total capital assets. net oc depreciation 30.075.535 28.557.675

Total assets 50.911.078 $ 51,135.180

LIABILITIES Qm:nt "abt"ties AcCOI.Ills payable and acllgauons 3.540.000 3,430,000 Total current habihtJ.es 6.802.990 6.860.198

LOOQ:lerm oblklations less curren1 poak:pn General obligation debt payable 16,795,000 16,735,000 unamotttzed premium on general obligation Clel>t 19.766 27.445 Total tong-term Ol>logalions. 185s c..,.,nt ponoon 16.814.766 16.762.445

TotalliabiiJitles 23,617,758 23,822.643

NET POSITION Net lmestment in capital assets 14,630,406 13,773,483 Reslricteo lor: Debt ser.tee 477.794 548.942 Student financial aS-SIStance 98,479 112.813 lh"estricted 12.088.843 13.079.279

TOiill net position 27.283.322 27.512.517

$ !jQ,911,07tl s ~1. n~.1 eo

See accompanymg notes to fmancaal statements 11 Blackhawk Technical College District Blackhawk Technical College District

Statenwnta o f Revenues, Expenses and Changes In Net Position Statements of Cash Flows Fot !he Y..s EnDed ...... 30. 2013 and 2012 Fot lhe Years Encle6 ..kine 30. :<013 and 2012

2013 2012 2013 2012 Ca$h lowJ from ODef'JtlOO ICtNt!le~ Ooetal1!!9; reo.enuae: TutlOn and ptOOram 1ees ne1 clscholarshop allowances F-and slate gnonls- 11.~,7115 9.85Q.721 c1 S3,e:ze.22lltn 2013 ane $3.300.975., 2012 $ 4,411.123 $ 5.221.~ O,.lLICM.!( IQ\Q'UN 7B1,1143 !!fl2.454 Statoaods 1,554,800 1,750,700 Payments 10 employees (2~.59M58l (24,822,659) F-grants 7,764,061 IU35,545 Paymerts i:Jr matenals and 5er.aces (11,607,131) (12,597.248) Conll8elr.....,... 664,953 594,867 Awi;Jirary enterpn:se re\oen!Jes 1S5,2ee 282.914 Awcrhary enterpnso reo.enue 155,286 282,914 Olher m issuance o/ ~ dobl 4,100,000 3,300,000 S1uclent aod 3,228,572 3.1107.513 Ptineipol paod on capot:ll dobl (3,930.000) (3,940,000) AUXJIUI!y liNCIIS 161.289 247,789 l'llelest llllid on eaclllal clelli (720,308! U89335! Oeptec1atlon 1391.1107 1 229 JOe - cash und lor capla1 and rwt-1~ 8Clo~l• Q.499.7S1! Q.Z29.465! 38.117.309 38.774,616 easn tows tQm trr.est.na ac;tn.tt n ()petatong loss (;22.860.801! (;22, 126,413) ~ 01111\eslll\en!S (614,622) (1,631,533) Saleo/1rNelstments 2.787 192 3.515.509 Npnoswat•DQ ,..,.,., fCJQIOII$} tn.eslmenlontome- 26.150 46,891 Property tax• 20.520 514 20105.061 Nel eash ~by acw~oe& 1,932,867 SUIIe cpetal"'9 appn:ip\8tlons 2_839 !loU) 3483.383 .,.,.t.no ~ 178.720 lrM'll&.lmenl U11CCWT18 26.150 4e.891 Net oncreaso "'cash an:t oa5h 1.013.8153 t,n1.358 l~s on dospo5al cl pn:>pe1ty and eq

Increase (Ciec:rease) lnne1 poslbon (219,195! 610.250 Endo/.,-r s 8.332.187 $ 5,318.324 Net pocobon - be9

Seo accotnpanyong notes 10 nroncllll s1a1cments.

12 13 Blackhawk Technical College District Blackhawk Technical College District

Statements of Cash Flowe (Continued) Statements of Fiduciary Net Position - FO< lM Y..w Ended .Mle 30, 2013 end 2012 Blackhawk Technical College Post-EI'f1lloyment Benefits Trust June 30. 2013 and 2012 2013 2012 Bccone!I!OI!Of) ofopemtm k:JM IQ net c;mb Zl13 2012 used tK goeralm i!SlNites.; ASSETS ()pembnp IOU s 122.860.801) s 122.126.413) AdJustment to rwconc1te cperaiJng loss to Cu-rent Assets net cash used lor oporallng ach,.has Cash and cash equrwlents 0eptecl&t10tl 1,391,807 1.229.306 $ 8,238 $ 19,723 Ch:ll1gOS In assotc and hat>olltlos Shon-temr im.estments 319.471 232.206 Recei....tllea 163,402 903,651 Total Current Assets 3Pf18hng eeh"l"" '\.: $ ~.936,1471 $ !20,625,538! ~niUaDilill~ s $ 25,170 ~?>-~ Total l.Jabrltoes 25, 170 NET POSITION

,~~ Held in trust lor post-

Total Net Pos.tton $ '.825.083 $ 6,952.858

See aecompanyw~Q nocea to t'lancaal statements

See accompanying notes to~ statements.

14 15 Blackhawk Technical College District Blac khawk Technical College District Note'> to the BaJ>ic Financial Statement'> Statements of Changes In Fiduciary Net Position- Blackhawk Technical College Post-E""Ioyment Benefits Trust Note 1 - Summary of Sig nificant Accounting Policies For the Years Ended June 30. 2013 and 2012 Introduction: Blackhawk Technical College District (the College) is org;nized under state legislation 2013 2012 enacted in 1911 establishing vocational, technical, and adult education. The goals of the College are to ADDITIONS train peo~le for employment in a system flexible enough to permit adjustment to meet the needs of the community. with ptogmms offered on a part-time. lull-time. day and evening basis. Conlributlons Blackhawk Technical Cdlege s 406.463 $ 406.463 The geographic area of the College is compfised of most of Rod< Courty and the majority of Green County in south central Wisconsin. There are 52 municipalibes with an es6mated population of 189,865 and public school districts within the College's boundaries. The district contains 1,200 square miles ln-tment income (loss) 13 and operates campuses located in the cities of Beloit. Janesville and Monroe as well as an aviation center lnteresl 518 378 at the South Central Wisconsin Regional Airport and leaming centers in the surrounding communities. Diloidends 210.334 220,782 Capital ga1ns (losses)- ~ealized 212,669 (601) The governing body of the Cdlege is the District Board, which consists of nine member's. The members Capotal gams (losses) - unrealiZed 368 361 !158,583) are appointed to staggered three-year terms by the County Board chairpersons for Rock and Green counbes. whO meet once a year to appo1nt members to the t~ree open seats. Tile College Board Total ii'M!Stmem income 791,682 61,976 membership includes two employers, two employees, three additional members, one school district administrator and one elected official who holds a state or local office. The College Board powers are T¢Cal additions 1,198,345 468,43g established under the provisicns of Chapter 38 of the Wisconsin Statutes and include;

DEDUCTIONS • Authority to borrow money and levy taxes: • Budgetary authority; and Retiree benefits 294,537 362,230 • Authority over other fiscal and general management of the College whiCh inCludes. but is not lmestment expense 3,007 2,696 limited to. the authority to execute contracts, to exercise control over facilities and properties. to Administratiw expense 28.576 31,311 determine the outcome or diSposition of matters affecting the rectpients of the seMCes be1ng ~rovided, and to approve the hiring or retention of key managemant personnel who im~lement Board policy and directives. TOial

The College is approved to offer 47 associate degree and technical di~loma ~rograms . These include 24 Change 1n Net Posi!Jon 872,225 72,202 associate degree. 3 two-year technical diploma, 10 one-year technical

See accompanying notes to financial statements.

16 17 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Note$ to the Basic Financial Statement$

Note 1 - Summary of Signi~cant Accounting Policies (continued) Note 1 -Summary of Significant Accounting Policies (continued)

Tile ro110w1ng iS a summary or me more signlflcanL poliCieS. Budgets and Budgetary Accounting (continued):

Reoortino EntitY: The basic financial statements include an the accounts or all operatJons or the 4. Budget amendmerts during the year are legally authorized. Budget transfers (between funds coneoe·s tei)Oiting entity as gOveMM t>y its BOatd. TM coneoe·s tei)Oiting entity iS Msllte of two-thirds of the Disrnet Board. Unused appropriations lapse at the end of each fiscal year. The College is affiliated Vllth the Blackhawk Technical College FoundabOn, Inc. (Foundation), a not 6. Formal budgetary integraticon is employed as a planning device fO< all funds. The College for-profit corporation whose purpose is to solicit, hold, manage, Invest and expend endowment funds adopts an annual operating budget that is prepared on a different basis from the basic financial and other gofls. grants, and bequests exdusillely lor the maontenance and benefit of the College. The statements, which are prepared in accordance with GAAP. The budget differs from GAAP by Foundation os managed by a Dorector and an independent bOard of dtrectors. The financo.al activrtles of recognizing encumbrances as expenditures. Also. the budget coes not incorporate changes the Foundatoon are not lnc'uded on the College's financoat stat.ement:s as :toe College does not have the related to GASB statements Nos. 33, 34, and 35. ability to significantly 11fluence operations or designate management and no significant interdependency exists. Use of Estimates: In prepanng basoc financial statements in conformity with GAAP, the College os required to make estimates and assumptions that affea the reponed amounts of assets and liabilities New Accounting Pronouncement In June 201 1,1he GASB issued Statement No. 63, Fin811Cia/ and the disclosure of contingent assets and ~a bilities at the date of the basic financial statements and Reporting of Defened Out11ows ofResources. Deferred Inflows ofResou,ces . and Net Position. to the reponed amounts of revenues and expenses during the reporting period Actual resuHs could differ improve financial reporting by standardizing the presentations of deferred outflows or resources and from those esbmates. deferred inflows of resources and their effects on a govemmenrs net position. The College adopted this guidance as of July 1, 2012. Cash and Cash Equivalents: Cash includes amounts in petty cash, dem•nd deposits, and other short term interest-bearing deposits. Basis of Accountino and Finanoal Statement PresentabOn: For financoal statement reporting purposes. the College is considered a special-purpose govemment engaged only on business-type For purposes of the statement of cash flows, cash on hand, demand deposits with financial activrties. Accordingly. the basoc financial statements of the College have been prepared on the onstitutions. investments in the local Government Investment Pool ILGIP). and other short-term acctUal basis of accounting, whereby all revenues are recorded when eamed, and all expenses are Investments with matumy dates of less than ninety days from when purchased are considered cash recorded when incurred. This basis of accounting also requires the College to record depreciation equivalents. expense related to capital assets to spread the cost or these assets to the estimated period beneroting from them. Receivables and Credrt Pohcoes: Receivables are uncollateralized obligations which generally are due upon receipt Accounts re:eivable are stated at the invoice amount Account balances with invoices Operating revenues and expenses generally result from providing educational services or prOducing over thirty days old are considered delinquent. Payments of accounts receivable are applied to the and delivering goods in connection with the College's ongoing operations Amounts reported as specific invoices identified on the customers' remittance advice 0<, if unspecified, lo the eartiest unpaid operating revenues onclude (1) student lu1toon and fees, (2) charges to customers for goods or servoces invoices. provided, (3) state and fedaral operating grants, and {4) contracts with business and industry or school distncts. Operating expenses include all onslructional and admonostratrve expenses, and depreciatoon The carrying amount of accounts receivable is reduced by a valuation allowance that reflects on capital assets. All revenues and expenses not meeting this definition are reported as non-operating management's best estimate of amounts that will not be collected. The allowance for doubtful revenues and expenses. accounts is based on management's assessment or the collectability of specific student accounts and the aging of accounts receivable. All accounts or portions thereof deemed to be uncollectible are Budgets and Budgetary Accounting: The College's internal records are maintained on a fund basis as written off to the allowance for doubtful accounts. required by the WTCS. The C111lege fiiii<~M the pr11cedurn listed beiiiW in i1d11Ptir19 the iltlnUill budgets lor all governmental lund types thai are legally required. Prep3id Expen~:s: Prepa d balances are few payment~ made by the Colege for whid1 benefiW extend beyond June 30. 1. Property taxes are levied by the various taxing municipalities. The College records as revenue ots share of the local tax on the year levoed. lnventones: The College does not maintaon a sognificant amount of onventory and does not record 2 Public heanngs are conducted on the proposed budget prior to Dlslrict Board approval. onventory in 1ts financial records. 3. Prior to July 1, the ~udgcl is legally enacted through approval by ;toe District Board.

18 19 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Note$ to the Basic Financial Statement$

Note 1 - Summary of S igni~cant Accounting Policies (continued) Note 1 - Summary of Significant Accounting Policies (continued)

Capital Assets: Capital assets are valUed at historical ccst or estimated historical ccsl if actual Other Employee Benefit Amounts: historical cost IS not available. Donated capita! assets are valued at thear estimated fair value at the time of donation Compensated Absances • College employees are granted vacation in varying amounts in accordance with the provisions of union ccnlracls and College policy. Vacation earned is forfeited if not taken The costs of maintenance and repairs are charged to operations as incurred. Equipment assets within the allowable time period. The expense for vacation pay is recorded on the accrual basis. The having a cost of $5,000 or more per unit and building or remodeling projects of $15,000 or more are value of vested vacation pay including payroll taxes and retirement costs as of June 30, 2013 and capitalized. Depreaation on buildings and eqUipment 1s provided in amounts sufficient to relate the 2012, was approximately $88,000 and $84,000, respectively. cost of the depreciable assets to operations on the straight-line basis over the estunated service lrves. which range from three to fifteen years for equipment, 20 years for site Improvements. and 50 years Retirement Plan • The Col ege has a retirement plan covering substantially all of its employees, Which for remodeling, 50 years for buildings, and 65 years for infraslructures. is funded through contributions to the Wisconsin Retirement System (WRS). All contnoutions made by the College on behalf of its employees are reported as expenses When paid. See Note 6 for further Property Taxes and Taxes R"""'ivable: The Oistrid Board, under Section 38.16 of the Wisoonsin information on retirement plans. Statutes, may levy a tax not to exceed 1.5 mills on the full value of taxable propeny within the area served by the College for the purposes of operating and maintaining schools. The mill rate limitation is Post-Employment Health Dental and Life Insurance • The College provides post-retirement health not applicable to taxes levied for the purposes of paYing pnncipal and rnterest on general obligation care. dental and life insurance benefits to certain teachers. support staff and admonostrators under debt ISSued by the College that IS used for capital improvements and equ1pment acquisitions. contractual arrangements. Retirees must be 55 years old and have completed 12. 15, or 18 years of service to receive three. four. or five years of paid health insurance. respectively. Health care benefits The College communicates it~ property tax levy to Qty. villilge and town trea:oure~ or clerks in October are coocdinated with Medicare 3fter 3ge 65. Dental coverage Is availilb e only to College Pr~idents. of the fiscal year for whic~ the taxes are levied. The following dates are pertinent to the College's tax AI June 30, 2013, 30 eligible retirees are receiving benefits. The College completed the third bi-annual calendar. actuarial study to esUmate the costs and financial l abilities of this plan offered to its employees for the year ended June 30. 2013. The cost melllOd used in estimating the liability was the Projected Unit Levy date October 31 , or within 1 0 days of receipt of Credit Cost Method. In order to determine the employer's liability, the per capita claims were offset by equalized valuation, whichever is later the cost sharing features of the plan and the Medicare reimbursement The attrition period used was Tax bids are mailed Month of O"""'mber from date of hire to date of full eligibility for benefits (55 with 12 years of service). The Annual Lien date January 1 Required Contnbution (ARC) and the Actuanal Accrued Liability (AAL) are based upon Projeded Un1t Payments: Credit Accrued Liability as of June 30. 2013. The significant assumptions used in the computation Taxes paid on one instanment January 31 include a 7.0% discount rate. a health insurance premium rate trend or 10% in year 1 and declining to Taxes paid on two installments 5% in year 11 and remaining at that level thereafter for those under age 65, and a health insurance First installment due January 31 premium rate of 5.0% for those over age 65. Second installment due July31 Oelonquent taxes purchased by The College established a trust (Biad

The com boned tax rate rorlhe fiscal years ended June 30, 2013 and 2012, are as follows: On October 10, 2010, the College issued a taxable general obligatiOn p-om1ssory note'" the amount of $5,175,000 in order to substantially fund this liability. Based on the actuarial valuation and review 2013 2012 as of June 30, 2013. the best estimate for the AJ>J. of the College's post-retirement health care plan, Levy Levy wtuch is 134.18% funded and not included rn the acccmpany.ng basic fi•ancial statements at June 30, Mill~ to Amount Mill ~to Amount 2013.1S $5,831,611 , Operatong levy 1.43810 $ 15,886.757 1.41492 s 15.886.757 Debt ser\ice te"'l 0.41029 4,533,000 0.36945 4.148,765

Total propeny tax levy $ 20.421.757 $ 20.037.522

20 21 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Note$ to the Basic Financial Statement$

Note 1 -Summary of S igni~cant Accounting Policies (continued) Note 1 -Summary of Significant Accounting Policies (continued)

Other Employee Benefit Amounts (conOnued): Other Employee Benefit Amounts (continued}:

As of June 30, 2013, actuarial valuation, members of the plan consisted of the following: The funded status of the plan at June 30 was as follows:

Acti\<1: 2013 2012 FUlly eligible 8S AAL $ 5.831,611 $ 8.099,141 Others 124 Actuarial -.elue of plan assets 7.825.083 6.880.656 Retirees 47 SLO\IIAng spouses Unfunded (funded) actuarial accrued liability (UAAL) $ p .993.472l $ 1,218.485

TOial participants 259 Funded ratio (actuarial ..rue of plan assets/AAL) 134.2% 85.0%

Cowred payroll (acti\9 plan members) $ 15.480.212 $ 15.522.784 OPES cost is calculated based upon the ARC which represents a le~el of funding thaL if paid on an ongoing basis. is projected to cover the normal cost each year and amortize any unfunded actuarial R

2013 2012 Tuition and Fees: Tuition and fees are recorded, net of scholarships, as revenue in the period in which ARC $ 954.759 954.759 s the related activrty or instructiOn takes place Tuition and fees attnbutable to summer schcool programs Interest on OPES obligation (196,937) (229,438) are prorated on the basos of student class days occurring before and afte- the fiscal year-end. Adjustment to annual required contribuloon 233.525 272,065 State and Federal Revences: The College receives funding from various federal and state contracts Annual OPEB cost 991.347 997.386 and grants. Some or th~ rewnues are earned over fi~ periods different from the College and are subject to the Federal Single Audit Act and State Single Audit Guidelines. Contnbuhons made 406463 406463 State general aids are recognized as revenue in the entitlement year. Federal and state aids for Increase (decrease) in ne: OPES obligation 584,884 590,923 re•mbursable programs are recognized as revenue in the year the relaled program expenditures are incurred. Aids received prior to m eeting revenue recognition criteri~ ere recorded as uneemed revenues. Net OPEB (asset) obligation - Beginning of year ~.580.670! !4.171.593l

Scholarship AJiowances and Student Aid: Financial aid to students is reported in the basic financial Net OPEB (asset) obligation - End of year $ !2.995.786! p,580,670l s statements under the alternative method. as prescribed by the National Association of College and Unoversrty Busoness Officers (NACUSO). Certaon aod (loans. funds provoded to students as awarded by third partie$ and Federal Direct Lending) os accounted for as third-p~rty payments (credoted to the student's account as ~ the student made the payment). All other aid is ·eflected in the basic financial statements as operabng expenses or scholarship allowances, which reduce revenues. The amount reported as operating expenses represents the portion of aid that was proVIded to the student In the fom1 of cash. Scholarship allowances represent the portion of aid provoded to the student 1n the fom1 of reduced tuibon. Under the alternative method. these amounts are computed on a total College basis by allocating the cash payments to students. excluding payments for services. on the ratio of all aid to the aid not considered to be third-party aid.

