PRELIMINARY OFFICIAL STATEMENT DATED FEBRUARY 3, 2015

BOOK-ENTRY ONLY Rating: S&P Underlying: “A+” (Stable Outlook) Insured: ______

In the opinion of Bond Counsel, assuming continuing compliance by the School District with certain covenants to comply with provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and all regulations applicable thereunder, and subject to the conditions described in “TAX EXEMPTION AND OTHER TAX MATTERS” herein, interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on corporations (as defined in the Code). Other provisions of the Code may affect the purchasers and holders of the Bonds. Under the laws of the Commonwealth of Pennsylvania, as currently enacted and construed, the Bonds are exempt from personal property taxes in Pennsylvania and the interest on the Bonds is exempt from Pennsylvania personal income tax and Pennsylvania corporate net income tax.

The Bonds are "qualified tax exempt obligations", for purposes and effect contemplated by Section 265 of the Internal Revenue Code of 1986, as amended

. Under no circumstances shall this Preliminary (relating to expenses and interest relating to tax-exempt income of certain financial institutions).

For further information concerning federal and state tax matters relating to the Bonds, see "Tax Exemption and Other Tax Matters" herein.

$9,995,000*

offer, solicitation or sale would be unlawful prior to registration to registration prior sale would be unlawful solicitation or offer, COLUMBIA BOROUGH SCHOOL DISTRICT Lancaster County, Pennsylvania General Obligation Bonds, Series of 2015

Bonds Dated: Date of Delivery Interest Payable: June 1 and December 1 Principal Due: June 1 as shown on the inside cover First Interest Payment: June 1, 2015 Denominations: Integral multiples of $5,000 Form: Book-Entry Only

Book-entry Only: The General Obligation Bonds, Series of 2015, in the aggregate principal amount of $9,995,000* (the “Bonds”), of the Columbia Borough School District (the “School District”), located in Lancaster County, Pennsylvania, will be in book-entry only form, registered in the name of Cede & Co. as nominee for the Depository Trust Company, New York, New York (“DTC”). DTC will act as the securities depository for the Bonds. Purchasers of the ties in any jurisdiction in which such ties in any jurisdiction which Bonds will not receive certificates representing their interests in the Bonds. While DTC, or its nominee, Cede & Co., is the registered owner of the Bonds, payments of the principal and interest on the Bonds will be made by Manufacturers and Traders Trust Company, Harrisburg, Pennsylvania, serving as paying agent, directly to Cede & Co. Disbursement of such payments to the DTC Participants is the responsibility of DTC, and disbursements of such payments to Beneficial Owners of the Bonds is the responsibility of the DTC Participants and the Indirect Participants. See “BOOK-ENTRY ONLY SYSTEM” herein.

Optional Redemption: The Bonds maturing on or after ______, are subject to redemption prior to maturity at the option of the School District, at a redemption price equal to the principal amount thereof plus accrued interest to the date fixed for redemption, in whole or in part (and if in part, in such order of maturity as the School District shall select and within a maturity by lot) at any time on and after ______.

Purpose: Proceeds of the Bonds will be used to provide funds to: (1) currently refund a portion of the outstanding General Obligation Bonds, Series of 2010,

AINED HEREIN ARE SUBJECT TO COMPLETION AND AMENDMENT of the School District; and (2) pay the costs of issuing and insuring the Bonds. e be any sale of these securi e be any sale of these

Security: The Bonds are payable from tax and other general revenues of the School District. The School District has covenanted in its Resolution adopted on January 15, 2015 (the “Resolution”), that it will budget in each year, and will appropriate from its general revenues in each such year, the amount of the debt service due on the Bonds for such year, and for such budgeting, appropriation and payment the School District irrevocably has pledged its full faith, credit and taxing power, which taxing power includes the power to levy ad valorem taxes on all taxable property with the School District, to the extent permitted by law (see “Security for the Bonds” and “Taxing Limits Under Act 1 of 2006” herein).

Legal Investment for Fiduciaries in Pennsylvania: The Bonds are a legal investment for fiduciaries in the Commonwealth of Pennsylvania under the Probate, Estate and Fiduciaries Code, Act of June 30, 1972, No. 164, P.L. 508 as amended and supplemented.

an offer to buy nor shall ther an offer to buy nor Bond Insurance: The scheduled payment of principal of and interest on the Bonds when due is guaranteed under a municipal bond insurance policy issued concurrently with the delivery of the Bonds by ______- [INSURANCE LOGO]

The Bonds are offered for delivery when, as and if issued by the School District and received by the Underwriter, subject to the approving legal opinion of McNees Wallace & Nurick LLC, Lancaster, Pennsylvania, Bond Counsel to the School District, to be furnished upon delivery of the Bonds. Certain legal matters will be passed upon by Nikolaus & Hohenadel, Columbia, Pennsylvania, Solicitor to the School District. It is expected that the Bonds will be available for delivery, through the facilities of DTC, on or about ______.

The date of this Official Statement is ______-

*Preliminary, subject to change. . THIS PRELIMINARY OFFICIAL STATEMENT AND THE INFORMATION CONT Official Statement constitute an offer to sell or a solicitation of or qualification under the securities laws of such jurisdiction.

$9,995,000* COLUMBIA BOROUGH SCHOOL DISTRICT Lancaster County, Pennsylvania General Obligation Bonds, Series of 2015

Bonds Dated: Date of Delivery Interest Payable: June 1 and December 1 Principal Due: June 1 as shown below First Interest Payment: June 1, 2015 Denominations: Integral multiples of $5,000 Form: Book-Entry Only

Principal Maturity Schedule Principal Principal Year Amount Interest Rate Price Year Amount Interest Rate Price 2015 2022 2016 2023 2017 2024 2018 2025 2019 2026 2020 2027 2021

*Preliminary, subject to change.

No dealer, broker, salesman or other person has been authorized by the School District or the Underwriters to give any information or to make any representation, other than that given or made in this Official Statement, and if given or made, any such other information or representation may not be relied upon as having been authorized by the School District or the Underwriters. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. This Official Statement has been approved by the School District and, while the information set forth in this Official Statement has been furnished by the School District and other sources which are believed to be reliable, such information is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Underwriters or, as to information obtained from other sources, by the School District. The information and expressions of opinion set forth in this Official Statement are subject to change without notice and neither the delivery of this Official Statement nor any sale made under this Official Statement shall, under any circumstances, create any implication that the affairs of the School District have remained unchanged since the date of this Official Statement.

[Insurance language]

THE UNDERWRITER HAS PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION IN THIS OFFICIAL STATEMENT. THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT PURSUANT TO ITS RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS, BUT THE UNDERWRITER DOES NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION.