22 23 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Note$ to the Basic Financial Statement$

Note 1 - Summary of S igni~cant Accounting Policies (continued) Note 2 ·Cash, Cash Equivalents, and Investments (continued)

Net Position: Net position is classified according to restrictions or availabi!Hy of assets for satisfaction CA!sh. cash equivalents. and investments are classllied as follOws a t June 30: of College obligations. N2:t investment in caprtal assets, represents tte net value of capital assets (property, plant and equipment) less the debt incurred to acquire or construct the assets and the 2013 2012 borrowed resources no! yo! expended. but restricled for capital purchases. Restricled net position for Restricted for: debt service can only be used to repay debt service costs (principal and interest) as they are levied lor Debt SeNce s 649,842 s 740.151 that specific purpose Restricted net position for student financial assistance can only be used lor Capital Projects 1,432.841 1.402.500 student financial assistance activrties. AU remaming net posonon is unrestncted for legal purposes, but Student Financial Assistance 701.741 653.179 may be des19nated lor specific purposes. 2,784,224 2.795,830 Note 2 ·Cash. Cash Equivalents. and Investments Unrestricted 7.162.637 8.289.738 Cash, cash equivalents, and investments are Classified in the College's Statements of Net Position and Statements of Cash flows as follows: Total cash, cash equhelents. and ln...,.tments $ 9.946.861 $ 11.085.568

2013 2012 Cash deposits: Cash equivalents are shown on the College's Statements or Net Position for the Blactthawk Technical casn on nano ~ 1,775 ~ 1,775 College Post-Employment Benefd:s Trust H S follows: Demand deposits 2,080,041 1.568.849 2013 2012 Total cash deposits "?J.-¢1 2,081,816 1.570,624 Cash equiloelents: cash on hand $ 100 $ 100 Cash equi\Oients: Wisconsin Local Go.emment lm.estmenl Pool 319,477 232.206 Wi.sconsin Local Gnment lrt~.eStment Pool 4.250.371 3.747.700 US Bank Money Marllet 8 138 19.623

Total cash and cash equiwlents 6,332.167 5,318.324 Total cash equi""'lenl$ $ 327.715 $ 251.929

lnwstments: Certificates of Deposit 3,613,837 5.766.272 Treasury securities 837 972 The College is authorized by Wisconsin Statute 86.0603 to invest in the following instruments:

Total cash, cash equwlents. and inwstments $ 9.946.861 $ 11.085.568 Obligations of the U.S Treasury and U.S. Agencies ObligatiOnS of any WISconsin county. city, drainage distnct. tec1nlcat college distncl village. town. or school district. Time deposits in any bank. trust company. or savings and loan assoaation that IS authorized to transact bus1ness in this state. rt the lime deposrts mature in not more than three years. The state's local government pooled mvestment fund. Ally secunty maturing in seven years or less with erther the highest or second rating category of a nationally recognized rating agency. Repurchase agreements with public deposaories. if the agreement Is secured by federal bonds or securities. Securities of open-end management investment companies or in•1estment trusts. il the portfolio Is limited to obligations of the U.S Treasury and uS. Agencies. Bonds ISSued by a local exposition dostrict

24 25 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Note$ to the Basic Financial Statement$

Note 2. Cash, Cash Equivalents, and Investments (continued) Note 3 -Accounts and Other Receivables

9onds issued by a local professional baseba Upark district. AecouniS receivables coru:isted Of the foUo\Wig on June 30: 9onds issued by the Unrversity of Wisconsin Hosprtals and Clonics Authonty.

The WISconson Local Government Investment Pool (LGIP) has compoled faor value information for all 2013 2012 securities in the pool and has provided a book value to fair value conversion factor. As of June 30, Student tuition and fees. net of allowance for 2013 and 2012. the conversion factors were 100%. doubtful accounts s 170.089 s 381.440 Conttacted seNces 89.470 215.618 The LGIP is part of the Stale Investment Fund (SIF), and is managed by the State of Wisconsin Other 58,061 24,306 Investment Board (SWIB) The SIF is not registered woth the SecuritJes and Exchange Commosslon, but operates under the statutory authority of Wisconson Chapter 25. The SIF reports the fair value of Total accOI.Wits and other recel\ebles $ 317,620 s 621,364 its underlying assets annually. Participants in the LGIP have the right to withdraw their funds in total on one day's notice.

Investments in the LGIP are covered by a surety bond issued by Fonancial Security Assurance. Inc. The bond onsures against loss arising from principal defaults on substantially all types of securities acqwed by me pool except u S. Government and agency secunbes. The bond proVIdes unlimited coverage on principal losses, reduced by any Federal Deposit Insurance Corporation (FDIC) and State of Wisconsin Guanantee Fund insurance. The College is exposed to marl

Custodial Cre

Cre

Concentration of Credit Risk: Concentrabon of credil risk is the risk of loss attnbuted to the magnitude of an organization's Investment on a single issuer. Any investment Which represents 5 percent or more of total investments is required to be disclosed. Exempt from this disclooure are investments issued or explicitly guaranteed by the U.S. government, investments in mutual funds, external investments pools, and other pooled investments. The College places no limit on the amount the College may invest il any one issuer.

Interest Rate Risk: Interest rate risk is the risk changes In mterest rates Will adversely affea the fair value or an lllVestment The College does not have a formal investment policy Which l1m11s Investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates

26 27 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Note$ to the Basic Financial Statement$

Note 4 - Capital Assets Note 4 - Capital Assets (continued)

FoiiOwlllQ are the changes in the COllege's capolal assets lor tne year endecl June 30, 2013: FOllOwing are tlle Changes In tne Ccnege·s capital assets lor the year endea June 30, 2012:

Bogi nning Endi ng Beginning Ending Balance Additions Oeledons B.ot3 nce Balance Additions Deletions Balance Capital assets not being depreciated: Capotal assets not being depreciated: Land s 462.500 $ s s 462.500 Land $ 482.500 s $ 20.000 s 462,500 Contstruction in progress 58.246 1,081,894 282.477 857.663 Contstruction In progress 92141 1 131 871 1165 766 58246

Total capital assets not oelng Total capital assets not being depn!coated 520,746 1,081,894 282,477 1,320,163 depreciated 574,641 1,131,871 1,185.766 520,746

Capital assets being depreciated. Capctal assets being depreciated; Land improo.ements 1,422,938 108,174 1,531,112 Land lmpro,.,ments 1,422,938 1,422,938 Buildings and lmpr01.ements 31,113.523 62.625 31,176,146 Buildings an

Total capital assets being Total capital assets being deprecoated 43,160,293 2.156.102 623.434 44.692.961 depreciated 41,752.552 1,957.562 549,621 43,160,293

Less accumulated depreciabon: Less acct.r11ulated deprec1aton: Lan

Total acc...nulated depreciation 15.123,364 1.391,807 577,582 15,937,589 Total accumUlated depcecoatlon 14,359,282 1.229.304 465,222 15.123,364

Net capital assets 28,557,675 $ 1.846.189 s 328.329 30,075,535 Net capital assets 27,967,911 s 1,880,129 s 1 ,270,365 28,557,675

Less general obligatoon debt {16,020,000) {16,705,000) Less gene

Add unspent general oblogation debt 1,235,808 1.259,871 Add unspent general ollligatlon aebt 1.172.986 1.235,808

Net im.estment in capital assets s 13,773,483 s 14,630,406 Net in,.,.tment In capital assets s 12,995.897 s 13,773,483

28 29 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Note$ to the Basic Financial Statement$

Note 5- Long-Term Obligations Note 5- Long-Term Obligations (continued)

Tnerollowlng Is a summar., o11ong-tem1 obligaoons ror me years ended June 30, 2013 and 2012- 2013 2012 Subtotal -earned lorward $ 6.635.000 $ 7,860.000 Balance Bal ance Due W ithin 07/ 01/12 Incre ases Decreases 06/30/13 One Ye ar 2005 $1 ,500,000 general obrogation promissory General Obligation Debt $ 20.165.000 $ 4,100,000 $ 3,930,000 s 20.335.000 $ 3,540,000 note payable to BMO Harris Bank. N.A .• Chicago. L. Unamortized premium 27.445 328 6.007 19.766 interest at 3.00%-3.65%, payable semiamually in April and October; I.QI)Iing principal payments $ 20.192,445 $ 4,100,328 $ 3.938.007 s 20.354.766 $ 3,540.000 are doe annuaUy on April 1 until maturity on Apnl 1, 2015. Proceeds used for budding impro'loUfllents, remodeling, and to acquire Balance Balanco Due Within eqUipment_ 225.000 330,000 07/ 01/11 Increases Decreases 06130/12 One Year General Obligation Debt $ 20,805,000 s 3,300,000 s 3,940,000 s 20,165,000 s 3,430,000 2006 $2,000,000 gen<>tal oblogatlon promissory Unamortized premium 26435 10 560 27 9 550 445 note payable to UMB Bank, N.A., Kansas City. MO, Interest at 4.00%-4.25%, payal>le $ 20,831,435 s 3,310,560 $ 3,949,550 $ 20, 192,445 $ 3,430,000 umiannually in April and October; ~rying princopal payments are dJe annually on Apnl 1 until maturity on April 1. 2016. ProceeDer. wrying principal payments are due annually on 2004 S1,500,000 ge""'"l obtogatoon promissory Apnl1 unbl matunty on Apn11 . 2018 Proceeds note payable to Banlc of Amenca, N.A ., Chicago. used ~ building im(l

Subtotal $ 6,635,000 s 7,860.000

30 31 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Note$ to the Basic Financial Statement$

Note 5- Long-Term Obligations (continued) Note 5- Long-Term Obligations (continued)

2013 2012 2013 2012 Subtotal - earned foiWard $ 16,735,000 s 20,165,000 Subtotal - earned forward s 8,955,000 s 10,745,000 2012 $4,100,000 general obligation promissory 2009 $2,500.000 general obligation promissOI)' note payable to UMB Bank, N.A. note payable to BMO Harris Bank. N.A.. Kansas City, MO. interast at 1.00%-2.00%, Milwaukee. WI. interest at 2.75%-3.75%. payable semoannuaJiy on Apnl and October: payable semiannually In April and October: "'ryong pnncopal payments are due annually on ~oaments. remodeling. and equipment. 3,600,000 to acquire equipment. 735,000 845,000 Total outstanding long-term obilgatoons $ 20.335.000 $ 20.165,000 201 o s 1 ,750 ,000 general obligation promissO

2010 55,175,000 taxable general obllgalion prorni5501Y note payable to BMO Hants Banle, N.A., Molwaukee. WI, Interest at 1.30%- 3.55%. payable semiamually in April and October: wrying pnncopal payments are due annually on Aplll 1 until matooty on Aptil 1, 2020. Procee

2011 53.300.000 general obligation promissO

Subtotal s 16,735,000 s 20.165,000

32 33 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Note$ to the Basic Financial Statement$

Note 5- Long-Term Obligations (continued) Note 6 - Retirement Plans (continued)

Pnne~pal and interest are ~ayable frOm irrevocable ad valOrem taxes levied on all taxable propMy in Tile payroll lor Olllege employees covered by the WRS for the ye;y ended June 30, 2013, was the Oostnct. The annual requ~rements to amortize all outstandong general obhgatoon debt, Including $16,399,301; the employees tolal payroll was $18,182,879. The total required contribubon, employee interest, at June 30 are as follOws: and employer portions, for the year ended June 30, 2013, was $2,058,222 or 12.6% of covered payroll. The payroll lor College employees covered by the WR.S lor the year ended June 30, 2012, Year Principal lnte.-est Total was $16.406.052; lhe employer's Ictal payroll was $18,176,164. The total requ~red contribubon, 2014 $ 3,540,000 s 609,125 s 4,149,125 employee and employer portJons, for lhe year ended June 30, 2012, was $1 ,919,395 or 11.7% of 2015 3,685,000 507,460 4,192,460 covered payroll. Total conbnbution for the year ending June 30, 2011, was $1.889,738. The employer 2016 3,560,000 398,650 3,958,650 made the employees' contribution to the plan for the year ended June 30, 2011 . 2017 3,335,000 288,995 3,623,995 Employees who retire at cr after age 65 are entitled to receive a retirement benefit. Employees may 2018 3,165,000 182,603 3,347,603 retire at age 55 and recewe acluarially reduced benefits The factors onfluencing the benefit are (1) 2019-2022 3,050,000 138,965 3,188,965 final average earnings. (2) years of creditable service, and (3) a formula factor. Final average earnings os t11e average of the employee's t11ree hiQh$$t years' earnings. Employees termlnabng $ 20,335,000 s 2.125.998 s 22,460,998 covered employment before beCOming eligible for a retirement benefit may withdraw their contributions and, by doing so, forfeit all rights to any subsequent benefit. For employ: es beginning participation on Wisconsin Statutes 67.03:1) provides the aggregate amount of indebtedness of a district shaD not or after January 1, 1990, and no longer actively employed on or after April 24, 1998, creditable service exceed 5 percent of the value of the taxable property located on the dostrict. The 5 percent limit at June in each of fove years os requored for eligobohty for a retirement annu~y. Partiapants employed prior to 30, 2013 and 2012, was $576,282.241 and $587,614,169, respecbvely. The actual net aggregate 1990 01" beginmng employment on or after April24, 1~8. up to and indud1ng June 30, 2011, are ondet>tedness of t11e College for 2013 and 2012 was St9,704.924 (net of reslticted net posruon of ommedoately vested. PartJcopants lnobally beginnong employment on or after July 1, 2011. are not $630,076) and $19,452,~ (net of restricted net position of $712,706), respectively. In addition, the eligible for a WRS retirement aMuity or lump sum retirement benefit until they have five years of maximum bonded indebledness of the College fot purchasing and constructing buildings and credi!able servke. If an employee were to leave prior to fulfilling the five year vesting requirement. equopment may nol exceed 2 percent of the value of the taxable property withon the District The 2 that employee would rernam elogoble to take a separabon benefit. The separabon benefit woukl percent lim" at June 30, 2013 and 2012, was $230,512,897 and $235,045,676, respectively The include the employee contnDutions (and onvestment returns) only. actual bonded indebtedness of the College lot 2013 and 2012 was S6,342,204 (net of reslticted net position of S202,796) and $7,413,384 (net of reslticted net position of $271 ,616), respectively. The WRS also provides death and dosability benefits for emplOyees. Eligibility and the amount of all benefits are determined under Chapter 40 of Wisconsin Statutes. The WR.S issues an annual financial report which may be obtained by writing to the Department of Employee Trust Funds. P.O. Box 7931, Note 6 - Retirement Plans Madison, Wl53707·7931.

All ehaoble ColleQe employees partiCI!l3te on the WRS. a cost-shanna multopte-emptoyer Public Employee Retirement System (PERS). Eligibifoty requirements are as follows:

Employees initially employed by a WRS employer prior to July 1, 2011 - Expected to be employed for at least one year and expected to wor1< at least 600 hours a year (440 hours for teachers).

Employees inaially employed by a WRS employer on or after July 1, 2011 - Expected to be employed for at least one year and expected to wor1< at least 1,200 hours a year (880 hours for teachers)

Covered employees in the general/teacherleducational support personnel category are required by statute to eontribule 8.85% of ll'leir salary to ll'le plan for 2013, 5.8% (July to December 2011 ), and !>.!!% (January to June 2012). For the year ended June 30, 21112 , the College made these conbnbutions for covered employees on the educahonal support personnel category. Employers are requited to contribute an actuanally determoned amount necessary to fund the remaonong prOjected cost of future benefots.