TABLE OF CONTENTS

Board of School Directors & Administrative Staff ...... iii Summary Statement ...... iv Introduction ...... 1 Purpose of the Issue and Plan of Finance ...... 1 Sources and Uses of Funds ...... 1 Description of the Bonds ...... 2 Book-Entry Only System ...... 3 Security for the Bonds ...... 5 Redemption Provisions ...... 6 Bond Insurance ...... 7 Tax Exemption and Other Tax Matters ...... 8 Continuing Disclosure Undertaking ...... 9 Miscellaneous ...... 10

Appendix A - Summaries of Financial Factors of the School District Appendix B - School District Comprehensive Annual Financial Report 2013-14 Appendix C - Description of the School District Appendix D - Form of Bond Counsel Opinion Appendix E - Specimen of Municipal Bond Insurance Policy Appendix F - Proposed Form of Continuing Disclosure Certificate Appendix G - Bond Amortization Schedule

COLUMBIA BOROUGH SCHOOL DISTRICT

Board of School Directors

Thomas R. Strickler ...... President Kathleen Hohenadel ...... Vice President Laura E. Cowburn ...... (non-voting) Secretary Matthew Kreiser ...... Member Alysa Poindexter ...... Member Sara Ann Linkous ...... Member Quin Hartman ...... Member Cole Knighton ...... Member Janet Schwert ...... Member Vickie Anspach ...... Member

Administrative Officials

Dr. Carol Powell ...... Superintendent Laura E. Cowburn, PRSBA ...... Asst. to the Superintendent for Business Services

Treasurer

Deborah J. Weisser

Independent Auditors

Sager, Swisher and Company LLP

Bond Counsel

McNees Wallace & Nurick LLC Lancaster, Pennsylvania

Solicitor

Nikolaus & Hohenadel Columbia, Pennsylvania

Underwriter

RBC Capital Markets , LLC Lancaster, Pennsylvania

Paying Agent and Sinking Fund Depositary

Manufacturers and Traders Trust Company Harrisburg, Pennsylvania and Buffalo, New York

SUMMARY PAGE

This Summary Statement is subject in all respects to more complete information in this Official Statement. No person is authorized to detach this Summary Statement from this Official Statement or otherwise use it without the entire Official Statement. A full review of the entire Official Statement should be made by potential bond purchasers.

Issuer ...... Columbia Borough School District, Lancaster County, Pennsylvania.

Bonds ...... $9,995,000* aggregate principal amount of General Obligation Bonds, Series of 2015, dated the date of delivery, maturing or being subject to mandatory sinking fund redemption on June 1 of the years 2015 through 2027, inclusive, with interest payable initially on June 1, 2015 and thereafter semiannually on June 1 and December 1 of each year. See “DESCRIPTION OF THE BONDS” herein.

Optional Redemption ...... The Bonds stated to mature on or after ______, are subject to redemption prior to maturity at the option of the Issuer in whole or, from time to time, in part, in any order of maturities as the Issuer shall select, on any date or dates on or after ______. See “REDEMPTION PROVISIONS” herein.

Form ...... Book-Entry Only

Application of Proceeds ...... Proceeds of the Bonds will be used to provide funds to: (1) currently refund a portion of the outstanding General Obligation Bonds, Series of 2010, of the School District; and (2) pay the costs of issuing and insuring the Bonds.

Security ...... The Bonds are general obligations of the Issuer, for the payment of which the Issuer has pledged its full faith, credit and taxing power. See “SECURITY FOR THE BONDS” and “TAXING POWERS OF THE SCHOOL DISTRICT” herein.

Rating ...... See “MISCELLANEOUS - Ratings” herein.

Bond Insurance ...... The Bonds carry a municipal bond insurance commitment from ______, which assures payment of the respective principal and interest to the registered owners of the Bonds. See "BOND INSURANCE" herein.

*Preliminary, subject to change.

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

OFFICIAL STATEMENT

COLUMBIA BOROUGH SCHOOL DISTRICT Lancaster County, Pennsylvania $9,995,000* General Obligation Bonds, Series of 2015

INTRODUCTION

This Official Statement is furnished by the Columbia Borough School District (the "School District"), located in Lancaster County, Pennsylvania, in connection with the offering of its General Obligation Bonds, Series of 2015, in the aggregate principal amount of $9,995,000* (the "Bonds"). The Bonds are being issued pursuant to a Resolution adopted by the Board of School Directors of the School District on January 15, 2015 (the "Resolution"), and in accordance with the Local Government Unit Debt Act, 53 Pa.C.S. Chs. 80-82 (the "Act"). The Resolution authorized and secured up to $13,985,000 of general obligation bonds, and the Bonds represent $9,995,000* of such authorized bonds to be issued by the School District.

The Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository for the Bonds. Purchases of the Bonds can be made in book-entry only form, and purchasers will not receive certificates representing their interests in the Bonds. So long as DTC, or its nominee, Cede & Co., is the registered owner of the Bonds, payments of the principal of and interest on the Bonds will be made by the Paying Agent directly to Cede & Co. Disbursement of such payments to the DTC Participants is the responsibility of DTC, and disbursement of such payments to Beneficial Owners of the Bonds is the responsibility of the DTC Participants and the Indirect Participants. See “DESCRIPTION OF THE BONDS” and “BOOK-ENTRY ONLY SYSTEM” herein.

The information which follows contains summaries of the Resolution, relevant provisions of the laws of the Commonwealth of Pennsylvania (the “Commonwealth”) and federal law, the School District's budget and the School District's financial statements. Such summaries do not purport to be complete and reference is made to the Resolution, the School District's budget and the School District's financial statements, copies of which are on file and available for examination at the offices of the School District. Reference is also made to the Bonds and to the actual cited laws and regulations.

PURPOSE OF THE ISSUE

Proceeds of the Bonds will be used to provide funds to: (1) currently refund a portion of the outstanding General Obligation Bonds, Series of 2010 of the School District (the “Refunded 2010 Bonds”); and (2) pay the costs of issuing and insuring the Bonds.

SOURCES AND USES

SOURCES OF FUNDS 2015 Bond Issue Net Original Issue Premium TOTAL SOURCES

USES OF FUNDS Deposit to Sinking Fund for Refunded 2010 Bonds Costs of Issuance (1) TOTAL USES

(1) Includes legal, printing, rating, paying agent, CUSIP fees, Underwriter’s discount, insurance premium and miscellaneous costs.

*Preliminary, subject to change.

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DESCRIPTION OF THE BONDS

The Bonds are issued as fully registered bonds, without coupons, in the denominations of $5,000 principal amount or any integral multiple thereof. Principal and interest are payable as set forth below.

When issued, the Bonds will be registered in the name of Cede & Co., as nominee for the Depository Trust Company (“DTC”), New York, New York. Purchasers of the Bonds (the “Beneficial Owners”) will not receive any physical delivery of bond certificates and beneficial ownership of the bonds will be evidenced only by book entries. See “Book-Entry Only System” herein.