34 35 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Note$ to the Basic Financial Statement$

Note 7 - Expenses Classification Note 9 - Operating Leases

Expenses on !he Scnem~nt Of Revenues, Expenses and Changes tn Net PMition are classmed by TllO CoHoge·s operat1ng leases arn montll-to-mooth ana year-to-year ror instituuonal faCI!luos aM functton. Alternatively, the expenses could also be shown by type of expense, as follows for the year offtCEJ equipment. Total expense for all operating leases for the years e~ded June 30, 2013 and 2012, ended June 30. was approximately $273.200 and $233.400, respectively. Total M ure minimum lease payments at 2013 2012 June 30 are esbmated as lollows: Salaries and wages s 18,182.879 s 18.176.164 Employee benefits 7,088,733 7,026,969 Year Amount Tral.

Total opera1mg expenses $38,117,309 $38,774,616 Note 10 - ln&uranee

Districts Mutual Insurance: In July 2004, all sixteen WTCS technical coleges created Districts Mutual Insurance Company (DMII. DMI is a fully assessable mutual company authorized under Wisconsin Note 8 - Commitments and Contingencies Statute Chapter 611 to provide property, easuaHy. and liability insurance and risk management services to its members. The scope of Insurance protection provided by DMI is broad, covering Tne College receJVeS regJiar program a1ds from the WTCS Board based on aJdable expenditures. property at $350.000.000 per occurrence; general IJabilrty, auto. and educators· legal IJability at Th1s amount os subjeCt to adjustment based on a state audrt of the full·bme equ1valent students and S5,ooo,ooo per occurrence; ancl wot1

As of June 30, 2013. the College had approximately $898,000 in project commitments related to projects-in-progress at year-end

36 37 Blackhawk Technical College District Blackhawk Technical College District

Notes to the Basic Financial Statements Notes to the Basic Financial Statements

Note 10 -Insurance (continued) Note 11 - Subsequent Events

DMI ope~IIOIIS are govemell lly a five-member board of dlreaor.; Member colleges do not exercis. On OCiober !1, 2013, lll8 College ISSUed oenerlll obhgallOfl promQOJY notes on 111e amount o1 any c;ontrol ~ the acloW'JOS ol DMI beyood elecloon of the board of doredors at the annual "'"''"!I $5,240,000. The Pfoceeds are to be used lor cosls related 1o building IMPfOY&ments, remodeting and The board has the aulhotily to adopt rts own budget. set policy matters, and control the financial affairs the acquisition of equtprrent. The onterest rate vanes from 2.0% to 2.4% wrth the first principal ol the Company, payment due Apnl1, 2014.

At the start ol operations, each member college was assessed a charge for a caprtalozabon component On November 7, 2013, the College ossued genen~l obligation promluory notes in the amounts of to establish reserves for l!le Company For the years ended June 30, 2013 and 2012, the College $6,405,000 (20136 Notes) and $1 ,500,000 (2013C Notes). The PfOC4Hids from the 20136 Notes will paod p(emiums of approxunately $161,300 and $165,800, respecbvely, to DML Future premoums woll be used for the public purpose of current refunding certain outstanding obligations of the District. The be based on relevant rating exposure bases as weD as the historical loss experience by members. proceeds from the 2013C Notes woU be used for the purpose of payong the cost of financmg buoldong DMI's ongoing operational expenses, other than loss adjuslment expenses, are apponionell pro rata remodeloog and omprovement pro]ects. The Interest rate on the 20136 Notes vanes from 2 0% to to each parbctpanl based on equoty onterest on the Company. The audrted OMI financoal statements 4.0% wrth the first princapal payment due Apnl 1, 2014. The Interest ra:e on the 2013C Notes varies can be oblaoned through Olsbncts Mutual Insurance Co.. 200 W Grand Avenue Suote B. Port from 2.5% to 3.0% with the flfsl principal pByment due Apr;l 1, 2020. Washington. Wt 63074. Subsequent events have been evaluBted through ---· 2013, w<~ich is the date the financial Supplemental lnsu(Jnce. In July 1997, the WTCS technical c;olleges formed the WTCS Insurance statements were available to be ISSUed. Trust to jointly purchase commercial insurance to provide coverage for losses from theft of, damages to, or deslructJon olnsets. The trust os orgaDIZed under Wosconson Stalutes 66.0301 and os governed by • boord of tnJ:.tcca con311tJng of one ttu3tec from each member college:. Member c:nbbc~ InClude all sucteen WTCS dosbncts

The WTCS Insurance Trust has purchased lite following levels of c;overage from OMI for 1ts partlapahng members

Loablldy $5.000,000 "99"egate general; $1 ,000,000 auto pe< acadent. $1 .000,000 employee bene(rts, oncludes benefit lor acadental death ilfld dosmemberment, rep;otnabon, and mecloc:al expenses. S1 .000dedUCIIOie lOt employee benefits. Cnme $750.000 coverage lOt employee dJshonesly, forgety, compute< fraud and funds transfer fraud: $500,000 c;overage lor theft, robbefy, burglary disappearance and destrucloon of money and s8C1Kltoes· $25.000 c;overage lOt investigation expenses; $2,500 deductible lor lnvestJgaoon. S15,Xl0 daductillle lor employee

The College has purchase:! the lotlowong addibonal insurance.

AJ~n Hul and L80ri•IY s1 ,000,000 pe< occ:o.rence. $1,000 deductible. Alrf;r;lft General IJalllllty $10,000,000 per occurrence; $10,000,000 aggregate lomol, $1.000 deductible per aorcrall

The Trust finaneoal statements can be obtaoned through Lakeshore Tedlrucal College Oostnct 1290 North Avenue, Cleveland, WI 53015.

38 39 Blackhawk Technical College District

Schedules of Funding Progress and Employer Contributions Year Ended June 30, 2013

Schedule of Employer Contributions (Unaudited) Juno 30, 2013

Required Supplementary Information Annual Net Year Required Peruntage OPEB Ended Contribution of ARC (Asset) June 30 !ARC) Contributed Obligation 2013 s 954,759 42.6% (2,995,786) 2012 954,759 42.6% (3, 500,670) 2011 1,244,309 448.6% (4.171,593) 2010 1,243,928 88.4% 167,895 2009 854,460 97.1% 24,359

Schedule of Funding Progress (Unaudited) June 30, 2013

Acltrulal UAALHa Aeerued Pereentage ActuarbJ Liability (AAL) Unfunded AA1. of Actu•ri:~l V•lue of Projeetod (Funding Funded Covered Covered Valuation As.. ts Unit EJCcess) Ratio PayrOll Payroll Dllle !•l (b) (b-a) (alb) (e) ((b-a)le) 6130/13 $ 7,625.083 s 5,831,611 $ !1.993.• nJ 134.2% $ 15,480.212 -12.~ 6130111 8,880,656 8,099,141 1,218,485 850% 15,522,784 7.8% 6130109 496.255 9.417,090 8.920.835 53% 13.751.811 64.9%

See Independent Audilor's Report. See accompanying note to required supplementary information.

40 Blackhawk Technical College District

Note to Required Supplementary Information

Note 1

The College is required to present the Schedules of Employer Contributions and Funding Progress lnfonnabon for the three most recent actuarial studies. Studies have been completed as of June 30, Supplementary Financial Information 2013, 2011 aM 2009.

41 Blackhawk Technical College District Blackhawk Tech nical College Distr ict

General Fund- Schedule of Revenues. Expenditures. and Changes in Fund Balance Spedal Revenue Fund-Operating-Schedule of Revenues. EJ

Vanance wath Vanance wtth Actual on a Final Budget· Actual co a Final Budget· B~Amounts Budget!lfY Fal<>O15,6:>1 3llll,l!!i1 Total axpooditurw ;!,021,903 3,044,644 2,496,076 548,568 Physical plant 2,062,646 2,057,646 1,919,064 138,582 Re\eflUeS 0\ef (under) expenditures (203,000) (160, 146) 42,852 Total expenditures 28.465,122 29,085,701 27,950,024 1,135,1!77 Fund baltnce ~nues OlM2 77!> M2

Qlher fipanc1oo uses End dyear 775,852 s 572.852 s 615,704 s 42,852 0~"'9 t111,.._ oot (10,000) (80,962) (80.982) See Independent Audrtofs Repcrt.

Total ocher fi.nanctng U$e5 {10,000) (80,962) (80,982)

~nues and ocher fi naneing sC>.JtCes """ (_.) expendlh.res and athOl' il'l8IlC1f19 U$(t$ (814,727) (1,323,893) (64a,938) 474,755 fyod balance 8egun ng of year 12.233.451 12.233.451 12.233,451

End otvear s 11,418,724 s 10.909.7$8 s 11.384.513 474.755

S... tndepend... Aud"O<'$ Report

42 43 Blackhawk Technical College District Blackhawk Technical College District

Special Revenue Fund - No>n-Aidable Funds - Schedule of Revenues, Expendi1ures, and Capi1al Projects Fund - S.:hodule of Revenues, Expondi1ures, and Changes in Fund Balance • Changes in Fund Balance -Budget and Al:tual (Non-GAAP Budgetary Basis) Budget and Al:tual (Non-G.AAP Budgetary Basis) Year Enoed June 30. 2013 Year Ended .AJne 30. 2013

Variance YMh Vationee ..vith Actual on a Flnil Budget- Ac1ual on a 1'"1001 Budget· Bu~Amount.s BudgeliW}' F.....- B!:dget Amounts Budgetary Fa-.orable O!l2!!;!1 F"onal Basis !Unfao.orablel O!lpinal Final Basis !lJnla\oralllel .Bils!!llll. a- Sl2!c- $ 1,076.500 1,106.500 $ 954,130 s (152.370) Local g"""""""'t 9.573 s 9,7V 154 Fade

Expensitures 12,000 41.327 38.627 !4,700l CurrooL Student Sif!INC85 , 8,910,900 18,944,900 16,363.280 2,581,620 Expeadity!'H Generallfl5titutl00all 110,000 110,000 95,612 14.3811 Captal out!ayo Instruction 1.403.509 1.390.611 1.351.863 38.748 Total expenchtt..Jte$ 19,020.900 19.054,900 16,458,892 2.596.008 1,551,334 2,179,615 2.177,283 2.332 Student st!!!NC.es 43,533 (24,334) Rewnues. CMf (under) expenditures (30.000) (30.000) 5.11&6 ~· &nslltutional 43.182 53,178 8,705 Phy!!.c ol plant 669,534 1.260.033 1, 184,432 Otlvw- ·~·~ f/.I'II~Alil Operat.ng transfefs In 10.000 10.000 10,000 3.711.092 4,663.437 4.722.283 161.154

Rewrlue5 artd Qlher ~Nnc;ing 50Uf"0C5 (3.699,092) (4.842.110) (4.685,656) 1!i6.454 oo.er (under) ex.pencht~ end Gther ftnane.ng uses (20.000) (20.000) (14,334) 5.666 Ot!'te! fhlj)OC!na sources Ptoee

End olyear $ 92.813 $ 92.813 $ 98.479 s 5.666 OfbN lt\.lQSIM !MM Oporoting trans feB 01J1 !25,000! (25.000) (25,000! See ltldepen

Reo.enues and other lnanclng souces mer (under) expenditures and othe< financing ~.~SeS 375.- (767.110) (610.656) 1~.454

Fund INianc.e B'9M'ng of yew 1.003,96'9 1.003.96'9 1,003,969

End of year $ 1 379 877 $ 236859 $ 393 313 156 4S4

See Independent AuditOI's Report.

44 45 Blackhawk Technical College District Blackhawk Technical College District

Debt Service Fund - Schedule of Revenues. Expenditures. and Changes in Fund Balance - Enterprise Fund- Schedule of Revenues. Expenditures. and Changes in Fund Equity- Budget and Actual (Non-GAAP Budgetary Basis) Budget and Actual (Non-GAAP Budgetary Basis) Year Ended June 30. 2013 Year Ended ...,e 30, 2013

Venaoce wrth Vaoance With Act..al on a Final Bu<~Qe~· Actual on a Fanal Budget· & ldoet Arnoc.nts Budgetary F""""""" 8~t Amounts 8udge1able! ~ &nmm Local g

Total expend•!..., 4,560.050 4.653.087 4.642.629 10.458 Total eJ

Re\enues OWot (under) expendilures {22,050) (115,087) (107,630) 7,457 RC\ef"'IIJes CNI'X (under) expendftures pO.OOOj (34.~ (5.023! 29.872

Other fiMOC!OO S OU(Cttl QltM::c~IDa §:RU~:WH Operating tfilflSI'eB 1n 25,000 25.000 25,000 OpettUirtg tren:sfets in 90,962 90.962

Total ot11« financor19 soun:es 25.000 25.000 25.000 Total other 6~ng !lOii'Ces 90962 90962

Re-.enues and other financing sources Ottw firumcm us.u Opor.ltlng tr.onsfers out owr (unde<) expend•t"""' 2.950 (90,087) (82.630) 7.457 (20,000! ~.000!

Total other lnancing uses FuM M 1i!OGC ~0.000! ~-000! Begin,..ng of YeM 712.706 712.706 712.706 Rewnues and other inanclog $OU;rt. Betajoed eatr)iOOS Begimlog of year 345,099 345,099 345099

End o! year $ 335.099 381.186 $ 411.058 $ 29.872

See kldependent Aud~crs Ros>;n.

46 47

[THIS PAGE IS INTENTIONALLY BLANK] Blackhawk T echnical Colleg e District

Schedule to Roconoilo the Non- GA/IP Budgetary Combined Bo30. 2013

8-AIIMlnuef...S CopuiO ~ fntfiiPI"'U ...... -..ng Stti~.tmenaot 6~~ t:.W g11;1;B ~~~I:W ..... Non • A.ld3ble Pro,ocrs Fund S...... -..oFunrl ..... ~Ft..C ...... T ..... lt.w Pndlnn - """""""' mm - ·- Cash ana cash, oqu'molho

Total asn45 iilllld OCher deb«s s 13,363., ~~ 833.31) 711.028 1.432.641 649.642 426.87• 268.136 758.866 s 18.441.852 s 32.4$9.226 s 50.911.078

LIAEII.fiES EQUOY aMJ. QHB C:BECIIS l.ll!>!l!llu _..,.,_.,.At::co.ns payable 258,248 s 59,373 1.- $ tn.no IOM 4a!D,:\.'\A $ £QQ :\.1n 1.678.950 1$8.223 3.208 14,738 ""' 1.855.122 1,855,122 Accnef.-!1.. 1 152.282 152.282 Due to ocher l.nds 001.875 220 602,005 (002,0115) ruo 16 01~1 "''l'foo!otloM 756,2_47 750,247 75G,247 Genenll cbllgallan dabt payable N 20.~.000 20.335,000 lkNlmoni:zod premun on general cbligation dobt 19,71111 19.71111 19,760

TOlolll- 1,937,196 217.600 612.549 112.no 19,766 15,816 156,866 3,132.569 19,8&5,187 23.617,756

El.lld mB1tx BOd mi.: ~;;~ ~ ~tmeots. In caprtal 8$$.Cl($ 14.&0,406 ~ 4.630.406 ~ainld earn.ngs 411,058 411.058 11.675• .585 12JJ81j,fl43 Fund~n· -lordel> (152.282) Rill'"""' lei .... _ 630.07lS 630.076 477.794 393,313 383,313 (303.313) Resetwd for sel-iMurance 288,1311 2158, 1:38 (268. 1311) ~ b atudenlli....-oM .,_.,._tanc:. 8$,4 7g 88.419 98,479 ReseMdfo<"'"'*"kems 300.838 300,838 (300,838) UoveseNOd • Oosognotod lor -- 6,117.833 8,117,833 (8,ll7.833) lh•.wd - DI51Ufl111ad b St•• aid ~uations 2110,000 299,000 (2109.000) 448.000 448,CIJO (4'8,000) ~·Dwv:-tedba~Ooslgnotod ""- )'NJy~ 4,218,&&2 615,.70<1 - 4 ,834 548 (4,1n4.5411) Budgetary bas1s u.:t eqt.uty 11,384, 513 815,71l4 U8,47D :m3,.313 630.078 411.058 268.138 13.801.279 13,4\02,043 27.293,322

41,446 ReseNt tot enc~ -.558 908,()().1 (008,000)

Tofol eq.~tylnet poo~tlon 11.4~.959 015.7111 811.479 1.2:i8.871 G30,07G 411.MB 2G8,13G ·14,709,283 12,5&4.039 "0.293,322

TatN: liabillies, UK~ eqully and QChercn:dt$ $ 13.3153, 155 833,31) 711,028 1.~.541 &49,842 426,87-t 258, 131!1 1$8.806 $ 1 1J,441,~2 $32.-.221! s !50.911,078

Seo_A...... _

49 50 Blackhawk Technical College District

Sc hedule to Reconcile the Non-GAAP Bu dgetary Basis Financial Statements to the Stat.em8lnt of R•v•nues, Expens•s. and Chang•s in N•t Position Year Ended June 30 2013

Statement ot Fl.,..,...., Expenses General S!!!!;ioiRewnueFund cap;tal 001>1 EntetJ><1se Jmemal Reccnciling an1.288 15,800 16,174,186 (8,410,105) 7,764,081 TUlbon and fees. Stalutary program ~ 7 ,155,961 7,155,981 (3,228,795) 3,927,186 MatonalleeS 471.868 20.364 492,232 (221 .~) 270,307 Other 5ludenllees: 388,066 1,073 389, 139 (175.-) 213.630 Ml$c:~neous - tnStitl.lbonal ~e 1,081,338 99..... 3 129,140 5,<70 1,999 155,266 198,800 1,651,454 (198,800) 1,452,654

TocaJ rewnues 27.182,068 2,335.928 16,434.~ 36,627 4,534,999 155,266 198,800 50,878,246 (12,235.134) 38,643,112

&OOrlt1TtlR$ Curren< tnstnJCtiOn 17.328,775 1,723,693 1,351,863 20,404,331 (1, 133,897) 19,270,434 ln$lruc;tiora ~- 1.1194.283 84.223 2. 177 283 4.155.789 (1,456,347) 2,699,442 Stllllentseni= 2.262.048 686,160 16,363,280 19,313 4ll8 (1~.26-1,906) 1,048,562 General•nslrtuttorl$11 4 ,545,854 95,812 8,705 1,650.171 645.349 5.295.520 Phy&OQI plan! 1,919,064 1, 184,432 4,642,629 7,746,125 (5,72A,462) 2,021,663 Student aid 3,228,!>72 3,228,572 Auxlli&aty ~~ 180,269 193,096 353.385 (192.096) 161,289 C'Jet:ltedauon 1,391.807 1,391,807 Loss oo d1sposidon ot lxed assets 45,851 45,851 Debt sen.ee lnl~t and Heal chafges 699.147 699,147

TotAl Alrpanditum& ?7,050,0?4 ? ,40A,078 1845A,asr;, 4 ,7?.?,?8:1 4.642.6~ 180.289 193.0!16 56.623.2811 (17.780.9132) 38.862.307

Exeeu (defie•eney) of ~• Otlef' ~penc:M...,... (767,958) (160,1481 (24,334) (4,685,658) (107,630) (5.023) 5,704 (5. 745,043) 5.525,648 (219.195)

Qlblc IE:!I!l!i&l!lQ ISBGII !!all) Operating translers Q u.nafo ~~from long-term deOI 4,100.000 4,100,000 (4.100 ,000)~~

~~Toca.1 other finsncang sources (usee) (80,982) 10.000 4,075,000 25,000 70,982 4 ,100.000 (4,100,000)~~

~~ExceS-s (defi.c:ienc;y) of ~S- and othef financ.-.g •~ """ expenditt.reS and other lmnclng "'"" (848,938) (160,148) (14,334) (610.~) (82,630) 65.009 5.704 (1.645.043) 1.425.848 (21S.19S)~~

~~FuM ba!inCM' Beg;Mng of year 12,233,451 ns.s52 112,813 1,003,969 712,706 345,099 262,432 15,446,322 12,066,195 27,512.517~~

~~End of)'ear s 11,384,513 s 615.704 s 98,479 393,313 s 630,076 411,058 s 268,136 s 13,801,279 s 13,492.043 27,293,322~~

~~Sw lndc.,.._,. Auatot's Ropon.~~

~~51 52~~

~~[THIS PAGE IS INTENTIONALLY BLANK] Blackhawk Technical College District~~

~~Schedule to Re conc;lle the Non- GAPP B udget;uyComblned B2JanGO Sheet - All Fund Typos lo lho Slalomonl of Not Poslllon ..U.30, 2012~~

~~G«:11 R.,._ Fund Cto>~~

~~Toc.:af 0-SSelS 3ncl CIC.het dee:Nts $ 14.436,521 $ 991,7M $ 059.~ 1,402,500 740, 151 4 18,3e8 282,432 088,448 $ 18,800,443 s 3 1,534,7 17 $ 51,135, 180~~

~~U~alliES EClUliX Atll QIHEB CBEQIIS~~

L!llb!IIl.tU Ac:cOt...n;s payable s 4110,743 $ 6,899 11,748 166,892 s Z11 423 $ ~.716 6715,716 Accl\.led liltlillbeS 1,547,711 207,007 3,365 1,739 1,79:1,8$2 1,759,8.52 ACCI'UOd k't'ett'Sl 1115.764 1&5,784 Due to ot11et fuM! 531.309 n ,JIO 803,828 (803,628) Uneamedt'e1oet~UeS \: 137,&41 137,841 137,&41 StUO«

Tolal h•~teS 2,176,295 21~,!:rl6 546,A2l 18&,892 27,445 7<,29 ooa. .wa 3.~.507 1S1,727. 135 Z3,622,G43 funq t9U!!Y IOd osntr '"911 !rNnlmenrs In capttl!ll •nets 13~773,463 13, 773,483 R~ali'M!de-amii'IQ$ 34S,ow 34S,DW 1~.734, 180 13..07S.,21V Fund~ . Reset\ed tot debt .sef'\~Ce 712.706 712.706 ( 165.764) 546,942 Resened for eap.tltl ptOJeds 1.1103,968 1,000,969 (1.003,969) Resened fiOr seiNMUt'llneO 282,432 :>e2,432 (202,432) Resened tor s.I'I..Ktent 11'8"1Ci al auisuance 112,813 112,813 112.813 Resen.ed tot prepaid 1tems 245,200 245,200 ;245,200) ~- De5ognaleo t>r opotaUOnS 7.405.682 7,405,682 (1.405,682) ~ • Oesigna1ed br Stao aid tuetr.Jations 322.760 322.760 ; 322,760) Vrwe$etVeO • Oes;gn;ted br sutsequent yean. 484,140 484.140 ;464.140) v~ ~ Oe5~ted br 5utHQI.IefU y~r 3.775.6~9 775.1152 4,551.521 (4.551.521)

~~Budgelrt basis bxl "'!"ily 1~233,4.51 775,~ 112,1113 1,0G3,DSI 712,7'01S 3&5,090 ~.432 tS,A48,322 1:2,M8, 19S 27,512,517~~

~~ReseMt b encurninnces 211,775 23Ul3D 25$,&1• (158,81&)~~

~~Tal•l eqtaty/ net pos11:1on 12.~. 228 775,M2 112,8 13 1,235,M8 112.706 345,099 262.432 15.704,936 11..007,581 27.512.511~~

~~Tctalliai>Uie$, fin! equity and OliW Cre~~

~~54 55 Blackhawk Technical College District~~

~~Sc:hadule to Reconcile the Non-GAAP Budgetary Basis Financial Statcmenb to the Sbtement of Revenues, Expenses, and C~es In Net Position Year Ended ..b-e 30. 2012~~

~~Statemett ol ~7.Ex~M't Go-- s~ Rllo.w1ue Fund Captal Debt Ent"'l'ft$0 ..,...,., ~ ~nd~sln Fund aoo...... PtQJeets Fl.r.d St~~VCeF\M'Id Fund SeNceFund Total Horns Net Posdan~~

LOC~I go..emme:N - ta..c feo.ly s 15,310,852 8<5,444 --- s 4 ,1.-18,785 s $20,105.081 s 20,105,081 lnt~meot...- ~nue: -Stole ads 3.463.383 654.915 1.016.536 79.249 5,214,083 5.214.083 F ederaf am 211,554 ...... 15,708..202 2,033 1.328 16.640.109 (8.504.564) 8.135.545 TurttOO .-'ld liees. S!""""'Y_..,f<= 7.804.405 7,804,405 (2.945.051) 4,158,444 MatMalfMS 509.850 1.418 511,268 (1118.150) 113.1051 Otner stUdent tMs 384,004 2.4,!i104 408,968 (158.527) !50.441 M1SC~ • IMtdubor.l ~ 855,1574 150,880 188,025 7,a38 3.426 282,914 198.800 1,787.655 (198.800) 1.588.855