Payment of Principal and Interest

So long as Cede & Co., as nominee of DTC, is the registered owner of the Bonds, payments of principal of and interest on the Bonds, when due, are to be made to DTC and all such payments shall be valid and effective to satisfy fully and to discharge the obligations of the School District with respect to, and to the extent of, principal and interest so paid. If the use of the book-entry only system for the Bonds is discontinued for any reason, bond certificates will be issued to the Beneficial Owners of the Bonds and payment of principal and interest on the Bonds shall be made as described in the following paragraphs.

Principal of certificated Bonds will be paid to the registered owners thereof or assigns, when due, upon surrender of such Bonds at the designated corporate trust office of the Paying Agent. Interest is payable to the registered owner of a Bond from the interest payment date next preceding the date of registration and authentication of the Bond, unless: (a) such Bond is registered and authenticated as of an interest payment date, in which event such Bond shall bear interest from said interest payment date, or (b) such Bond is registered and authenticated after a Record Date (hereinafter defined) and before the next succeeding interest payment date, in which event such Bond shall bear interest from such interest payment date, or (c) such Bond is registered and authenticated on or prior to June 1, 2015, in which event such Bond shall bear interest from the date of delivery, or (d) as shown by the records of the Paying Agent, interest on such Bond shall be in default, in which event such Bond shall bear interest from the date on which interest was last paid on such Bond. Interest shall be paid semiannually on June 1 and December 1 of each year, beginning June 1, 2015, until the principal sum is paid. Interest on each Bond is payable by check drawn on the Paying Agent, which shall be mailed to the registered owner whose name and address shall appear, at the close of business on the fifteenth (15th) day (whether or not a day on which the Paying Agent is open for business) next preceding each interest payment date, respectively (the "Record Date"), on the registration books maintained by the Paying Agent, irrespective of any transfer or exchange of the Bond subsequent to such Record Date and prior to such interest payment date, unless the School District shall be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name the Bond is registered at the close of business on a special record date for the payment of such defaulted interest established by notice mailed by the Paying Agent to the registered owners of Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names the Bonds are registered at the close of business on the fifth (5th) day preceding the date of mailing.

If the date for the payment of the principal of or interest on any Bonds shall be a Saturday, Sunday, legal holiday or on a day on which banking institutions in the Commonwealth are authorized or required by law or executive order to close, then the date for payment of such principal or interest shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized or required to close, and payment on such date shall have the same force and effect as if made on the nominal date established for such payment.

Transfer, Exchange and Registration of Bonds

Subject to the provisions described below under “Book-Entry Only System”, each of the bonds may be transferred or exchanged by the registered owners thereof upon surrender of Bonds to the Paying Agent, at its corporate trust office, accompanied by a written instrument or instruments in form, with instructions satisfactory to the Paying Agent, duly executed by the registered owner of such Bond or his attorney-in-fact or legal representative. The Paying Agent shall enter any transfer of ownership of such Bonds in the registration books and shall authenticate and deliver at the earliest practicable time in the name of the transferee or transferees a new fully registered bond or bonds of authorized denominations of the same series, maturity date and interest rate for the aggregate principal amount which the registered owner is entitled to receive. The School District and the Paying Agent may deem and treat the registered owner of such Bond as the absolute owner thereof (whether or not a

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Bond shall be overdue) for the purpose of receiving payment of or on account of principal and interest and for all other purposes, and the School District and the Paying Agent shall not be affected by any notice to the contrary.

Bonds may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same series, maturity date and interest rate. The Paying Agent shall not be required to (i) issue or to register the transfer of or exchange any certificated Bond then considered for redemption during a period beginning at the close of business on the first (1st) day next preceding any date of selection of such Bond to be redeemed and ending at the close of business on the day on which the applicable notice of redemption is given, or (ii) to register the transfer or exchange any portion of any certificated Bond selected for redemption, in whole or in part, until after the date fixed for redemption.

BOOK-ENTRY ONLY SYSTEM

The information under this heading has been obtained from materials provided by DTC for such purpose. The School District and RBC Capital Markets, LLC (herein referred to as the “Underwriter”) do not guaranty the accuracy or completeness of such information and such information is not to be construed as a representation of the School District or the Underwriter.

DTC, New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully- registered bonds registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for the Bonds of each separate maturity and interest rate, in the aggregate principal amount of such maturity and interest rate, and will be deposited with DTC. DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 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 registered 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: AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Series of 2015 Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial

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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. Redemption notices will be sent to DTC. If less than all of the Bonds of a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the School 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments of principal, premium, if any, and interest on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the School District or the Paying 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 securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the School District or the Paying Agent, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments of principal, premium, if any, and interest on the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the School District or the Paying 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 Bonds at any time by giving reasonable notice to the School District or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, bond certificates are required to be printed and delivered. The School District may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that School District believes to be reliable, but School District takes no responsibility for the accuracy thereof.

Disclaimer of Liability for Failures of DTC

The School District and the Underwriter cannot and do not give any assurances that DTC, the Direct and Indirect Participants or others will distribute payments of principal, interest or premium with respect to the Bonds paid to DTC or its nominee as the owner of Bonds, or will distribute any redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. The School District and the Underwriter are not responsible or liable for the failure of DTC or any Participant to make any payment or give any notice to a Beneficial Owner with respect to the Bonds, or any error or delay relating thereto.

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SECURITY FOR THE BONDS

The Bonds are general obligations of the School District and are payable from the general taxes and revenues of the School District. The taxing powers of the School District are described more fully herein. The School District has covenanted in the Resolution that it (i) shall include the amount of the debt service to be paid on the Bonds, for each fiscal year of the School District in which such sums are payable, in its budget for that fiscal year, (ii) shall appropriate such amounts from its general revenues for the payment of such debt service, and (iii) shall duly and punctually pay, or cause to be paid from its Sinking Fund (hereinafter defined) or any other of its revenues or funds, the principal of each of the Bonds and the interest thereon on the dates, at the place and in the manner stated in the Bonds, and for such budgeting, appropriation and payment, the School District has irrevocably pledged its full faith, credit and taxing power.

Sinking Fund

In the Resolution, the School District has created a sinking fund for the Bonds (the "Sinking Fund"), to be maintained with the Paying Agent (the "Sinking Fund Depositary"), and segregated from all other funds of the School District. The School District shall deposit in the Sinking Fund a sufficient sum not later than the date when principal or interest is due on the Bonds so that on each payment date the Sinking Fund will contain an amount which, together with any other available funds therein, is sufficient to pay, in full, interest and principal then due on the Bonds.

The Sinking Fund shall be held by the Paying Agent, as sinking fund depositary, and invested by the Paying Agent in such securities or shall be deposited in such funds or accounts as are authorized by the Act, upon direction of the School District. Such deposits and securities shall be in the name of the School District, but subject to withdrawal or collection only by the Paying Agent, as sinking fund depositary, and such deposits and securities, together with the interest thereon, shall be a part of the Sinking Fund.

The Paying Agent, as sinking fund depositary, is authorized without further order from the School District to pay from the Sinking Fund the principal of and interest on the Bonds when due and payable.