~~TOCal~ 28,256.782 2 ,377.653 16.Sn2.76J 89,118 4,152,191 284,242 198,800 52,271.549 (12.008,011) 40,:!65,538~~

~~~c..,.,._ lnollll~~

~~T01a1 ex.penditt.W'H 27,533,1131 2,588,202 18,93Q,027 3, 159,173 4.730.346 266,766 207.340 55,422,785 (15.767,497) 39.f55.288~~

~~Excess ( (/UY,H/~) Operat.-.g translets out (684,875) (25,000) (709.875) 709.875 PIQCeed$ tvm klng-tenn debe 3.300.000 3,300,000 (3,300,000)~~

~~Tatal ott-financmg sources (u!Ses) (&84,875) 3,275,000 651,675 511,000 3,300,000 (3,300,000)~~

Exc:es.s (deficiency) oll'e\enues and other ll\3ndng sourees OYM expencituf'Q and other ftnwlcing uses 37.97& (208.549) (ZC,ZCO) 200,945 73,720 75,470 (8.540) 148,7&4 4tS1.480 110,250 f und be!aleM.' Seg.nn.ng of yeat 12,196,475 98.4,401 139.on 799.024 638.886 269.823 270.972 15.297.558 11.804.709 2U02,267

~~End Olyur s 12,2JJ,451 n s.852 s 112,151J 1,oo:J.VGJ 712,700 $ 305,099 262,432 $ 15,44C,322 $ 12,06C,195 27,512,517~~

~~s.., lrlloper-.t Auddon Repod~~

~~56 57 "WIPFLi_~~

Independent Auditor's 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

~~Other Reports Distnct Board BlaCkhawk Teehntcal College District Janesville, Wisconsin~~

We have audited, in accordance with auditing standards generally aocepted in the United States and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States, the financial statements of BlaCkhawk TeChnical College District (the ' College"), as of and for the year ended June 30, 2013, and the related notes to the financial statements, whiCh collectively comprise the College's baste financial statements, and have issued our report thereon dated , 2013.

~~Internal Control Over Fi nancial Reporting~~

In planning and performing our audit of the financial statements, we considered the College's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the punPQSe of expressing oor opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the College's internal control. Accordingly, we do not express an opinion on the effectiveness of the College's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, 1n the normal course of performmg their assigned funcbons, to prevent or detect and correct misstatements on a bmely basis. A material weakness is a defiCiency, or combination of defiCiencies, 1n internal control, such that there IS a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented or detected and corrected on a bmely basis. A significant deficiency IS a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness. yet important enough to merit the attention of those charged with governance.

Our consideration of 1ntemal control over financial reporting was for the limited purpose descnbed 1n the first paragraph of thts section and was not designed to ldenllfy all deficiencies 1n Internal control that m1gllt be material weaknesses or si9nificant defie~enc1es. G1ven these limrtatJOns, durrng our audit, we drd not rdenhfy any deficrencres in rntemal control that we consrder to be material weaknesses. However, matenal weaknesses may exrst that have not been idenMied.

~~58 -w-IPFLi.. Compliance and Other Matte~~~

As part of obtaining reasonable assurance about whether the District's financial statements are Independent Auditor's Report on Compliance For Each free from material m1sstalement, we performed tests of its compliance with certain provisions of Major Program and on Internal Control Over Compliance laws, regulations, contraciS, and grant agreements, noncompliance w•th which could have a dJrect and material effect on the determination of financial statement amounts. However, Required by OMB Circular A-133 providing an opinion on compliance with those provisions was not an objective of our audij and, accUitllllyly, we tlu nut exp.ess such an upimun. T11e results uf uur test d1sclusetJ nu IIISI

Management is responsible for compliance with the requirements of laws, regulations, =--=-:--:-:-::--' 2013 Eau Claire, Wisconsin contracts, and grants applicable to each of its major federal and state programs. Auditor's Responsibility

~~Our responsibility 1s to express an op1nion on compliance for each of the College's maJor federal and state programs based on our audit of the types of compliance requirements referred to above.~~

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A-133, Audits of Stales. Local Governments, and Non-Profit Organizations; and the State of Wisconsin Single Audit Guidelines, issued by the Wisconsin Department of Administration. Those standards and OMB Circular A-133 require that we plan and perform the aud~ to obtain reasonable assurance about whether noncompliance with the types of compliance reqUirements referred to above that could have a direct and matenal effect on a maJor federal or state program occurred. An aud1t includes examining, on a test basis, evidence about the College's compliance with those reQuirements and performing such other procedures as we considered necessary in the circumstances.

59 60 We believe that our audit provides a reasonable basis for our opinion on compliance for each The purpose of this report on internal control over compliance is solely to describe the scope of major federal and state program. However, our audit does not provide a legal determination of our testing of internal control and the results of that testing based on the reqUirements of OMB the College's compliance with those requirements. Circular A-133 and the State of Wisconsin Single Audit Guidelines. Accordingly, this report is no! suitable for any other purpose. Opinion on Each Major Federal and State Program

In our opinion, the Blackhawk Technical College District complied, in all material respects, with the requirements referred to above that could have a direct and naterial effect on its major WipfliLLP federal and state programs for the year ended June 30, 2013.

Report on Internal Control Over Compliance . 2013 "'E"'a,-u'C"Ia-,i"'re=-,•w"'isconsin Management of the College is responsible for establishing and matntaining effective internal control over compliance (internal control) with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the College's internal control with the types requirements that could have a direct and material effect on a major federal or state program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal and state program and to test and report on mternal control tn accordanoe wrth OMB Circular A- 133. Audits of Stale, Local Governments and Non-Profit Organir.ltions. and the Stale of Wisconsin Single Audit Guidelines, but not for the purpose of ex~ressing an opinion on the effectiveness of tnlemal control over compliance. Accordingly, we do not express an opimon on the effectiveness of the College's internal control.

A defiaency in internal control exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions. to prevent or detect and correct. noncompliance with a type of compliance requirement of a federal or state program on a timely basis. A material weakness in internal control is a deficiency, or combination of deficiencies, in 1ntemal control, such that there is a reasonable possibility that material noncompliance wi1h a type of compliance requirement of a federal or stale program will not be prevented or detected and oorrected on a timely basis. A SIQnificant deficiency is a defiCiency 1n internal control, or a combination of deficiencies, in internal control with a type of compliance requirement of a federal or state program that is less severe than a material weakness in internal control, yet important enough to merit the attention of those charged with governance.

Our consideration of the internal control was for the limrted purpose described 1n the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

~~61 62 Blackhawk Technical College District~~

~~Sclledule of Expenditures of Federal Awards Year Ended June 30, 2013~~

~~CFDI>I Grant Grant Revenuo Agoncy/Program'Grant Title Numi>Gr ~ Fodor al ~ Expendlturo&~~

U.S. DEPMTMENT OF COMMERCE Economic Devolopmont .old ministration Passed through tho University of WI-Whitewater Economic Adjustment Assistance 11.307 EOA- State or Ingenuity 144-5-25 1~PRJ42RF 051 s 42,100 s 19,515 _s __• s 19.515

U.S. OEPMTMENT OF LASOR Passed tllrough tho Southwest Workforce Development Board Workforce Investment Act Cluster W IA Adult Program 17.258 . " 082 10.425 6334 ____6_ ,3.14 W IA Youth Program ~'\ 17.259 --- ~,,. WIA Youth Program 082 695 422 422 .~~ . Performance Incentive 082 5,185 3155 --- 3 155 3577 --- 3.577 Passed tfhru Southwest Workforce Development Board WIA Ols\Qcolted Work<:~r Formula Grants 17.278 082 69:; 422 422 Total Workforce Investment Act Cluster ____.1,Q.333 --- 10.333

~~Employment and Training Pdminlstratlon W IA Pilots, Demonstrations, and Research Projects 17.261 CATE II 053 1,000,000 27.919 27.919~~

~~Blackhawk Technical College District~~

~~Sclledule of Expenditures of Federal Awards (Continued) Y ear Ended June 30, 2013~~

~~CFDI>I Grant Grant Rovonuo~~

~~AgencyiProgrnmfGrnnt Tille Numi>Gr Amount Federal ~ Expenditures~~

U.S. DEPARTMENT OF LASOR (continued) Passed ttlrough 1M Doparment of Workforce Development AARA- Competitive Grants for Worker Training and Placement In High Growth and Emerging Industry Sectors 17 275 Sector Plli81'1ce for the Green Economy 081 s 17,725 s 17664 ~ $ 17664

Passod ttlrough Northeast Wisconsin Technical Colle go Trade Adjus;ment Assistance COmmunity Colege and Career Trolnlng Grants 17282 Maklng the FtJture: The Wisconsin Strategy 083 584.831 2 1,223 21,223

~~Total U.S. Deportment of Labor 77,139 --- 77.139~~

~~U.S. DEPPIRTMENT OF TRANSPORTATION Pasoedttlrough tho Wloconsln Technical Collage System Board lnt..-egency Hazardous Materials Pubic Sactor Trainong ord Planning Grants 20.703 nla 4.641 4,641~~

~~U.S. DEPARTMENT OF VETERANS AFFAIRS VA Educational Reporting Fee 64.027 nla ---'1"'1'-'1"'9 --- 1,119~~

~~64 Blackhawk Technical College District~~

~~Sclledule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2013~~

~~CFDN Grunt Grant Revenue Agoncy/ProgramiGrant Tltlo Number Amount FedoraI Match Expondlturoa~~

U.S. DEPARTMENT OF EDUCATION Direct Programs Student Financial Ass is lance Cluster Federal Supplemental Educational Opportunity Grants 84.007 SEOG2012-13 E-P007A114485 nla $ 75,300 s $ 75,300 Administrative Fee 17,978 17,978 Federal Work Study Program 84 033 FWS2012-13 E·P033A12448S nla 86.383 86,383 Federal PeU Grant Program 84.063 Pell 2012- 13 E-P063P122672 nla 6.779,501 6.779.501 Federal Direct Student Loan Program 84.268 Olreoct LOM Program E-P268K132672 n/a 8,402,523 8,402,523 Parenrs PLUS Loan E-P268K122672 n/a _L2lg ---- 7,582 Total S tudent Financial Assistance Cluster '15,369,267 --- 15,369,287

~~Blackhawk Technical College District~~

~~Sclledule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2013~~

~~CFDN Grant Grant Revonue Agency/ProgramiGrant Title Number Amount Federal ~ Expenditures~~

U.S. DEPARTMENT OF EDUCATION (continued) Passed ttlrough tha Wisconsin Technical College System Board Adult Educa;lon-.Baslc Grant to Stales 84.002 k'ltegrated English & Civics Educatoon 05-445-146-163 41 ,364 $ 41,364 $ $ 41,364 AduH Basic Education 05-646-146-123 197,978 196,363 284.663 4 81,026 ABE RocK County Pnsoners Project 05-825-146-11 3 52.222 50,380 16,793 67173 Total 84,002 268,107 301.458 589,563 Career and Technic'll Education- Basic Grants to States 84.048 Career Prep 05-073-1 S0-213 35,050 35,050 35.050 Program lmprovemenl Research 05-423-15()..253 81,190 30,009 30,009 Student Support Sel'llices - Non TradoUonal 05-424-151)..263 20,298 19,630 19,630 Student Support SeNices/Guldance & Counseling 05-47 1-151J..233 329,709 329,709 ~ 587109 Total 84.048 414,398 257,400 671 798 - .:''\·~ Total U.S Department of Education t6,071,772 558,858 16,630,628

~~TOTAL E)(PENDITURES OF FEDERAL AWAADS S t6.174.188 S558,858 $ 16.733.042~~

~~66 Blackhawk Technical College District~~

~~Sclledule of Expenditures of State Awards Year Ended June 30, 2013~~

~~State Catalog/ Grant Revenue State Agency/Prograrn'Titl& Grant Nurrber Amount State Match Expenditures~~

~~IMsconsi n Department of Revenue Exempt Computer Aid 835.109 nla $ 79,269 _$__ • $ 79.269~~

\Maconain Higher Educallon Aida Board Wisconsin Higher Education Grants 235.102 nla 872,450 - 872,450 Remission of Fees for Veterans and Dependents 235.105 nla 85,984 - 85,984 IVinority Retenhon Grant 235.107 nta 9,505 9,505 Wisconsin Covenant Scholars Grant 235.108 n/a 7,875 7,875 Handicapped Student Grant 235.112 n/a 1,800 - 1,800 Talent Incentive Program 235.114 nla 46,000 46,000 HEAB Nu rson~ St00er11 Loan Fund 235.117 nla 11,500 - 11,500 Wisconsin Covenant Foundation Grant 235.131 n/a 5000 --- 5000 Total lllllscon sln Higher Education AJds Board ~r 1,040,114 - -- 1.040.114

~~'M~consln Technical College System Board hstructor Occupational Compentency 292.104 Occupational Compet&ncy Grant 05-639 s 2,042 1,829 ~ 3.658~~

~~General State Aid 21!2.10~ nla 2,01~,17 '1 2,61~.171 General State Aid Prior Year Adjustment 292.105 nla 38,200 --- 38200 Total 292.105 2.653.371 - -- 2.653.371~~

~~Blackhawk Technical College District~~

~~Schedule of Expenditures of State Awards (Continued) Year Ended June 30, 2013~~

~~State Catalogf Grant Revenue~~

~~State ~enc~Pro!!ramfTitle Grant Number Amount State Match Expenditures~~

~~Wi sconsin Technical College System Board (Continued) Displaced Homemaker Grant Program 292.106 05-641-106-113 46,798 41,613 ~ 46,237~~

Mnority Student Participation and Retentio n 292.109 Mnority Student TransHional Program 05-992-109-113 23,954 22.898 ~ 30.530 Farm Training 292.111 - nla 352 352 Incentive Grants 292.112 Advanced Manufacturing 05-020-112-113 68,500 46,967 46,967 Pharmacy Tech 05-069-112-133 88,491 83,975 83,975 Improving Student Success 05-077-112-163 45,000 45,000 15,000 60,000 Emergency M:ldical Technician 05-079-112-143 4,200 4,200 4,200 Basic Skills OeveiopmenVTranslllon .:\' 05-935-112-123 97,205 97,207 61,698 158,905 Total292.112 o'\."' 277,349 76.698 354,047

~~T ransition Services to Individuals with Disebilities 292.115 GPR HaMica,pped Transnton 05-939-115-113 $ 23,637 s 23,293 5 7,754 $ 31,057~~

Workforce Training Grant Program 292.116 Angi 05·072-116-113 25,077 1,7 16 1,716 Advanced lv'Bnufacturing 05-076-116-113 102,456 5,042 5,042 SSI Technologies 05-080-116-113 112,557 84,065 --- 84 065 Total 292. 116 90.823 90.823

~~68 Blackhawk Technical College District~~

~~Schedule of Expenditures of State Awards (Continued) Year End eod June 30, 2013~~

~~State Catalog/ Grant Revenue~~

~~State ~onc;tiProaramfTitlo Grant Number Amount State ~ ~a n dit ura&~~

\Nhconsin Technical College System Board (Continued) Faculty Devobpment Grants 292.123 Technology Innovation Center 0!;-406-123-112 44,500 44,162 44,162 Technology Innovation Center Match 05-407"· 12:1-11 2 nla 44 162 44 162 Tota1292.123 44,162 44,162 88,324

~~Fre Fighter Tra ining 2% 292.137 nla 20,860 20,R60 ' --- General Purpose Revenue lncreaseod Program Capacity 292.161 l icensed Practical Nursing 0!;-068-161-113 152,173 133,598 ~ 222,662~~

Total Wisconsin Technical College System Board 3,310,148 3,541,921 •~y 231,773 Wisconsin Department of Transportation Wotorcycle Safety \."" 20.395 (4) (aq) M>torcycle Safety Program ~ 0094-13-05 6,360 $ 355 $ 12,346 $ 12,701 M>torcycle Sa fely Program 0094-12-08 8,717 1 242 10,968 12210 1.597 23,314 24.911

~~Wisconsin Department of Natural Resources State Aid in L~u or Property Taxes 370.503 nla 105 --- 105~~

~~Blackhawk Technical College District~~

~~Schedule of Expenditures of State Awards (Continued) Year Ended June 30, 2013~~

~~State Catalog/ Grant Revenue~~

~~Stata Agency/Program/Till& Grant Nurrber Amount State ~ Expenditures~~

Wiscons in Department of Corrections Passed throt..gh the Rock County Sheriffs Department 410.111 Rock County Basic Skills 12/13 932 $ 74,879 69,666 69,666 R ock County Basic Skills 1:1114 9:12 05,476 471 471 Total 410.111 70.137 --- 70,137

~~Wisconsin Department of Workforce Development Youth Apprenticeship 445.107 Youth Apprenticeship Program 066 62,100 50,777 39,416 00,193~~

~~Wisconsin Department of Justice Law Enforcement Training Fund-Local Ass~~

~~TOT AI.. EXPENDITURES OF STATE AWAADS $4,564,877 $ 294,503 $ 4,359,380~~

~~See accompanying notes to tho Schedules of Expenditures of Federal and State Awards.~~

~~70 Blackhawk Technical College District Blackhawk Technical College District~~

~~Notes to the Sc hedules of Expenditures o f Federal and State Awards Notes to the Schedules of Expenditures of Federal and State Awards (Continued) Year Ended June 30, 2013 Year Ended June 30, 2013~~

~~Note 1 Summary of Significant Accounting Policies Note 3 Pass Through Funds to Subrecipients~~

The Blackhawk Technical College District Board oversees lhe operation of Blackhawk Dunng the fiscal year ended June 30, 2013, there were no funds passed through to a T echmcal College Distnct (the · College') under the provisions of Chapter J6 of the subrecipoent. Wisconsin Statutes. The College includes the majority of Rock COunty and Green County. All significant operations of lhe College are inCluded in the scope of the OffiCe Note 4 Reconciliation of Revenues to the Basic Financial Statements of Management and Budget Circular No. A-133 (Single Audit), Audits of States, Local Govemmenrs, and Non-Profit Organizations and State of Wisconsin Single Audit The followmg 1s a reconciliation of federal awards per the Schedule of Expenditures of Guidelmes. Although lhe Department of Health Servces has been designated as the Federal Awards, to the federal revenues per the College's basic financial statements. College's cognizant agency for the Single Audil certain responsibilities related to the single audit have been delegated by this depaf1ment to the W1sconsin Techmcal Revenues per Schedule of Expenditures of Federal Awards $ 16,174,186 College System. Fonancial aod not recogrnzed as revenue (8,410, 105) 1. Programs Subject to Single Audit All signifocant federal and state awards received by the College (either directly Revenues per basic financial statements $ 7,764,081 from the federal government or the State of Wisconsin or passed through the State of Wisconsin) have been inCluded on the Schedule of Expenditures of The following is a reconciliation of state awards per the Schedule of Expenditures of Fede-ral and State Awards. State Awards to the stale revenues per the College's basic financial statements. 2. Basis of Presentation The accompanying Schedules of Expenditures of Federal and State Awards are Revenues per Schedule of Expendotures of State Awards $ 4,564,877 prepared on the aocrual basiS of aocounting. Rock County Basoc Slalls (70,1371

~~Note 2 Federal Direct Student Loans (FDL) State revenue per basiC f1nanc18l statements s 4,494,740~~

The FDL (Federal CFDA Number 84.268) is comprised of the following loan State revenues per basic financial statements: types: Non-operating revenue $ 2,839,940 S ubsidized Stafford loans $ 5,189,258 Operating revenue 1654 800 Unslbsidized Stafford loans 3,213,265 Parent's PLUS loan 7 582 Total $ 4,494 740 Total FDL $ 8 4 10105

~~71 72 Blackhawk Technical College District Blackhawk Technical College District~~

~~Schedule of Findings and Questioned Costs Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2013 Year Ended June 30, 2013~~

~~Section I · Summary of Aud~o(s Results Section I · Summary of Jlold~or's Results (Continued)~~

~~Ftnanaal Statements Federal Al4erdS (Continued)~~

~~Type ct aud~Of's report IssuEd: Unmodified ldenbficallon of map- federal proQrams:~~

Internal control over flll3ncial reporting CFOANumber in accordanca with GAGAS: Material weakness(es) identified? No Student Financial Assistance CJuster: Sigrifocant deliciency(ies) identified 84.007 Federal Supplemental Educati

~~Typo 01 au~~

~~Any aud~ findings disclosed that are requited to t>e reponed in a=r~~

~~73 74 Blackhawk Technical College District Blackhawk Technical College District~~

~~Schedule of Findings and Questioned Costs (Continued) Schedule of Findings and Questioned Costs (Continued) Year Ended June 30,2013 Year Ended June 30, 2013~~

~~Section I • Summary of Aud~o(s Results (Continued) Section IV- Prior Year Findings and Questioned Costs~~

State Ftnancial Assistance Federal and State Financial Assistance Findings and Questioned Costs Internal control over mapr programs.: Material weakness(es) ldeotifled? No 2012.()1 Allowable Costs - Compensation for Personal Services

Sig,.ficant aefioency(oes) odenbliea Program Affected - Coreer and Teohn!COI Education - Basic Grants to States not considered to be material (CFDA No. 84.048) from the Department of Education. weaknesses? None reported

Type of audn«s report issued on Condttion Noted - Dunng procedures performed, we noted salaries and benefrts charged to the Career and Technical Education program which were not properly comp&an~ for major programs: Unmodified supported by semiannual certrtications, monthly personnel activity reports. or Any audn findings disclosed Ihat are equivalent documentation. requ~ed to be reported in aa:ordance wnh the State ofWisconsin Single Current Year Condition - We reviewed the wages and benefits charged to the Audit Guidelines? No Career and Teellnical Education Program. noting they were property supported for 2012·2013. ldentifocation of major state programs: CFOA Number Name ot State Program or Cluster

~~235.102 WlSCOOSal Higher Education A.cl Grants 235.107 Mononty Retention Grant 235.114 Talent Incentive Program 235.117 Nurslog Student Loan Fund 292.105 Stale Aid for Technical Colleges~~

~~Section II · Financial Statement Findings~~

~~There were no fond•ngs n:qulred to be reponed In accordance wnh Generally Accepted Government Auditing Standards.~~

~~Section Ill ·Federal and Stat~ Financial Assistance Findings and Questioned Costs~~

~~None reported.~~

~~75 76 Blackhawk Technical College District~~

~~Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2013~~

~~Section V - Other Issues~~

~~Does the audllof"s report or the not~ to the financial statements include disclosure woth regard to slbstantial doubt as to the aucfrtee's ability to contrlue as a goong concern? No~~

DOC3 the audot report a how audrt 138003 (o e., matenal noncompliance. nonmatenal noncompliance, questiOned costs, matenal weakness , reportable condrtiOI'I, management loner comment, excess revenue or excess rese

~~Was a Management Lener or other document convey.ng audit comments ISSued as a result of tho& audot? Yes~~

~~Name and Sognature d PMner~~

~~Date of Repon~~

~~77 Blackhawk Technical College District~~

~~Financial Trends - Net Position by Component Last Ten Fiscal Years~~

2012 ,.,, ,.,. ,..,. 2008 ,.,., ,... 2005 '"" Nel.,.!.menlln - __c_.elhltlll .,.. s , .. m ... oe s t:vn.413 s t2.M.et7 s ,,,m2u 9,784 782 81;1),171 7.139.20) UOU12 $ &.304.030 8331,000 Oobi 477,784 s.6.142 •58."1 726,&81 ...... &27,815 682.&.24 387,812 ,,.. ,eg, $2.4,149 St--.l~ltl ...... ,. $8,47& I 12..813 \39,071 15C,5M 110.21\ 176,564 184.0U t82,466 173,938 170.737

~~Un-.lrici..S 12.088,&13 1M7D.2N 13,!08,3«2 1!~12.'"' 11,A:2Ao.tn Q~'H.AM A4A7.~ 7,864,8"1 7,582,30! 8.772.M'~~

~~TOll Nil PoetiiOft s 27293.322 s :v.sn.st7 s :MIM)22e1 s 25966.1$3 s 722!11!1188 s '"62!.350 s te.3!3,0S, s t5~' ·'~ s •••$4* s '"OO!.w~~

~~Blackhawk Technical College District~~

Financial Trends- Changes in Net Position Last Ten Fiscal Years ,.,, ,..,, ,.,, ., ,.., .. ""' o,.~~~•~ .....,..rw~• - - - - l..-)CWIMd .... MCfl~.,.,..~allcJwarcll S .., 411 123 ' 5,221i!IM s 6,.45e,:zt:s $ 6.&&5 'TOG s etu.mi ' 4,504,013 $ 4 t78,tSI S ~tl'll,M '3..7al:f51 I l,79U7J a •• .,. 1,0541100 1,110 700 1,411111& ,..,. ... tS».dZ 12115,21>1 ,,..,.. 1.,4041,1113 U68,420 ,...... ,.,.. 7,~011 6.1all!ot! ~...... 7,12!1 )IS ...,,. 361U6t 3.»0,055 Ull.M'·""'·"'' ueu:sa 3l)0)2) ...... 61MM7 10:'411 ,.,. .. , 611.2e0 4n,SII ...... 611.:N4 t,1GI,8 t»,41T ""'""'- 2Gtt• 2-4:'241 ,., ... 217..t17 21).Q ...... , .. 18Ut0 ,... ,., ..,,., &l,,lte 411 Ol$ ,._,. 2e;J4Z) l'lt,ns 200 t A'r Nl~ ·btiii.(CI'YII- ..,.,.."'"" ...... , ,,., lOU!-- PfOO... m ,...,..I'IWI 1~1!6508 1G.M203. tft3177' ti.I".AI.I02 1:1101.10'1 10318580 t .t3J.Xla t.M48C ltU01.112: t.MII.7'01 O,.NI~ C>pt"tH ...... 20.13tl2f 1l,tu!14 20,.UtNO ti,Xlld$ 17.6.».831 111!12112.,.2)1 t6,t3r,72t IS.MIQ,52() 1,,:1&7,7:1& 14,.W,31T .. _...... _ 2.-Soltc 2.N41Z'7 t.eoo.&n 2.S30.:s"KI z. ..eo..JM t,.N8.397 l.•,t..nt t,714M 2.249,173 t,4n.319 SLAW~~ Serw;:w 4,04581 4,03Un 4.t~6Cie Ult 713 )If$,.~ 3.011At 1Ml.l&e 2.N1,102 1.71<1,411 2&MM2 ...,.~NLIUI__, •.ni~~M a.• ttate ' ·'-• 411316&4 •&M.-2011 J.tl~.oea •oot.02t S.totJ,m l.llt.eeo s.ntllt ... _ 20218$3 2.t"CCI02 l,»:l,MI 1.207.M3 2.070.oet t .tm..lee 2.0Ql.007 :t.ls.l,70l 1.f'tt,172 Ut1,2&2 ...... 3 22un J.~ &t3 ••,.,.•Z2 1.112.60' '•tO. tea uos.•n Hl'0..57t ~.~7.187 t.l64 ets t,eeuSQ 111 2• 2o'7 111 32011 e.oo 331 trt H1..531 210..631 211.m ,.,,,428 m 122 1rw s,& .,.._ 139!!07 tm~p qtl54n tmon t2t71M 1107014 ttiUiN !H:M4 f0!650 ll?lf!M

To~l--- ~nltJitg .,,.,_... l8.U130e l&'T't4 &16 41.0tf5e113 3=3810.~ 30)10,5Qr2 30 •~S.l'H 21~-- !t.412361 M.4 t0Goe "'"'""" Opeflotl"t to. m.'W)I01! ll11:1H)l rll0!?1Pl C?l:a.JOOC!) 9'0)ot4C)Ot !IIM10t11 <20 ...108H pt$10111&1 !ttlt064ftl (1U2Jt01l

fton..optrllln9 A.wnuts(l!'x!Mfl•lt) P~l~.. 20s:aou.c 20.t~OS' )0.(100..,. 20..16t ••• tot».rn ua.n.. ••• 18dt.0&3 H.eol ..,tol ll.061&5t tt.tsUST ll••GPM~It'Q~IICII'\t , ... 140 s,...,sa <~f3tJll' ...mau cs•ao 37400'11 lC40 ut,,x. l,fQMl J..IOINO ...... auo "''• ' _.or2 ueMs t1'0.TtO *.ta &14t7• •u.0)4 m"'I aJ100 l.oMi!f'l NPQNI f/1.111'1*'7 111111 ~ C45-l$1f !IC"IMI Qo0501 (tte.tlllll) (T,lM, {tl2.02tt (17,1WI t2WI.4CO) Qtl 141) [11o.l4) ...... ~ f&Wt4D !T'fl014l !18!056:21 flm'!!l p.t4n f6S100) f!I1.!\W (l.O'IIQ !IJMU83J 11.1~5:481

~~Total Mr.-ot~tqiJrtl tt~•r....· ..~~ .. 779:!1toe n'r.lltp ~Q2"11t8 ,.....,.103: -"''-)4 p! :n&OM01 211111)31'11 :;?01111910 tfM.B8 'ttl7'44606~~

~~Ch.ru- lf'l ltet PoWOor! s (2Uttl!lt s e102!0 s t38074 s lttc&OS s 1&.2:!..2'311 s 25.Sl.aa s. tMt,n s. fl•.m s. ~112 s ?,:!?leo..~~

~~79 Blackhawk Technical College District~~

~~Revenue Capacity - Equalized Value of Taxable Property (In Thousands) Last Ten Fiscal Years~~

Tu Total Calendar PortOnal lnc;romen1 Total Dllbiel ., ., 1 VIIUIIfc.t Tn Rlttt41 . Retld• nilel Commordtl Mtnutlcturlng 01hor Prof:!~ Dhnrtc~• V11ue •• 2003 $ 8 ,875.162 s 1,694.298 s 339.097 s 678,$23 $ 286.BTO S (199.814) s 9.374.136 $ 8 ,914,744 1.8159T

~~2004 7 .1118.837 1,678,:10$ 3SI,1Q$ 720.252 279.23Cl ('208,4721 U$9.191 9 411,022 1.7608)~~

~~2~ 7 827,823 1,800,418 le1,768 768.644 298.268 (~.658) 10 802.281 10.214,313 1. 72160~~

~~2006 8 .$12.209 1.978,318 371.268 815,718 318,6ZA (312.223) 11.683.914 11 . 003.~ '1.6700T~~

~~2007 9 033.670 2,181,348 413 272 82~.781 31 3.~ («A, I~) 12.333.711 1\,97,147 1.69413~~

~~2001! 9 430,283 2,280.678 4S7,174 8$8.8117 378,4!M (~1580) 12.e70.1X14 12,097.6l6 1. 70~~

~~2009 9 ,3$$,578 2.332.842 428,1f,7 8$4,55(1 :117.729 (589.7531 12,759,109 11.996.811 1. 7292B~~

~~2010 8 856,8611 2.280,$19 428.033 859.021 384,4TI (6204761 12248,430 11.501,17<4 1. 7292B~~

~~201 1 8 .$82,442 2.252,419 425.730 ll8&.(l38 357,674 (540.300) 11,943,.104 11.229,424 1. 7843B~~

~~2012 8 305.7:10 2.244,981 AS2,825 879.130 317,4&1 (494 &701 11,7&5,5&7 11,0o48,411 1.84339~~

~~Source ~ Wlac:onsml)eptttmenl ofRr.ctf'IIA. Bu!l*N ofPIOPif1f T1x~~

Note~ (al 1'he TID'I (Tax lncromM.all ""tnd) amounl does nollnctude tt. "():1uo ot exom.ol comoc.urs (b) Equohzod ..olua lnlotmatlon lot Rock &nd Oteen Counc•• (OI Smalt xwtlons d Rode and Groon Cou'rt141 oro t»l In BTC"s dQtrtct (d) TIX 1'81~ OJW por $1,000 of BTC's eqo81b:Mt \OltHI

~~Blackhawk Technical College District~~

~~Revenue Capacity- Direct and Overlapping Property Tax Rates Last Ten Fiscal Years~~

~~BTC Dlrt;.t R•le Ov•rt•e2!nll R•te~·~ Oth~~

2004 1.37 044 1.81 6.11 5 74 10.00 o.n 24A3 (1 .$0) 22.93 2005 1.36 0 .39 ,~ 597 562 9.92 0.75 (I 3$) 22. 615 24 ~· 2008 1.33 0.39 U2 5 71 538 9.05 0.77 22.84 (I 21) 214J 2007 1 28 0 .39 1&7 537 5 18 8.65 0.83 2 1 ~ (1 .39) 2().21) 2008 1:l0 0.39 169 531 5 18 8.92 I 05 22 15 (1.47) 20.68 2009 1.31 0 .39 1. 70 529 5 16 8.69 116 22.00 (1.58) 20.... 2010 1.34 0.39 U3 562 53$ 9.21 1.29 23:20 (1.$5) 21.65 2011 138 0.3$ 1,73 599 5.76 10.03 1.29 24:30 (I.BO) 23.20 2012 1.41 0 .37 178 627 602 10.19 1.41 25 ~7 (1.63) 24.04 2013 '44 0 .41 1 as 6.47 619 10.39 1.38 26 28 (1.65) 24.63

~~Souret: Wlscollltn ~rlment otRewnua, Ol.,.slon ofStet4 Md Local Finance, Bureau ofLoceiGowmment SoNces~~

Not..t: (a) Owrla.Wing raiM ere thole of local and count)" gowrnments U!.M opply to property OMMJrl W.thln the O.strlcl. Not el owrlapplng rates apply 10 all property O"Nil8fl Wlthan I he O.strict For exam~e. the county ra1e •s m~e up o1 the mleS tor most of Rock ancl Green Counties The indMdual county rates apply on 'y to the property owners ~thin eoc h of !.hose counties. Thole CMtrfappirtg tax ratos are M awtago ot t he mtes.lof'each munlc1pa1ty ma'clng up tho dec:alllf1 tlis cot"'"'n alnc;e each gper~y tax """'•"" a~ IJ..,. """""'the Oeb1 SONice Fund. This rote may not exceed $1.!;0 per• 38 16 orw.. conolo Stole Slolu

~~8 1 Blackhawk Technical College District~~

~~Revenue Capacity - Property Tax Levies and Collections Last Ten Fiscal Years~~

~~Collected w ithin the Fiscal Year of tho Levv Total Collection• to Oatolb) Fiscal Percentage Percentage Year Total Ta. Levy Amount of Levy Amount of levy~~

2004 $ 16,188,684 $ 11,322,368 69.94% $ 16,188,884 t OO.OO% 2005 16,582,115 11,678,647 70.43% 16,582, t15 t OO.OO% 2006 17,585,437 12,473,565 70.93% 17,585,437 100.00% 2007 18,376,682 12,621,809 69.77% 16,376,682 tOO.OO% 2008 19,662,050 13,688,087 69.62% 19,662,050 t OO.OO% 2009 20,625,490 14,098,573 88.36% 20,625,490 t OO.OO% 2010 20,749,303 14,114,630 66.02% 20,749,303 tOO.OO% 2011 19,688,750 13,690,044 68.83% 19,688,750 t OO.OO% 2012 20,037,522 13,963,864 69.69% 20,007,522 t OO.OO% 2013 20,421,757 14,258,688 ~~ 69.82% 14,258,688 69.82%

~~Notes: (a) Under Wisconsin law, personal property ta..es end cer1aln installroont naal estate taxes are eo11ec1ed by crty, "IIage, and town treasunars or cler'~~

~~(b) Fun le>y is typically collected In mld·August. For 2013, $20,421,757 or t OO% was collected by the end of August 2013.~~

~~Blackhawk Technical College District~~

~~Revenue Capacity - Principal Property Taxpayers Current Year and Ten Years Ago~~

~~2012 2002 Percentage Percentage oiTotlll of Total Equalized Equellud Equall• ed Equall•ed TIX 1?;8k:Or Nama Vatua~on Rank ValuaUon Valuation Rank Valua~on~~

Mercy Health S~stem $ 83,055. 743 t 0.75%. ABC Supply 63,385,285 2 0.57%. s 19,271,228 7 0.22% Jenoa~lle Mall 42,220,.038 3 0.38%. 32.952,959 2 O.:la% Kettle Foods 41,108,906 4 0.37'll. Ooon/St. Mary'srRiwr.lew Clinic 41,035,275 5 0.37'll. t9,288,351 6 0.22% GHC Specialty Bra r>ds LLC 38,213.957 6 0.35'll. ~~ 24,467,720 3 0.23% Blain Supply Fann & Fleet 36,402,191 7 0.33'll. 24,065,120 4 0.23% Kerry lngradlents 35,496,<.62 8 0.32%- Slaples Contract & Commercial LLC 33,512. 192 9 0.30'4 Wai-Mall 27,514,123 tO 0.25'll. Generol Motors 52.382.937 t 0.6 1% LeMons 19,387,493 5 0.23% Fntx>-lay . \~~ t8,470,954 8 0.2 1% Swiss Colony t8,439,963 9 0.21% -- ~---!(_ ~ r.tar>d Real Estate ~' 17,374,962 tO 0.20% Total $ 441944.590 4.00'll. s 246,081,687 2.86%

~~Tot at E~uatllM '/aluatuln f!il tn~~ Ol!t~et $ 11,048.410.836 s 8,605,885,415~~

~~Source: Employer contacts. Rock and Green C01.11tles and ml.l'llcipallty ollicial statements. PIO'Aded by R.W. Baird & Co.. Inc.~~

~~83 Blackhawk Technical College District~~

~~Revenue Capacity - Enrollment Statistics - Historical Comparisons Current Year and Ten Years Ago~~

201> 2011 21110 21100 ,.., ,.., Studtnt. S.rvu:f C"' "'" """' """" """' "''-lOCI I~ o.gr_. 4,$.48 3M7 4,0150 3.781 ),nc 2.844 2406 2.412 U8:2 2,5$) ..-Mf'nc_·~· 1,117 1.()n 1,4~ t.•98 1;~11 tiC 17& I,Oll 1.166 1,4l1 _.. oe n 83 g.~ 140 ,,.g t38 t41 ,..., m 'e/(U1S(WIIAdllt :ueo 5,751 e~ t.3U &.4179 !U10 1!1778 t.205 8.57V s.•a2 Ccmm~o~~~ot.,&~l ~ 311 201 13? 8e Mi tiM 328 381 U4 ...lcSiolllla •m .w '* 11w '* .w 2001 ,,,2 ,~ 2~ -.... tt,4t.l tZ.7M 13.998 '"-10! u ..32t 12.531 14,&&1 16.311 11,650 te,..au

~~Full-l~ne Equlv•linl Enrollment !Ill A NOC~~

~~Totlll &~ndll.lrt~Jit J :tOM!.tOO t :JC.uo,ns 1 Jt.nt..560 $ 30.7u.sn 1 n .•n.a $ 2!.1?!>J77 1 u.~.oet 1 24 491.0U 1 :u.ut.2tl $ 22.015,074~~

~~Colltper lUll-time ·~\ll¥1 1ent .udent t'S,)II I n ,T~~

Gr.dlolt.. 'olk)W"" p ulbcCc• lll rU'rlbltofet ,., ,., 143 Je4 _,_ HIA 01)2 ... .,...... on p~ In WOCk.b'u employed II'A ,,. .,. ...."" '" t)ll "' IPtttttltttnQIIOytd • .....,.....,._Wtte;Onain ,.,. ,. ..,.. ,,, ,. WA .... - .... - )U ,.., ,.,, )I,Z A~•tDt 1&.0 - Aoe- ofltluO.m...... -.. 10.1 MO - .....,. ..."'iJ.otllll.ldtor. .. ,,.., tt-11 . ., 0-17 "" ...... , ......

~~Soutee: lnltlhtkln~O!perun.,cMCtbUict~W~eill•~tii'Wiflf'ltS~~

~~II) 8t\ICitflltltf"Mrtp'IMf'l" t/llt~tecJCCIUr~~

~~Blackhawk Technical College District~~

~~Debt Capacity - Ratio of New Debt to Equalized Valuation and Debt Per Capita Current Year and Ten Years Ago~~

~~Percent of Net Debt Less to Debt Flocal Equallud Oulstllndlng Amounts Not Debt Equalized per Year Population'*! Valuatianl•o Deb~'l Avallablel•l Oulslandina Voluadc>n Capita~~

2004 182.552 $ 8.9t4,744,300 s 25.565.000 $ 1,078.t79 $ 24,486,821 027% $ t34. t4 2005 163,898 9.471,022,002 23,925,000 55t ,520 23,373,480 025% 127.10 2006 185,691 t0,2t4,313,441 23,200,000 597,383 22,602.6t7 022% 121.72 2007 187,606 11.003,525.696 21.930,000 80t,659 21,128,341 0.19% 112.62 2008 t86,779 11,597 '147,342 20,610.000 835,356 19,774,642 017% 104.75 2009 t89,912 12,097,837,981 19,285,000 863,019 18,421,981 015% 97.00 2010 190, t59 t 1,998,810,726 17,915,000 902,t81 17,012,819 0.14% 89.47 2011 190,365 11,501,t74,128 20,805,000 638,986 20, 166,0t4 0.18% 105.93 2012 190,404 11,229,423,995 20.165,000 712.536 19,452,464 0.17% 102.16 2013 189,865 t t,048,410.839 20,335,000 630,076 19,704,924 0.18% 103.78

Notes: (a) Source· Wisconsin Techrical College System (b) no (Tax Incremental Oistnct) Out, excludong Wloe of exempt computer equipment Equalized ..eluauons are shown on a calendar 'fOOl: basis for the prior year Q.e. 2007 liscal year ""'-'ld be 2006 calendar year infonnatoon). (c) Details regarding the District's oulstancllng debt can be found In the notes to lhe financial slalements. (d) Equals the amounl of funds ....,llat:lo on the Oebl Sor\ice Fund restricted for the payment of debt Obligations.

~~85 Blackhawk Technical College District Blackhawk Technical College District~~

~~Debt Capacity-Direct and Overlapping Debt Debt Capacity- Direct and Overlapping Debt (Continued) As of June 30, 2013 As of June 30, 2013~~

Ptrcontago Amount Town of Applic•blo Applicoblo Adams s 19,781 96.1'11. s 19,010 Dobt to tho to tho Albany 100 O'Mo G40'v•mm,n~l Vl"'it 0\i~Mir'!£1 D''l!ri~ tl'('!ri~ AYXI 100.0'11. BelOit 6,609,776 100.0% 6 .609.776 Overlapping debt Bradbd 100.0% Coullyof Broolclyn 43.4'11. G._, s 12.245,000 789% 9,661,305 Cadiz 50,265 56.9'11. 28,612 Roclt 43.465,000 998% 43,398,030 Center 100.0% Total All Counties 55.730.000 95.2% 53,059.335 aamo 100.0% Ointon 100.0% Cnyof Decatur 100.0% Beloit 102,052,277 100.0% 102,052,277 Exeter 204.805 6.6'llo 13.517 Br0<2lead 3,809,808 100.0% 3,809,808 Fulton 100 O'Mo Edgellon 6283.234 92.7'llo 5,824,558 Hannony 70.334 100.0% 70,334 E\9t\S\4IIe 7,832.194 100.0% 7,832,194 Janeslille 100.0% Ja.-lille 86.928.331 100.0% 88,928.331 .ll!flro;oo 19,346 100.0'!fl 19,346 Mitton 17,121.904 100.0% 17,121.904 Johnst""" 100.0% Monroe 28.968.275 100.0% 28.968.275 .Jo«

~~86 87 Blackhawk Technical College District Blackhawk Technical College District~~

~~Debt Capacity- Direct and Overlapping Debt (Continued) Debt Capacity- Direct and Overlapping Debt (Continued) As of June 30, 2013 As of June 30, 2013~~

Sclloollllslllct of District Direct Debt Albany s 2,645,000 100.0% s 2,645,000 Argyle 1,325,000 32.5% 430,625 General Obi!Qabon Bond s 6,545,000 100.0% s 6,545,000 B- 7'>.'>17,701 100.0% 75,517,701 General ObliQalion Notes 13.790.000 100.0% 13.790.000 Beloit Tt.mer 7,811.686 100.0% 7,811.686 Subtotal Direct Debt 20.335.000 100.0% 20.335.000 Brodhead 740,01t 100.0% 740,011 Total Direct and Overlapping Debt 614.214.823 94.1% s 578,011.583 Clinton 9,780,000 99.6% 9,740,880 Del81<1<>-Darien 4,550,000 0.3% 13.650 Edoerton 13.475.993 73.3% 9.8n.903 Statlstlul Summary EI

The peroontage o1 oveflappong debl appliCable to the DiStriells the equalized property value o1 the 0\lettapping government located within the O.striet's bouncwies as a percentage or total equalZed value of aRproperty fO< the overlapping goverM>enL

~~88 89 Blackhawk Technical College District~~

~~Debt Capacity - Legal Debt Margin Information Last Ten Fiscal Years~~

~~20U MU "'11 2101G JaOol :NXIII :i007 m:a XIOJ MGt~~

~~E•fd.t-...lorl·lO~ ! UI1U«!2G IHT5?21131E6 S T200!:.•SU11 S t)fll~l!! I 17CXI.•ll.$71 S 12~1 J0'1..2'32 I1131P•cee S 104649JU)1 S 9f;104'n5QQ :1 IIM56UW.~~

o.t.t•-t ·!o'4d~-...... - S i1128t2-lt I !olll' tt.,ll I m .nHM S 12115e1411 I Q1 ...10ttt S II»OM1t2 I .686?1'14~ S WJ.2.>1S.W2 I 413,t74MO ..s~.nr. ..o ...f"'f91...... lllldebllodlllt• O...... ~IIIOf!l!lteo'Y"*"' 1)790.000 I 1~ ..00)0 I U.tOUOO I 1. ..eGOOO I J.tr.t&.* S ?.CO.o:» S J.?.OOO I ,_MOOOO I ?,fiOOOOO UOO.C* __ U.U.ODO 7.81$CJ:IO it.IIXI.COO 1011465.000 ll.'nO..O«< UtiOIXIO Mt.tSOlO u .m.OCIO ~01» lf.OI6..CIOO ...._,..._Ll:u~ ...... U!d~rd

~~TcUI•a.t~t~lolimll lt7'0UI24 tt.t!i.l»e :Klt».m tt.DOS.et 11J... 2t..Oit tt.n•.841 nutlolt tl.ec!)_IH n,.,n_dO ~flllt~~

IKIU.HJ ~111M IMQIOil_lll IU.• l2.t65 113oet..hl IICM0,4JO .W..IIIIU &Oa.,&t5,t7& 4110.tci!IOG- 01241.110 TCUI~OIICII~-U.Iiii"'IIHe .,.,. --~OIIMCIC ...... ""' Jll"" "'" 1~ 1~ ~~ ~~ ·~ ..... Dlbl.•t·2"401..-...o~.. l!Oltlft7 f!tl)!t!?! l4(!'!t!D§ lS!

~~loflllll.dtn..._d,.•~~

IIWUCIO l ...o::ICI ~100.000 ID"*"4!100 11."TIO,ODO IUIOCICO UI,U.CIOO n. moo:~ ...... lrOM.ooo LMM~ ...... to v-t~CII rd a---...... ~...... - 120!.7'U&' 127te111 !?II.~ !9.815) 1$25.8:111 (~.501l ftlol10lll BCQ6115\ r3142$Gl H'IQ.TOOt fCIUIIIOII10101~1c.IWM 1)11204 7.UUI4 ...... , 181l)M 11.:n.tl:rt 12 .,..-n \llf111ol U1157.»t tUOOt&G M.)ol1.3100

~Oitllm.,a I UnJ.tfm I 2ZI',IW2Q2 I 231,:10,166 $ ~1,5.:.,005 S ~1.:384.1• 'I 21tM2.662: S 2'\2117~ S IM.aoi2.11S I ln,nlil2:1 ,.,,~11'6 TCICIIINidiiOt~IOL... W..Ma ....III"("'OI.MIIMiil"'4 1"" 1151L IIIT"WWo .)Ooi'Jio ...... t.11"4 IO'l".4 71ft. IIW .. ,... oc.I...... _'"CI~O.tn;r• O.UGII\belltun::lfltn.M:II•I~f"nroll~•