Actions in the Event of Default

Subject to the exclusive representation of bondholders by a trustee appointed under the Act as described in the following paragraph, if the School District fails or neglects to pay principal or interest on any of the Bonds as it becomes due and payable, and such failure continues for thirty days, the holder of such bond may bring suit in a court of appropriate jurisdiction and venue and any judgment recovered shall have an appropriate priority upon the money next coming into the treasury of the School District, all as provided in the Act. The Act also provides other remedies to bondholders to enforce the School District's covenants in respect of payment of the Bonds.

In the event the School District defaults in the payment of the principal of or the interest on any of the Bonds after same shall become due, whether at the stated maturity or upon call for prior redemption, and such default shall continue for thirty days, or if the School District fails to comply with any provision of the Bonds or the Resolution, the Act provides that the holders of 25% in aggregate principal amount of the Bonds then outstanding may, upon appropriate action, appoint a trustee to represent the Bondholders. The trustee may, and upon request of the holders of 25% in principal amount of the Bonds then outstanding, and upon being provided with indemnity satisfactory to it, shall take such action on behalf of the Bondholders as is more specifically set forth in the Act. Such representation by the trustee shall be exclusive.

Security for General Obligation Bonds Under Section 633 of the Public School Code of 1949

Section 633 of the Public School Code of 1949, as amended by Act 154 of 1998 (the "Public School Code") presently provides that if any school district fails to pay or to provide for the payment of any indebtedness, at the date of maturity or mandatory redemption, or any interest due on such indebtedness, in accordance with the schedule under which the bonds or notes were issued, the Secretary of Education of the Commonwealth shall notify the board of school directors of its obligation and shall withhold from any Commonwealth appropriation due such school district an amount equal to the sum of such principal or interest due and shall pay such amount directly to the bank acting as sinking fund depositary for the bond issue.

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The withholding provisions of Section 633 are not part of any contract with the registered owners of the Bonds and may be amended or repealed by future legislation. The effectiveness of Section 633 may be limited by the application of other withholding provisions contained in the Public School Code, such as provisions for withholding and paying over of appropriations for payment of unpaid teachers' salaries. Enforcement may also be limited by bankruptcy, insolvency, or other laws or equitable principles affecting the enforcement of creditors' rights generally.

REDEMPTION PROVISIONS

Optional Redemption

The Bonds stated to mature on or after ______- are subject to redemption prior to maturity at the option of the School District in whole or, from time to time, in part, in any order of maturities as the School District shall select, on any date or dates on or after ______, at a price equal to 100% of the principal amount of the Bonds to be redeemed plus accrued interest thereon to the date fixed for such optional redemption. In the event that less than all Bonds of a particular maturity are to be redeemed, the Bonds of such maturity shall be drawn by lot by the Paying Agent; provided, however, that while the Bonds are held under the book-entry only system of DTC, the selection of Bonds within a maturity to be redeemed shall be accomplished in accordance with the operating rules and practices of DTC.

Notice of Redemption So long as Cede & Co., as nominee of DTC, is the registered owner of the Bonds, however, the School District and the Paying Agent shall send redemption notices only to Cede & Co. See “BOOK-ENTRY ONLY SYSTEM” herein for further information regarding conveyance of notices and Beneficial Owners. If at a time of mailing of a notice of redemption the School District has not deposited with the Paying Agent (or, in the case of a refunding, with another bank or depositary acting as refunding escrow agent) money sufficient to redeem all Bonds called for redemption, the notice of redemption may state that is it is conditional, i.e., that it is subject to the deposit of sufficient redemption money with the Paying Agent not later than the opening of business on the redemption date, and such notice shall be of no effect unless such money is so deposited. Notice of any redemption shall be given by depositing a copy of the redemption notice in first class mail not less than thirty (30) days prior to the date fixed for redemption, addressed to each of the registered owners of any certificated Bonds to be redeemed, at the addresses shown on the registration books kept by the Paying Agent as of the date such Bonds are selected for redemption; provided, however, that failure to give such notice by mailing, or any defect therein or in the mailing thereof, shall not affect the validity of any proceeding for redemption of other Bonds so called for redemption as to which proper notice has been given. On the date designated for redemption, notice having been provided as aforesaid, and money for payment of the principal and interest being held by the Paying Agent, interest on the Bonds or portions thereof so called for redemption shall cease to accrue and such Bonds or portions thereof shall cease to be entitled to any benefit or security under the Resolution, and registered owners of such Bonds or portions thereof so called for redemption shall have no rights with respect thereto, except to receive payment of the principal to be redeemed and accrued interest thereon to the date fixed for redemption.

Manner of Redemption

While Cede & Co., as nominee of DTC, is the registered owner of the Bonds, however, payment of the redemption price shall be made by Cede & Co. in accordance with the existing arrangements by and among the School District, the Paying Agent and DTC and, if less than all of the Bonds in a particular maturity are to be redeemed, the amount of the interest of each DTC Participant, Indirect Participant and Beneficial Owner on such Bonds to be redeemed shall be determined by the governing arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. See “BOOK-ENTRY ONLY SYSTEM” herein for further information regarding redemption of Bonds registered in the name of Cede & Co.

If a Bond is of a denomination larger than $5,000, a portion of such Bond may be redeemed. For the purposes of redemption, a Bond shall be treated as representing the number of Bonds that is equal to the principal amount thereof divided by $5,000, each $5,000 portion of such Bond being subject to redemption. In the case of partial redemption of a certificated

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Bond, payment of the redemption price shall be made only upon surrender of such Bond in exchange for certificated Bonds of authorized denominations in an aggregate principal amount equal to the unredeemed portion of the principal amount thereof.

If the redemption date for any Bonds shall be a Saturday, Sunday, legal holiday or on a day on which banking institutions in the Commonwealth are authorized or required by law or executive order to close, then the date for payment of such principal, premium, if any, and interest upon such redemption shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized or required to close, and payment on such date shall have the same force and effect as if made on the nominal date of redemption.

BOND INSURANCE

[Bond Insurance Language]

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TAX EXEMPTION AND OTHER TAX MATTERS

Federal Tax Exemption

In the opinion of Bond Counsel, under existing statutes, regulations, rulings and court decisions, and assuming continuing compliance by the School District with certain certifications and agreements relating to the use of the Bond proceeds and covenants to comply with provisions of the Internal Revenue Code of 1986, as amended (the "Code") and all applicable regulations thereunder, now or hereafter enacted, interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. However, such interest is includable in adjusted current earnings for purposes of the federal alternative minimum tax imposed on certain corporations (as defined in the Code). Bond counsel expresses no opinion regarding other federal tax consequences of ownership or disposition of, or the accrual or receipt of interest on, the Bonds.

The Bonds maturing on ______, are offered at a discount ("original issue discount") equal generally to the difference between public offering price and principal amount. For federal income tax purposes, original issue discount on a Bond accrues periodically over the term of the Bond as interest with the same tax exemption and alternative minimum tax status as regular interest. The accrual of original issue discount increases the holder's tax basis in the Bond for determining taxable gain or loss from sale or from redemption prior to maturity. Holders should consult their tax advisers for an explanation of the accrual rules.

The Bonds maturing on ______, are offered at a premium ("original issue premium") over their principal amount. For federal income tax purposes, original issue premium is amortizable periodically over the term of a Bond through reductions in the holder's tax basis for the Bond for determining taxable gain or loss from sale or from redemption prior to maturity. Amortization of premium does not create a deductible expense or loss. Holders should consult their tax advisers for an explanation of the amortization rules.

The School District has designated the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. A financial institution purchasing or holding the Bonds should consult its professional tax advisors to determine the effect of the interest expense disallowance related to tax-exempt bonds upon its federal income tax liability.

The opinion of Bond Counsel on federal tax matters will be based upon and will assume the accuracy of certain representations and certifications, and compliance with certain covenants, of the School District to be contained in the transcript of proceedings for the issuance of the Bonds and that are intended to evidence and assure that the Bonds are and will remain obligations the interest on which is excludable from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of those certifications and representations or covenants.

The Code prescribes a number of qualifications and conditions for the interest on state and local obligations to be and to remain excludable from gross income for federal income purposes, some of which require future or continued compliance after issuance of the obligations in order for the interest to be and to continue to be so excluded from the date of issuance. Noncompliance with these requirements by the School District may cause the interest on the Bonds to be included in gross income for federal income tax purposes and thus to be subject to federal income tax retroactively to their date of issuance. The School District has covenanted to take the actions required of it for the interest on the Bonds to be and to remain excludable from gross income for federal income tax purposes and not to take any actions that would adversely affect that exclusion. Bond Counsel has not undertaken to evaluate, determine or inform any person, including any holder of the Bonds, whether any actions taken or not taken, events, events occurring or not occurring, or other matters that might come to attention of Bond Counsel, would adversely affect the value of, or tax status of the interest on, the Bonds.

Under the provisions of the Code, the Treasury Department is authorized and empowered to promulgate regulations implementing the intent of Congress under the Code which could affect the tax exemption and/or tax consequences of holding tax-exempt obligations, such as the Bonds. In addition, legislation may be introduced and enacted in the future which could change the provisions of the Code relating to the tax exempt bonds of a state or local government unit, such as the School District, or the taxability of interest in general.

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Proposals to alter or eliminate the exclusion of interest on tax-exempt bonds from gross income for some or all taxpayers have been made in the past and may be made again in the future. Future legislation, if enacted into law, or clarification of the Code may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such future legislation or clarification of the Code may also affect the market price for, or marketability of, the Bonds. PROSPECTIVE PURCHASERS OF THE BONDS SHOULD CONSULT THEIR OWN TAX ADVISERS REGARDING ANY PROPOSED FEDERAL TAX LEGISLATION, AS TO WHICH BOND COUNSEL EXPRESSES NO OPINION.

The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities and represents Bond Counsel's judgment as to the proper treatment of the Bonds for federal income tax purposes. It is not a guarantee of any result, and is not binding on the Internal Revenue Service (the “IRS”) or the courts.

Bond Counsel's engagement with respect to the Bonds ends with the issuance of the Bonds.

No representation is made or can be made by the School District or any other party associated with the issuance of the Bonds as to whether or not any other legislation now or hereafter introduced and enacted will be applied retroactively so as to subject interest on the Bonds to federal income taxes or so as to otherwise affect the marketability or market value of the Bonds.

Pennsylvania Tax Exemption

Under the laws of the Commonwealth as presently enacted and construed, the Bonds are exempt from personal property taxes in the Commonwealth and the interest on the Bonds is exempt from Pennsylvania personal income tax and Pennsylvania corporate net income tax.

The Bonds and the interest thereon may be subject to state or local taxes in jurisdictions other than the Commonwealth under applicable state or local tax laws.

THE ABOVE SUMMARY OF POSSIBLE TAX CONSEQUENCES IS NOT EXHAUSTIVE OR COMPLETE. ALL PURCHASERS OF BONDS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE POSSIBLE FEDERAL, STATE AND LOCAL INCOME TAX CONSEQUENCES OF OWNERSHIP OF THE BONDS AND ANY CHANGES IN THE STATUS OF PENDING OR PROPOSED FEDERAL TAX LEGISLATION. ANY STATEMENT REGARDING TAX MATTERS HEREIN CANNOT BE RELIED UPON BY ANY PERSON TO AVOID TAX PENALTIES.

CONTINUING DISCLOSURE UNDERTAKING In accordance with the requirements of Rule 15c-12 (the “Rule”) promulgated by the Securities and Exchange Commission (“SEC”), and the Resolution, adopted January 15, 2015 authorizing issuance of the Bonds, the School District will execute and deliver a written continuing disclosure obligation with respect to the Bonds. See the form of the Continuing Disclosure Agreement (the “Agreement”) at Appendix E to this Official Statement.

Under the terms of the Agreement, and as reflected in Appendix F, the School District will undertake to file with the MSRB financial and other information concerning the School District (annual audited financial statements and notice of certain events affecting the School District). The School District’s obligations with respect to continuing disclosure relative to the Bonds shall terminate upon the prior redemption or payment in full of all of the Bonds.

The MSRB has been designated by the SEC to be the central and sole repository for continuing disclosure information filed by issuers of municipal securities since July 1, 2009. Information and notices filed by municipal issuers (and other “obligated persons” with respect to municipal securities issues) are made available through the MSRB’s Electronic Municipal Market Access (EMMA) System, which may be accessed on the internet at http://www.emma.msrb.org

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MISCELLANEOUS

No Litigation

As a condition of settlement for the Bonds, the School District and its Solicitor will deliver a certificate stating that there is no litigation, of any nature, pending or threatened against the School District to restrain or enjoin the issuance, sale, execution or delivery of the Bonds, or if any such litigation is pending or threatened, an opinion of counsel satisfactory to the Underwriter that any such litigation is without merit.

Legal Opinion

The issuance and delivery of the Bonds is subject to delivery of the unqualified approving legal opinion of McNees Wallace & Nurick LLC, Lancaster, Pennsylvania, Bond Counsel to the School District. Certain legal matters will be passed upon for the School District by Nikolaus & Hohenadel, Columbia, Pennsylvania, Solicitor to the School District.

Rating

Standard & Poor’s Corp. (“S&P”) is expected to assign their municipal bond rating to this issue of Bonds with the understanding that upon delivery of the Bonds, a municipal bond insurance policy insuring the payment when due of the principal of and interest on the Bonds will be issued by ______. Currently, ______financial strength is rated “AA” (Stable Outlook) by S&P. S&P has assigned the Issuer an underlying rating of “A+” (Stable Outlook).