~IA~IriiUI•t~IA-~t10l~IJII'e ...... ~olll'ldRI.,._.fltll'l\'~'fiNI'*...C-~·'IIN ...... diiWI ... ~tcullldwtW.~• .....IJidb.t••~ard 2 ) tooo.,.,t.c~c.. ~u~"~~•lbfW..~<:f~...,tttooo~tlt.t*"!!.,._~*"~~~c.f•elw>OI~•~--...e~~ot".....,.oiJt•tP...,.~••~-'Iot tt••~

~~fbt EGI*IIN*"'*'"'RMittct.db'DICII~~IMS•ttMtllatNII.MM4~~

~~Blackhawk Technical College District~~

~~Demographic and Economic Information - Demographic and Economic Statistics Last Ten Calendar Years~~

~~Annual PIJbllc and Personal PerCep.l~~

2004 189.~ $ 5.383,813 $ 28.237 80,443 $ 46.052 3J.403 2.430 5.71% 2005 191,313 5.524.325 28.876 81,731 47,097 3J,522 2,483 5.47% 2006 193,581 5,926,074 30,613 82,995 47,681 3J,870 2,158 5.22'4 2007 195,116 6. 130,ne 31,421 83,873 49,562 34,278 2 .492 5.21)%. 2008 197.245 6,474,632 32,825 64,474 52.316 34.442 2.575 5.11)%. 2009 197,063 6,209,184 31,505 64,594 49.662 34,405 2.833 9.43'4 2010 197,150 6,439,293 32.660 64,278 47.860 34.138 2.675 11.69%. 2011 196,003 6, 745,628 34,245 64,368 48,835 3J,560 2.426 9.64% 2012 N/A NIA N/A N/A N/A 33.529 2.432 8.49% 2013 N/A NIA NIA NIA N/A 3J.641 NIA 7.9l"ll.

~~Notes: (a) SOUfCe • US Department or Commerce, 8 ureau of E1=onomrc Analysis, fa" all dGreen and Rock counties (b) Source · US Consus Bu...... ,, Amencan Community SUI'oO)I, for all ofG~~

~~91 Blackhawk Technical College District~~

~~Demographic and Economic Information- Principal Employers Last Ten Fiscal Years~~

~~2013 2003 Em el o~ees Rank ~ees Rank~~

Mercy Health S~stems Heallh care facilrty 3,869 1 2,700 2 Se-.enlh A-enue lnlemet & calalog shopping 1,500 2 Scl\ool Dlslrict or Janes~lle Education 1.368 3 1,416 3 Rock County Gowmment 1,161 4 1,400 4 6oloit Memorial Hospital Medico! faolllty 1,001! 5 1,014 7 Monroe Clinic Hospital Medrcal facility 917 6 Sc~ool Olslrict or BelOit Education 831 7 1,024 6 WalmM Oiscounl department stores ~\ 840 8 Colony Brands Inc. Pl Mfgr./Mall ortlor food and gills > B30 9 1,300 5 GHC Specially Bra nels Dislnbutorofaafoty equipment & &uppllos 800 tO 818 9 Truck and Bus Group. Q~sion of Genral Motors Manufacture ol...,hicles 3,500 1 Lear Sealing Colpoiallon SeaU11Q lot motor -ehlcles 900 8 Frito-Lay Snack Foods ~ .) 800 10

~~Socrce: Green and Rock counlies end olllcial sta1001ents of municipalities wrthrn Rock and Green counties. Pnl'oided by R.W. Baud & Co.. Inc.~~

~~(1) Colony Brarnls Inc. employs an addlllonal 5,001).5,500 employees during lhe holiday season.~~

~~Blackhawk Technical College District~~

~~Operating Information -Full-Time Equivalent District Employees by Employee Group Last Ten Fiscal Years~~

10j2___ .. 11 2G!JS___ .... _ 2t1> 2010 ~---2tj_.___ lt!;O? 8y flay Oroups: FuH--tmelnat~Cifs 112 Ill 114 111 ,.. ,., 103 102 ,.. ,... P1111-lhlelntlrVCIDR ,. ,. ,. ,. - ,. 43 42 .. 32 33 Adrrllnl•ttwtJon 75 75 74 72 71 ,. 74 , p.,..~ ·~.,....OM4tt ,. 27 30 "27 30 2S ,." 32 ., fuiHme cJef1cat ltld WII ... ''" "' ... 201 m ~~'": HurNn RltfOU'(:IM ~ emplc," nt 001111 N o4 WrtlO ot ..cl\ ,... · ., <()'-

~~93 Blackhawk Technical College District~~

~~Operating Information - Operational Expenditures per Full-Time Equivalent (FTE) Student Last Ten Fiscal Years~~

Operational Expendlturaslll (oGoneral and Spacial BTC Operational Statewide Operational Revonuo-Aidabla Fund!) Student Enrollments E.x~ndlturo ~er Student Ex~un dituro !!Or Studont Full-time Percent Percent Amount Percent Equivalent Increase/ P or FTE Increase/ PerFTE 11 Year lin ooo·s~ Increase Stude nilS !Oocrea 110~ Students !Oocroaso) Students Rank1

~~2004 $ 22,01~ 1.0% 1,978 2.2% ~ 11, 130 ·1.2% s 11,!14'1~~

~~2005 23,359 6.1% 1,929 -2.5% 12,109 8.8% 12,170 10~~

~~2006 24,491 4.8% 1,870 ...J.t% 1~,097 8.2% 12,813 11~~

~~2007 25,054 2.3% 1,840 - 1.6% 13.616 4.0% 13.567 11~~

~~200il 25,629 2.3% 1.906 3.5% 13,454 -1,2% 13.725 8~~

~~2009 27,478 7.2% 2.358 23.8% 11,653 -13.4% 13,705~~

~~2010 30,723 11.8% 2,916 23.7% 10,536 ·9.6% 12,785~~

~~2011 31,732 3.3% 2,830 -2.9% 11,213 6.4% 13,172~~

~~2012 30,120 -5.1% 2,566 -9.4% 11,743 4.7% 13.519~~

~~2012 30.446 1.1% 2,286 -10.9% 13.318 13.4% (2) (2)~~

Notot: (1) R&"'k amoung 16 WTCS dlst~cl s. (11s the towesl161s the highest) (2) Nol yet svaolable (3) For purposes of tros calcutallon, opor.atlonal expen4itures is based upon the budgetary expendihxes from the districts' General and Speclol R9'Ainue-Ardable funds as rapo~ed to the Wisconsin Technical College System.

~~Blackhawk Technical College District~~

~~Operating Information - Campus Statistics Last Ten Fiscal Years~~

2013 2012 2011 2010 2008 2008 2007 2008 2005 2004 SqUire Footage C.1mpusee MBin campu5 • JOOM'Iile 291.452 291,452 291.452 291.452 291,452 291.452 291,452 291,452 291,452 204,266 A.ioUcn Corter 25 210 25.210 :16.210 25,210 2$.210 2$,210 25,210 25,210 24.300 24.300 BeklOI Conws 29,068 29,068 IMOO 15,000 4,000 4.000 4,000 4,000 4,000 4,000 Centef bfimmpornlion S lud1es 30.846 30.846 30.846 30.848 30,846 30,846 30,846 30.846 30,846 30.846 MontOO Cimp<.oo 24,203 24.ro3 24.203 24203 24,Qr23 24.Cir23 24,023 24.Qr23 24,023 12.000 Total for c:~mpu•• 400.779 400,179 386,711 388.711 3",531 375,531 375.531 375.531 374,621 275,432

F•cUIU.I Admn'llwa-:ion Blllkklg 6,000 6.000 6.000 6.000 6,000 6.000 6,000 6,000 6.000 6.000 Stcn>ge Burel ng • Cen1tol c.m..,. 3750 3.750 3.750 3.750 3,750 3.750 3750 3,750 3.750 3.750 Stomge 8Uid·I"G ·Admin 1.650 1,1160 1,650 1,650 1.650 1.650 1.650 1,650 1.650 1... 0 l'otaDto r bciUtles 11.4[1(] 11,.400 11.400 11.400 11,400 11,400 11,400 1 t.400 11 ,400 11,400

~~Orend Totall'' 412 179 412 ,1~ 398. II I :196 II 1 308,931 388,931 308,931 :186,931 Jee.021 288,8:12~~

~~(11 The reg1cna1... ton ore not Included In thlo oc-. 1tto reo•onoJ oonl"" 010 not a Oignfficant poll <>! tho coltogo QPO!lll ~~~

~~So-.xce: Burilldlngs & Grounds ~rtmert~~

~~APPENDIX B~~

~~FORM OF~~

~~CONTINUING DISCLOSURE CERTIFICATE~~

This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by Blackhawk Technical College District, Rock and Green Counties, Wisconsin (the "Issuer") in connection with the issuance of $1,500,000 General Obligation Promissory Notes, Series 2013D, dated December 5, 2013 (the "Securities"). The Securities are being issued pursuant to Resolutions adopted by the Governing Body of the Issuer on October 17, 2013 and November 21, 2013 (collectively, the "Resolution") and delivered to ______(the "Purchaser") on the date hereof. Pursuant to the Resolution, the Issuer has covenanted and agreed to provide continuing disclosure of certain financial information and operating data and timely notices of the occurrence of certain events. In addition, the Issuer hereby specifically covenants and agrees as follows:

Section 1(a). Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the holders of the Securities in order to assist the Participating Underwriters within the meaning of the Rule (defined herein) in complying with SEC Rule 15c2-12(b)(5). References in this Disclosure Certificate to holders of the Securities shall include the beneficial owners of the Securities. This Disclosure Certificate constitutes the written Undertaking required by the Rule.

Section 1(b). Filing Requirements. Any filing under this Disclosure Certificate must be made solely by transmitting such filing to the MSRB (defined herein) through the Electronic Municipal Market Access ("EMMA") System at www.emma.msrb.org in the format prescribed by the MSRB. All documents provided to the MSRB shall be accompanied by the identifying information prescribed by the MSRB.

Section 2. Definitions. In addition to the defined terms 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:

~~"Annual Report" means any annual report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.~~

"Audited Financial Statements" means the Issuer's annual financial statements, which are currently prepared in accordance with generally accepted accounting principles (GAAP) for governmental units as prescribed by the Governmental Accounting Standards Board (GASB) and which the Issuer intends to continue to prepare in substantially the same form.

~~"Final Official Statement" means the Final Official Statement dated November 21, 2013 delivered in connection with the Securities, which is available from the MSRB.~~

~~"Fiscal Year" means the fiscal year of the Issuer.~~

~~"Governing Body" means the District Board of the Issuer or such other body as may hereafter be the chief legislative body of the Issuer.~~

~~"Issuer" means Blackhawk Technical College District, Wisconsin, which is the obligated person with respect to the Securities.~~

QB\23746002.1 "Issuer Contact" means the Vice President, Finance & College Operations of the Issuer who can be contacted at 6004 South County Road G, P.O. Box 5009, Janesville, WI 53547- 5009, phone (608) 757-7700, fax (608) 757-7740.

~~"Material Event" means any of the events listed in Section 5(a) of this Disclosure Certificate.~~

~~"MSRB" means the Municipal Securities Rulemaking Board located at 1900 Duke Street, Suite 600, Alexandria, Virginia 22314.~~

~~"Participating Underwriter" means any of the original underwriter(s) of the Securities (including the Purchaser) required to comply with the Rule in connection with the offering of the Securities.~~

~~"Rule" means SEC Rule 15c2-12(b)(5) promulgated by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time, and official interpretations thereof.~~

~~"SEC" means the Securities and Exchange Commission.~~

~~Section 3. Provision of Annual Report and Audited Financial Statements.~~

(a) The Issuer shall, not later than April 1 of each year, commencing April 1, 2015, provide the MSRB with an Annual Report filed in accordance with Section 1(b) of this Disclosure Certificate and 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 that, if Audited Financial Statements are not available by April 1 of any year, unaudited financial information will be provided, and Audited Financial Statements will be submitted to the MSRB when and if available.

(b) If the Issuer is unable or fails to provide to the MSRB an Annual Report by the date required in subsection (a), the Issuer shall send in a timely manner a notice of that fact to the MSRB in the format prescribed by the MSRB, as described in Section 1(b) of this Disclosure Certificate.

Section 4. Content of Annual Report. The Issuer's Annual Report shall contain or incorporate by reference the Audited Financial Statements, adopted annual budget and/or current general fund budget summary and updates of the following sections of the Final Official Statement to the extent such financial information and operating data are not included in the Audited Financial Statements:

~~1. Tax Levies, Rates and Collections 2. Equalized Valuations 3. Indebtedness of the District — Direct Indebtedness~~

-2- QB\23746002.1 Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which are available to the public on the MSRB’s Internet website or filed with the SEC. The Issuer shall clearly identify each such other document so incorporated by reference.

~~Section 5. Reporting of Material Events.~~

~~(a) This Section 5 shall govern the giving of notices of the occurrence of any of the following events with respect to the Securities:~~

~~1. Principal and interest payment delinquencies;~~

~~2. Non-payment related defaults, if material;~~

~~3. Unscheduled draws on debt service reserves reflecting financial difficulties;~~

~~4. Unscheduled draws on credit enhancements reflecting financial difficulties;~~

~~5. Substitution of credit or liquidity providers, or their failure to perform;~~

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 Securities, or other material events affecting the tax status of the Securities;

~~7. Modification to rights of holders of the Securities, if material;~~

~~8. Securities calls, if material, and tender offers;~~

~~9. Defeasances;~~

~~10. Release, substitution or sale of property securing repayment of the Securities, if material;~~

~~11. Rating changes;~~

~~12. Bankruptcy, insolvency, receivership or similar event 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.~~

~~For the purposes of the event identified in subsection (a)12. above, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent~~

-3- QB\23746002.1 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.

(b) When a Material Event occurs, the Issuer shall, in a timely manner not in excess of ten business days after the occurrence of the Material Event, file a notice of such occurrence with the MSRB. Notwithstanding the foregoing, notice of Material 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 holders of affected Securities pursuant to the Resolution.

~~(c) Unless otherwise required by law, the Issuer shall submit the information in the format prescribed by the MSRB, as described in Section 1(b) of this Disclosure Certificate.~~

Section 6. Termination of Reporting Obligation. The Issuer's obligations under the Resolution and this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all the Securities.

Section 7. Issuer Contact; Agent. Information may be obtained from the Issuer Contact. Additionally, the Issuer may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under the Resolution and this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor dissemination agent.

Section 8. Amendment; Waiver. Notwithstanding any other provision of the Resolution or this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is supported by an opinion of nationally recognized bond counsel to the effect that such amendment or waiver would not, in and of itself, cause the undertakings to violate the Rule. The provisions of this Disclosure Certificate constituting the Undertaking or any provision hereof, shall be null and void in the event that the Issuer delivers to the MSRB an opinion of nationally recognized bond counsel to the effect that those portions of the Rule which require this Disclosure Certificate are invalid, have been repealed retroactively or otherwise do not apply to the Securities. The provisions of this Disclosure Certificate constituting the Undertaking may be amended without the consent of the holders of the Securities, but only upon the delivery by the Issuer to the MSRB of the proposed amendment and an opinion of nationally recognized bond counsel to the effect that such amendment, and giving effect thereto, will not adversely affect the compliance of this Disclosure Certificate and by the Issuer with the Rule.

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 Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses

-4- QB\23746002.1 to include any information in any Annual Report or notice of occurrence of a Material 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 Material Event.

Section 10. Default. (a) Except as described in the Final Official Statement, in the previous five years, the Issuer has not failed to comply in all material respects with any previous undertakings under the Rule to provide annual reports or notices of material events.

(b) In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate any holder of the Securities may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under the Resolution and this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default with respect to the Securities 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. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Participating Underwriters and holders from time to time of the Securities, and shall create no rights in any other person or entity.

~~IN WITNESS WHEREOF, we have executed this Certificate in our official capacities effective the 5th day of December, 2013.~~

~~______Kevin D. Leavy Chairperson~~

~~(SEAL)~~

~~______Craig P. Duncan Secretary~~

~~-5- QB\23746002.1~~

~~APPENDIX C~~

~~FORM OF~~

~~LEGAL OPINION~~

~~Quarles & Brady LLP 411 East Wisconsin Avenue Milwaukee, WI 53202~~

~~December 5, 2013~~

~~Re: Blackhawk Technical College District, Wisconsin ("Issuer") $1,500,000 General Obligation Promissory Notes, Series 2013D, dated December 5, 2013 ("Notes")~~

We have acted as bond counsel to the Issuer in connection with the issuance of the Notes. In such capacity, we have examined such law and such certified proceedings, certifications, and other documents as we have deemed necessary to render this opinion.

Regarding questions of fact material to our opinion, we have relied on the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation.

~~The Notes are numbered from R-1 and upward; bear interest at the rates set forth below; and mature on April 1 of each year, in the years and principal amounts as follows:~~

~~Year Principal Amount Interest Rate~~

~~2020 $325,000 ____% 2021 350,000 ____ 2022 375,000 ____ 2023 450,000 ____~~

~~Interest is payable semi-annually on April 1 and October 1 of each year commencing on April 1, 2014.~~

The Notes are subject to redemption prior to maturity, at the option of the Issuer, on April 1, 2019 or on any date thereafter. Said Notes are redeemable as a whole or in part, and if in part, from maturities selected by the Issuer and within each maturity, by lot, at the principal amount thereof, plus accrued interest to the date of redemption.

~~We further certify that we have examined a sample of the Notes and find the same to be in proper form.~~

~~Based upon and subject to the foregoing, it is our opinion under existing law that:~~

~~1. The Notes have been duly authorized and executed by the Issuer and are valid and binding general obligations of the Issuer.~~

~~2. All the taxable property in the territory of the Issuer is subject to the levy of ad valorem taxes to pay principal of, and interest on, the Notes, without limitation as to rate or~~

QB\23745721.1 amount. The Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Notes except to the extent that necessary funds have been irrevocably deposited into the debt service fund account established for the payment of the principal of and interest on the Notes.

3. The interest on the Notes is excludable for federal income tax purposes from the gross income of the owners of the Notes. The interest on the Notes is not an item of tax preference for purposes of the federal alternative minimum tax imposed by Section 55 of the Internal Revenue Code of 1986, as amended (the "Code") on corporations (as that term is defined for federal income tax purposes) and individuals. However, for purposes of computing the alternative minimum tax imposed on corporations, the interest on the Notes is included in adjusted current earnings. The Code contains requirements that must be satisfied subsequent to the issuance of the Notes in order for interest on the Notes to be or continue to be excludable from gross income for federal income tax purposes. Failure to comply with certain of those requirements could cause the interest on the Notes to be included in gross income retroactively to the date of issuance of the Notes. The Issuer has agreed to comply with all of those requirements. The opinion set forth in the first sentence of this paragraph is subject to the condition that the Issuer comply with those requirements. We express no opinion regarding other federal tax consequences arising with respect to the Notes.