The above ratings are not recommendations to buy, sell or hold the Bonds, and such ratings may be subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market price of the Bonds.

Underwriting

RBC Capital Markets, LLC (the “Underwriter”) has agreed, subject to certain conditions, to purchase the Bonds from the School District at an aggregate price of $______. The Underwriters' obligations are subject to certain conditions precedent, however, the Underwriters will be obligated to purchase all such Bonds if any such Bonds are purchased. The Bonds may be offered and sold to certain dealers (including dealers depositing such bonds into investment trusts) at prices lower than such public offering prices, and such public offering prices may be changed, from time to time, by the Underwriters.

Bond Insurance Risk Factors

In the event of default of the payment of principal or interest with respect to the Bonds when all or some becomes due, any owner of the Bonds shall have a claim under the applicable bond insurance policy (the “Policy”) for such payments. However, in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments are to be made in such amounts and at such times as such payments would have been due had there not been any such acceleration. The Policy does not insure against redemption premium, if any. The payment of principal and interest in connection with mandatory or optional prepayment of the Bonds by the issuer which is recovered by the issuer from the bond owner as a voidable preference under applicable bankruptcy law is covered by the Policy, however, such payments will be made by the Insurer at such time and in such amounts as would have been due absence such prepayment by the Issuer unless the bond insurer chooses to pay such amounts at an earlier date.

Under most circumstances, default of payment of principal and interest does not obligate acceleration of the obligations of the bond insurer without appropriate consent. The bond insurer may direct and must consent to any remedies that the Paying Agent exercises and the bond insurer’s consent may be required in connection with amendments to the applicable Agreements or Resolution.

In the event the bond insurer is unable to make payment of principal and interest as such payments become due under the Policy, the Bonds are payable solely from the moneys received by the Paying Agent pursuant to the applicable Agreements. In the event the bond insurer becomes obligated to make payments with respect to the Bonds, no assurance is given that such event will not adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds.

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The long-term ratings on the Bonds are dependent in part on the financial strength of the bond insurer and its claim paying ability. The bond insurer’s financial strength and claims paying ability are predicated upon a number of factors which could change over time. No assurance is given that the long-term ratings of the bond insurer and of the ratings on the Bonds insured by the bond insurer will not be subject to downgrade and such event could adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds. See description of RATING herein.

The obligations of the bond insurer are general obligations of the bond insurer and in an event of default by the bond insurer, the remedies available to the Paying Agent may be limited by applicable bankruptcy law or other similar laws related to insolvency.

Neither the Issuer or Underwriter have made independent investigation into the claims paying ability of the bond insurer and no assurance or representation regarding the financial strength or projected financial strength of the bond insurer is given.

Other

All references to the provisions of the Act, the Bonds, the Resolution and legal opinions and all documents and certificates delivered at settlement for the Bonds described in this Official Statement are made subject to all the specific provisions thereof, to which reference is hereby made for further information, and this Official Statement does not purport to be a complete statement of any or all such provisions.

All information, estimates and assumptions herein have been obtained from officials of the School District, other governmental bodies, trade and statistical services, and other sources which are believed to be reliable; but no representations whatsoever are made that such estimates or assumptions are correct or will be realized. So far as any statements herein involve matters of opinion, whether or not expressly so stated, they are intended as such and not representations of fact.

Use of the words “shall,” “will,” “must,” or other words of similar import or meaning in summaries of documents or law in this Official Statement to describe future events of continuing obligations is not intended as a representation that such event will occur or such obligations will be fulfilled, but only that the document or law requires or contemplates such event to occur or such obligation to be fulfilled.

The School District has authorized the distribution of this Official Statement.

COLUMBIA BOROUGH SCHOOL DISTRICT Lancaster County, Pennsylvania

By: President of the Board of School Directors

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APPENDIX A

Summaries of Finances of The School District

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FINANCIAL REVIEW

The following Exhibits on page A-3 and A-4 are summaries only and are not intended to be a complete report. For more complete information, the individual financial statements and the fiscal year 2014-15 Budget of the School District should be reviewed at the Business Office, Columbia Borough School District, Columbia, Pennsylvania.

Audited Financial Statements for Fiscal Years 2010-11 through 2013-14 and 2014-15Budget

The exhibits on pages A-3 and A-4 are summaries of the School District's General Fund Financial Condition for Fiscal Years ending June 30, 2011 through 2015. The figures have been arranged in a form believed to be convenient for the purposes of this Official Statement.

Accounting Method The financial statements of the School District are prepared in accordance with accounting principles generally accepted in the United States of America. The School District's reporting entity applies all relevant Governmental Accounting Standards Board (GASB) pronouncements. The government-wide and proprietary fund financial statements apply Financial Accounting Standards Board pronouncements and Accounting Principles Board opinions issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements, in which case, GASB prevails. The government wide statements report using the economic resources measurement focus and the accrual basis of accounting generally including the reclassification or elimination of internal activity (between or within funds).

The School District keeps its books and prepares its financial reports according to a modified accrual basis. Major accrual items are payroll, taxes and pension fund contributions payable, delinquent taxes receivable, loans receivable from other funds, and revenues receivable from other governmental units. The School District's financial statements are audited annually by a firm of independent certified public accountants, as required by Commonwealth law. The firm of Sager, Swisher & Company, LLP, Columbia, Pennsylvania serves as School District auditor.

Budgeting Process in School Districts under the Taxpayer Relief Act.

In General. School districts budget and expend funds according to procedures mandated by the Pennsylvania Department of Education. An annual operating budget is prepared by school district administrative officials on a uniform form furnished by such Department and submitted to the board of school directors for approval prior to the beginning of the fiscal year on July 1.

Procedures for Adoption of the Annual Budget. Under the Taxpayer Relief Act, all school districts of the first class, second class, third class and fourth class (except as described below) must adopt a preliminary budget proposal (which must include estimated revenues and expenditures and proposed tax rates) no later than 90 days prior to the date of the election immediately preceding the fiscal year. The preliminary budget proposal must be printed and made available for public inspection at least 20 days prior to its adoption; the board of school directors may hold a public hearing on the budget; and the board must give at least 10 days’ public notice of its intent to adopt the final budget.

If the adopted preliminary budget includes an increase in the rate of any tax levy, the preliminary budget must be submitted to the Pennsylvania Department of Education (PDE) no later than 85 days prior to the date of the election immediately preceding the fiscal year. PDE is to compare the proposed percentage increase in the rate of any tax with the school district’s Index (see “Taxpayer Relief Act” herein) and within 10 days, but not later than 75 days prior to the upcoming election, inform the school district whether the proposed percentage increase is less than or equal to the Index. If PDE determines that a proposed tax increase will exceed the Index, the school district must reduce the proposed tax increase, seek voter approval for the tax increase at the upcoming election, or seek approval to utilize one of the referendum exceptions authorized under Taxpayer Relief Act.

With respect to the utilization of any of the Taxpayer Relief Act referendum exceptions for which PDE approval is required, the school district must publish notice of its intent to seek PDE approval not less than one week before submitting its request for approval to PDE and, if PDE determines to schedule a public hearing on the request, a notice of the date, time and place of such hearing. PDE is required by Taxpayer Relief Act to rule on the school district’s request and inform the school district of its decision no later than 55 days prior to the upcoming election so that, if PDE denies the school district’s request, the

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school district may submit a referendum question to the local election officials at least 50 days before the upcoming election, if it so chooses.

To use any of the referendum exceptions for which court approval is required under the Taxpayer Relief Act, the school district must petition the court of common pleas no later than 75 days prior to the upcoming election, after giving one week’s public notice of the intent to file such petition. The court may schedule a hearing on the petition, and the school district must prove by clear and convincing evidence that it qualifies for the exception sought. The Taxpayer Relief Act requires that the court rule on the petition and inform the school district of its decision no later than 55 days prior to the upcoming election. Taxpayer Relief Act provides that the court in approving the petition shall determine the dollar amount for which the exception is granted, the tax rate increase required to fund the exception and the appropriate duration of the tax increase. If the court denies the school district’s petition, such Act permits the school district to submit a referendum question to the local election officials at least 50 days before the upcoming election, if it so chooses.

If a school district seeks voter approval to increase taxes at a rate higher than the applicable Index, whether or not it first seeks approval to utilize one of the referendum exceptions available under the Taxpayer Relief Act, and the referendum question is not approved by a majority of the voters voting on the question, the board of school directors may not approve an increase in the tax rate greater than the applicable Index.

Simplified Procedures in Certain Cases. The above budgetary procedures will not apply to a school district if the board of school directors adopts a resolution no later than 110 days prior to the election immediately preceding the upcoming fiscal year declaring that it will not increase any tax at a rate that exceeds the Index and that a tax increase at or below the rate of the Index will be sufficient to balance its budget. In that case, the Taxpayer Relief Act requires only that the proposed annual budget be prepared at least 30 days, and made available for public inspection at least 20 days, prior to its adoption, and that at least ten (10) days’ public notice be given of the board’s intent to adopt the annual budget. No referendum exceptions are available to a school district adopting such a resolution.

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COLUMBIA BOROUGH SCHOOL DISTRICT Comparative Statement of General Fund Financial Condition for Fiscal Years Ending 2011-2015

Fiscal Year Ended June 30, Budget 2011 2012 2013 2014 2015 REVENUE:

Local Sources ...... $10,032,883 $9,968,865 $10,035,384 10,345,783 10,494,865 State Sources ...... 9,220,045 9,647,891 9,811,222 10,243,894 10,547,779 Federal Sources ...... 2,030,036 653,450 818,610 641,121 679,961 Other Sources ...... 2,901 0 367 0 0

TOTAL REVENUE ...... 21,285,865 20,270,206 20,665,583 21,230,798 21,722,605

EXPENDITURES:

Instruction ...... 12,247,892 12,366,589 12,823,747 13,503,600 13,509,062 Support Services ...... 5,538,908 5,201,891 5,160,827 5,327,315 5,263,722 Non-instructional Services ...... 486,488 442,140 450,647 457,091 505,380 Facilities, Acquisition & Improvements ... 0 0 0 0 0 Other ...... Debt Service ...... 0 0 0 0 0 Refund of Prior Year Receipts ...... 896 0 0 0 0 Fund Transfers ...... 2,733,289 2,603,663 2,711,817 2,660,982 2,637,938 Budgetary Reserve ...... 0 0 0 0 450,000

TOTAL EXPENDITURES ...... 21,007,473 20,614,283 21,147,038 21,948,988 22,366,102

SURPLUS (DEFICIT)OF REVENUES OVER EXPENDITURES ...... 278,392 (344,077) (481,455) (718,190) (643,497)

FUND BALANCE, BEGINNING OF YEAR 3,383,035 (1) 3,661,427 3,317,350 $2,835,895 $2,117,705

FUND BALANCE, END OF YEAR ...... $ 3,661,427 $ 3,317,350 $ 2,835,895 $2,117,705 $1,474,208 ______Source: School District

(1.) Restated

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REVENUE FROM COMMONWEALTH SOURCES

School districts in the Commonwealth receive, annually, financial assistance from the Pennsylvania Department of Education. The amount of such assistance is based upon (i) the market value of real estate per weighted average daily membership, (ii) income per weighted average daily membership and (iii) the school district's tax effort, all as compared with such figures on a state-wide basis. The basic instructional subsidy received by a School District is calculated by multiplying the number of students in weighted average daily membership by the District's Market Value/Personal Income Aid Ratio and by the factor for educational expense.

Rental and sinking fund reimbursement from the Commonwealth for school projects is determined by the "Reimbursable Percentage" assigned to the school building project and by the school district's "Market Value Aid Ratio" or "Capital Account Reimbursement Factor" ("CARF") whichever is higher. The School District's MVAR is currently higher at .7307. Most school building projects in Pennsylvania are eligible for Commonwealth reimbursement. Certain school building projects, such as school administration buildings and vehicle maintenance buildings, are ineligible for reimbursement. A reimbursable percentage, based upon the rated pupil capacity of the new or renovated structure and certain other costs, is assigned to the building project. This reimbursement percentage multiplied by the School District’s appropriate Aid Ratio determines the Commonwealth's share of the annual lease rental or debt service for that school year.

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SCHOOL DISTRICT PENSION PROGRAM School Districts in Pennsylvania are required to participate in a statewide pension program administered by the Public School Employees Retirement System (PSERS). All of the School District’s full-time employees, part time employees who work more than 80 days in a school year, and hourly employees who work over 500 hours a year participate in the program. However, please note a Pennsylvania Supreme Court decision has removed the hourly de minimis requirement for current members of PSERS regarding the purchase of credit for their part-time school service rendered prior to their being members of PSERS, for purposes of increasing their pension benefits.