We express no opinion regarding the accuracy, adequacy, or completeness of the Official Statement or any other offering material relating to the Notes. Further, we express no opinion regarding tax consequences arising with respect to the Notes other than as expressly set forth herein.

The rights of the owners of the Notes and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights and may be subject to the exercise of judicial discretion in accordance with general principles of equity, whether considered at law or in equity.

This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur.

~~QUARLES & BRADY LLP~~

~~QB\23745721.1~~

~~APPENDIX D~~

~~OFFICIAL NOTICE OF SALE AND BID FORM FOR~~

~~$1,500,000 BLACKHAWK COLLEGE DISTRICT, WISCONSIN Rock and Green Counties General Obligation Promissory Notes, Series 2013D~~

~~Sale Data:~~

~~Sale Date and Time: Thursday, November 21, 2013 9:30 a.m. Central Time~~

~~Place: Robert W. Baird & Co. Public Finance Department 777 East Wisconsin Avenue, 25th Floor~~

~~Attention: Ms. Katherine Voss Phone: (414) 765-3827 Fax: (414) 298-7354~~

~~Bids will be accepted electronically via PARITY~~

~~OFFICIAL NOTICE OF SALE~~

~~$1,500,000 BLACKHAWK TECHNICAL COLLEGE DISTRICT ROCK AND GREEN COUNTIES, WISCONSIN GENERAL OBLIGATION PROMISSORY NOTES, SERIES 2013D DATED DECEMBER 5, 2013~~

~~______~~

NOTICE IS HEREBY GIVEN that bids will be received by the District Board, Blackhawk Technical College District, Rock and Green Counties, Wisconsin for the purchase of all but no part of its Notes at the offices of the District's financial advisor, Robert W. Baird & Co. Incorporated ("Baird"), 25th Floor, 777 East Wisconsin Avenue, Milwaukee, WI 53202, Attention: Ms. Katherine Voss until 9:30 a.m. (Central Time) on

November 21, 2013 at which time the bids will be publicly opened and read. Bids may be mailed or delivered to Baird at the address set forth above, faxed to Baird at (414) 298-7354, or submitted electronically via PARITY, as described below. Signed bids, without final price or coupons, may be submitted to Baird prior to the time of sale. The bidder shall be responsible for submitting to Baird the final bid price and coupons, by telephone (414) 765-3827 or fax (414) 298-7354 for inclusion in the submitted bid. Bids which are mailed or delivered should be plainly marked "Bid for Blackhawk Technical College District Notes". Bids will only be considered if the required good faith deposit has been received. A meeting of the District Board will be held on said date for the purpose of taking action on such bids as may be received.

~~Dates and Maturities: The Notes will be dated December 5, 2013 and will mature on April 1 of each year, in the years and principal amounts as follows:~~

~~Year Principal Amount~~

~~2020 $325,000 2021 350,000 2022 375,000 2023 450,000~~

Interest: Interest on the Notes will be payable semi-annually on April 1 and October 1 of each year, commencing on April 1, 2014 to the registered owners of the Notes appearing of record in the bond register as of the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. Interest will be computed upon the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to rules of the MSRB.

Optional Redemption: The Notes will be subject to redemption prior to maturity, at the option of the District, on April 1, 2019 or on any date thereafter. Said Notes will be redeemable as a whole or in part, and if in part, from maturities selected by the District and within each maturity, by lot, at the principal amount thereof, plus accrued interest to the date of redemption.

~~QB\23745650.1 No Term Bond Option: Bids for the Notes may not provide for term bonds.~~

Security and Purpose: The Notes are general obligations of the District. The principal of and interest on the Notes will be payable from ad valorem taxes, which may be levied without limitation as to rate or amount upon all of the taxable property located in the District. The Notes will be issued for the purpose of paying the cost of building remodeling and improvement projects.

Registration: The Notes will be issued as fully-registered Notes without coupons and, when issued, will be registered only in the name of CEDE & CO., as nominee for The Depository Trust Company, New York, New York ("DTC").

DTC Book Entry Only System: UTILIZATION OF DTC IS REQUIRED. BIDS FOR THE NOTES MAY NOT PROVIDE FOR THE NOTES TO BE ISSUED ON A NON-DTC BASIS. DTC will act as securities depository of the Notes. A single Note certificate for each maturity will be issued to DTC and immobilized in its custody. Individual purchases may be made in book-entry form only pursuant to the rules and procedures established between DTC and its participants, in the denomination of $5,000 or any integral multiple thereof. Individual purchasers will not receive certificates evidencing their ownership of the Notes purchased. The successful bidder shall be required to deposit the Note certificates with DTC as a condition to delivery of the Notes. The District will make payments of principal and interest on the Notes to DTC or its nominee as registered owner of the Notes in same-day funds. Transfer of those payments to participants of DTC will be the responsibility of DTC; transfer of the payments to beneficial owners by DTC participants will be the responsibility of such participants and other nominees of beneficial owners all as required by DTC rules and procedures. No assurance can be given by the District that DTC, its participants and other nominees of beneficial owners will make prompt transfer of the payments as required by DTC rules and procedures. The District assumes no liability for failures of DTC, its participants or other nominees to promptly transfer payments to beneficial owners of the Notes.

Depository: In the event that the securities depository relationship with DTC for the Notes is terminated and the District does not appoint a successor depository, the District will prepare, authenticate and deliver, at its expense, fully-registered certificated Notes in the denomination of $5,000 or any integral multiple thereof in the aggregate principal amount of Notes of the same maturities and with the same interest rate or rates then outstanding to the beneficial owners of the Notes.

Designation as Qualified Tax-Exempt Obligations: The Notes will be designated "qualified tax-exempt obligations" pursuant to the provisions of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. The Secretary or other officer of the District charged with the responsibility for issuing the Notes, shall provide an appropriate certificate of the District as of the date of delivery and payment for the Notes confirming the "qualified" status.

Bid Specifications: Bids will be received on an interest rate basis in integral multiples of One-Twentieth (1/20) or One-Eighth (1/8) of One Percent (1%). Any number of rates may be bid but the difference between the highest and lowest rate bid shall not exceed Two Percent (2.00%). All Notes of the same maturity shall bear the same interest rate. No bid for less than One Hundred Percent (100%) of the principal amount of the Notes ($1,500,000) nor more than

-2- QB\23745650.1 One Hundred Two Percent (102%) of the principal amount of the Notes ($1,530,000) plus accrued interest to the date of delivery will be considered. The Notes will be awarded to a responsible bidder whose proposal results in the lowest true interest cost to the District.

Type of Bid – Amount: Bids must be submitted either: (1) to Robert W. Baird & Co. Incorporated as set forth herein; or (2) electronically via PARITY, in accordance with this Official Notice of Sale, within a one hour period prior to the time of sale, but no bids will be received after the time established above for the opening of bids. If any provisions in this Notice are conflicting with any instructions or directions set forth in PARITY, this Official Notice of Sale shall control. The normal fee for use of PARITY may be obtained from PARITY, and such fee shall be the responsibility of the bidder. For further information about PARITY, potential bidders may contact Robert W. Baird & Co. Incorporated, 25th Floor, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202 or PARITY, c/o i-Deal LLC, 1359 Broadway, 2nd Floor, New York, New York 10018, telephone (212) 849-5021. The District and Robert W. Baird & Co. Incorporated assume no responsibility or liability for bids submitted through PARITY. Each bidder shall be solely responsible for making necessary arrangements to access PARITY for purposes of submitting its electronic bid in a timely manner and in compliance with the requirements of the Official Notice of Sale. Neither the District, its agents nor PARITY shall have any duty or obligation to undertake registration to bid for any prospective bidder or to provide or ensure electronic access to any qualified prospective bidder, and neither the District, its agents nor PARITY shall be responsible for a bidder's failure to register to bid or for any failure in the proper operation of, or have any liability for any delays or interruptions of or any damages caused by the services of PARITY. The District is using the services of PARITY solely as a communication mechanism to conduct the electronic bidding for the Notes, and PARITY is not an agent of the District.

The District may regard the electronic transmission of the bid via the electronic service (including information about the purchase price for the Notes and interest rate or rates to be borne by the Notes and any other information included in such transmission) as though the same information were submitted on the bid form and executed on behalf of the bidder by a duly authorized signatory. If the bid is accepted by the District, the terms of the bid form, this Official Notice of Sale, and the information transmitted though the electronic service shall form a contract, and the bidder shall be bound by the terms of such contract.

For information purposes only, bidders are requested to state in their electronic bids the true interest cost to the District, as described in this Official Notice of Sale and in the written form of Official Bid Form. All electronic bids shall be deemed to incorporate the provisions of this Official Notice of Sale and the form of Official Bid Form.

Good Faith Deposit: A cashier's check in the amount of $30,000 may be submitted contemporaneously with the bid or, in the alternative, a deposit in the amount of $30,000 shall be made by the winning bidder by federal wire transfer as directed by the District Treasurer to be received by the District no later than 1:00 p.m. prevailing Central Time on the day of the bid opening (November 21, 2013) as a guarantee of good faith on the part of the bidder to be forfeited as liquidated damages if such bid be accepted and the bidder fails to take up and pay for the Notes. The good faith deposit will be applied to the purchase price of the Notes. In the event the successful bidder fails to honor its accepted bid, the good faith deposit will be retained by the District. No interest shall be allowed on the good faith deposit. Payment for the balance

-3- QB\23745650.1 of the purchase price of the Notes shall be made at the closing. Good faith checks of unsuccessful bidders will be returned by overnight delivery for next day receipt sent not later than the first business day following the sale.

Bond Insurance at Bidder's Option: If the Notes qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the bidder, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the successful bidder. Any increased costs of issuance of the Notes resulting from such purchase of insurance shall be paid by the successful bidder, except that, if the District has requested and received a rating on the Notes from a rating agency, the District will pay that rating fee. Any other rating agency fees shall be the responsibility of the successful bidder. Failure of the municipal bond insurer to issue the policy after the Notes have been awarded to the successful bidder shall not constitute cause for failure or refusal by the successful bidder to accept delivery on the Notes.

Delivery: The Notes will be delivered in printed form, one Note per maturity, registered in the name of CEDE & CO., as nominee of The Depository Trust Company, securities depository of the Notes for the establishment of book-entry accounts at the direction of the successful bidder, within approximately forty-five (45) days after the award. Payment at the time of delivery must be made in federal or other immediately available funds. In the event delivery is not made within forty-five (45) days after the date of the sale of the Notes, the successful bidder may, prior to tender of the Notes, at its option, be relieved of its obligation under the contract to purchase the Notes and its good faith deposit shall be returned, but no interest shall be allowed thereon.

Legality: The successful bidder will be furnished without cost, the unqualified approving legal opinion of Quarles & Brady LLP of Milwaukee, Wisconsin. A transcript of the proceedings relative to the issuance of the Notes (including an arbitrage certificate and a no- litigation certificate) will be furnished to the successful bidder without cost. A Continuing Disclosure Certificate will be delivered at closing setting forth the details and terms of the District's undertaking and such Certificate is a condition of closing.

Award Conditional: The award of the Notes will be made subject to expiration of the petition period provided for under Section 67.12(12)(e)5, Wisconsin Statutes, without the filing of a sufficient petition for a referendum with respect to the Notes.

CUSIP Numbers: The District will assume no obligation for the assignment of CUSIP numbers on the Notes or for the correctness of any numbers printed thereon. The District will permit such numbers to be assigned and printed at the expense of the successful bidder, but neither the failure to print such numbers on any Notes nor any error with respect thereto will constitute cause for failure or refusal by the successful bidder to accept delivery of the Notes.

Reoffering Prices: Simultaneously with or before delivery of the Notes, the successful bidder shall furnish to the District a certificate, made on the best knowledge, information and belief of the successful bidder, acceptable to bond counsel, stating the initial reoffering prices to the public of each maturity of the Notes and further stating that a substantial amount of each maturity of the Notes was sold to the public or final purchasers thereof (not including bond

~~-4- QB\23745650.1 houses and brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at or below such initial reoffering prices.~~

Official Statement: Bidders may obtain a copy of the Preliminary Official Statement by request to the District's financial advisor prior to the bid opening. By submitting a bid, the successful bidder agrees to supply to the District within 24 hours after the award of the Notes all necessary pricing information and any underwriter identification necessary to complete the Preliminary Official Statement. Within seven days of the award of the Notes, the successful bidder will be provided with an electronic copy of the Official Statement in pdf format. If the successful bidder is the manager of an underwriting syndicate, the successful bidder shall be responsible for distributing copies of the Official Statement to syndicate members.

Certification Regarding Official Statement: The District will deliver, at closing, a certificate, executed by appropriate officers of the District acting in their official capacities, to the effect that the facts contained in the Official Statement relating to the District and the Notes are true and correct in all material respects, and that the Official Statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The District also agrees to notify the successful bidder of any material developments impacting the District or the Notes of which the District becomes aware within 60 days after the delivery of the Notes.

Undertaking to Provide Continuing Disclosure: In order to assist bidders in complying with SEC Rule 15c2-12, as amended, the District will covenant to undertake (pursuant to a Resolution to be adopted by the District Board), to provide annual reports and timely notice of certain events for the benefit of holders of the Notes. The details and terms of the undertaking are set forth in a Continuing Disclosure Certificate to be executed and delivered by the District, a form of which is included in the Preliminary Official Statement and in the Final Official Statement.

~~Irregularities: The District reserves the right to reject any and all bids and to waive any and all irregularities.~~

Information: The internet address for the Preliminary Official Statement is: www.bairdbondsales.com. Copies of the Preliminary Official Statement and additional information may be obtained by addressing inquiries to: Robert W. Baird & Co. Incorporated, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202; Attention: Ms. Katherine Voss, (414) 765-3827 or the undersigned.

~~Renea Ranguette Vice President, Finance & College Operations Blackhawk Technical College District 6004 South County Road G P.O. Box 5009 Janesville, WI 53547-5009 Phone: (608) 757-7700~~

~~-5- QB\23745650.1 November 21, 2013 BID FORM BLACKHAWK TECHNICAL COLLEGE DISTRICT, WISCONSIN $1,500,000 General Obligation Promissory Notes, Series 2013D~~

~~Kevin D. Leavy, District Chairperson and Members of the District Board Blackhawk Technical College District 6004 Prairie Road, County Trunk G Janesville, Wisconsin 53547~~

~~Dear Mr. Leavy and Members of the District Board:~~

For all but no part of your issue of $1,500,000 General Obligation Promissory Notes, Series 2013D (the “Notes”), said bid being no less than $1,500,000 (100% of par) nor more than $1,530,000 (102% of par), we offer to pay a price of $______. The dated date and the delivery date of the Notes is December 5, 2013. The Notes shall bear interest as follows:

~~Year Rate April 1, 2020 ______% April 1, 2021 ______% April 1, 2022 ______% April 1, 2023 ______%~~

This bid is made subject to all the terms and conditions of the Official Notice of Sale heretofore received and the Official Notice of Sale heretofore published, all terms and conditions which are made a part hereof as fully as though set forth in full in this bid.

~~______Managing Underwriter Direct Contact and Phone Number: ______~~

~~By: ______~~

~~- Please attach a list of account members -~~

~~For your information, but not as a condition of this bid, the above interest rates result in:~~

~~Net Interest Cost $ True Interest Rate %~~

The foregoing offer is hereby accepted this 21st day of November 2013 by the Members of the District Board and in recognition therefore is signed by the Officers empowered and authorized to make such acceptance.

~~______District Chairperson District Secretary~~