Beginning July 1, 1976, certain revisions were made in the pension program. The Retirement Board, previously under the Department of Education of the Commonwealth, became an independent agency. However, the program is still guaranteed by the Commonwealth. Currently, each party to the program contributes a fixed percentage of the employee’s salary. Employees belonging to the Public School Employees Retirement System (“PSERS”) prior to July 22, 1983 contribute 5.25% of their salary, and employees who joined the PSERS on or after July 22, 1983 contribute 6.25% of their salary. On February 17, 2002, Governor Ridge signed Act 9 which created a new membership class that sets the employee contribution rate at 7.50% of the employee’s salary for those employees hired on or after July 1, 2001. Act 9 also provides an option for those employees hired prior to July 1, 2001 to elect a contribution rate of 6.50%, if they were hired before July 22, 1983, or 7.50% if they were hired on or after July 22, 1983. Act 120 of 2010 was passed by the General Assembly on November 15 and signed by Governor Rendell on November 23, 2010. The benefit reductions contained in this legislation will only impact individuals who become new members of PSERS on or after July 1, 2011. New members will have the option of selecting one of 2 new classes. The members selecting class T-E will contribute a base rate of 7.5% with “shared risk” contribution levels between 7.5% and 9.5% and a pension multiplier of 2.0%. Members selecting class T-F will contribute a base rate of 10.3% with shared risk contribution levels between 10.3% and 12.3% and a pension multiplier or 2.5%. The PSERS Board certified a new employer rate, to be paid by the School District, of 21.40% for the 2014-15 fiscal year. On December 9, 2014, the PSERS Board certified the employer rate, to be paid by the School District, of 25.84% for the 2015-16 fiscal year. According to Act 120 of 2010 the employer contribution rate is suppressed for future years by using rate caps to keep the rate from rising too high, too fast. Both the School District and the Commonwealth are responsible for paying a portion of the employer’s share. School entities are responsible for paying 100% of the employer share of contributions to PSERS. The Commonwealth reimburses the employer for one-half the payment for employees. The School District contributions are made on a quarterly basis and employee contributions are deducted bi-weekly for each paycheck and remitted quarterly. Recent School District payments, net of reimbursement, have been as follows: School District Fiscal Year Contribution 2008-09 $ 198,896 2009-10 427,610 2010-11 519,349 2011-12 703,377 2012-13 957,450 2013-14 1,347,867 2014-15 (Budgeted) 1,744,738

The School District is current in all payments.

PSERS is primarily responsible for administering a defined benefit pension plan for public school employees in the Commonwealth of Pennsylvania. In the fall of 2014, the PSERS completed its process of publishing financial statements for the year ended June 30, 2014, in compliance with reporting standards established by the Government Accounting Standards Board’s Statement No. 25 and Statement No. 26. PSERS’ rate of return for fiscal year ended June 30, 2014 was 14.91%, which added approximately $7.1 billion (net of fees) in investment income to the Fund. The Fund had plan net assets of $53.3 billion at June 30, 2014. PSERS’ investment outperformance well above its annual return assumption of 7.5% also helped decrease the unfunded accrued liability. The Fund’s complete report is available on the PSERS website on the Internet: www.psers.state.pa.us.

Source: PSERS Website.

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OTHER POST-EMPLOYMENT BENEFITS

The School District provides certain health care and life insurance benefits for its retirees (commonly referred to as “other post-employment benefits” or “OPEB”). The School District annually appropriates funds to meet its obligation to pay such benefits on a “pay-as-you-go” basis, and has not established any fund or irrevocable trust for the accumulation of assets with which to pay such benefits in future years.

In preparation for such reporting, the School District has retained a consulting firm, Conrad Siegel Actuaries, to provide valuation services to measure its OPEB liabilities for future years. Pursuant to Governmental Accounting Standards Board Statement No. 45, released on June 1, 2004, the School District’s audited financial statements reflect the Annual Required Contribution (ARC) net of contributions. As of June 30, 2014, the district reflected $394,804 on the financial statements. No assurances can be given that the District’s future OPEB obligations will not have a material impact on the District’s ability to pay its debts, including the Bonds.

LABOR RELATIONS

The professional employees of the School District are represented in collective bargaining by the Columbia Borough Education Association. The School District's present contract with the Association expired on June 30, 2014. There are presently 190 employees of the School District, including 102 teachers and administrators, and 63 support personnel including secretaries, maintenance staff, food service workers and teacher aides.

SCHOOL DISTRICT FINANCIAL HISTORY

The School District and its predecessors have never defaulted on the payment of lease rentals or debt service.

The status of the School District's present indebtedness is shown in the table entitled "Current Long-Term School Financing," in Appendix A.

FUTURE FINANCING

The Board of School Directors has no major capital projects are planned at this time.

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DEBT STATEMENT AND BORROWING CAPACITY (Under Local Government Unit Debt Act)

The borrowing capacity of the School District is calculated in accordance with provisions of the Act, which describes the applicable debt limits for local government units, including school districts and municipalities. Under the Act, the School District may incur electoral debt, which is debt that is approved by a majority of the School District's voters at either a general or special election, in an unlimited amount. Net nonelectoral debt, or debt not approved by the School District's electorate, net of state aid, may not exceed 225% of the School District's "Borrowing Base". The Borrowing Base is calculated as the annual arithmetic average of Total Revenues (as defined in the Act), for the three full fiscal years next preceding the date of incurring debt. Combined net nonelectoral debt and net lease rental debt (debt represented by capital leases and other forms of agreement net of state aid), incurred on behalf of the School District may not exceed 225% of the School District's Borrowing Base. The Borrowing Base and borrowing capacity of the School District are as follows:

Calculation of Borrowing Base

2011-12 2012-13 2013-14

Total Revenues ...... 20,270,206 20,665,582 21,230,798 Less: Required Deductions (a) Rental and Sinking Fund Reimbursement ...... 722,827 720,197 731,106 (b) Revenues for Self-Liquidating Debt ...... 0 0 0 (c) Interest Earned on Sinking Funds ...... 0 0 0 (d) Grant and Gifts for Capital Projects ...... 0 0 0 (e) Sale of Equipment and Non-Recurring Items ...... 0 0 0 Total Deductions ...... 722,827 720,197 731,106 Total Revenues ...... 19,547,379 19,945,385 20,499,692 Total Net Revenues for Three Years ...... $ 59,992,456 Borrowing Base–Average Net Revenues for Three-Year Period $ 19,997,485 ______Source: School District Officials.

Calculation of Borrowing Capacity

A. Electoral Debt ...... $ 0

B. Non-Electoral Debt

Computation of Net Non-Electoral Debt (a) Outstanding Principal (1) ...... $ 26,865,000 (b) Less: Subsidized Debt ...... 0 (c) Net Non-Electoral ...... $ 26,865,000

C. Lease Rental Debt ...... $ 431,170

Computation of Borrowing Capacity (a) Debt Limitation – 225% of Borrowing Base ...... $ 44,994,341 (b) Less: Net Non-Electoral and Lease Rental Debt (1) ...... 27,296,170 (c) Current Non-Electoral and Lease Rental Borrowing Capacity ...... $ 17,698,171 ______(1) Includes the Bonds.

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TAXING POWERS OF THE SCHOOL DISTRICT The School District, being a school district of the Third Class under the School Code, is empowered by the School Code to levy the following taxes: 1. A basic annual tax on all real property taxable for school purposes, not to exceed 25 mills on each dollar of assessed valuation, to be used for general school purposes. 2. An unlimited tax on all real property taxable for school purposes to provide funds: (a) for minimum salaries and increments of the teaching and supervisory staff; (b) to pay rentals due any municipal authority or non-profit corporation or due the State Public School Building Authority; (c) to pay interest and principal on any indebtedness incurred pursuant to the Local Government Unit Debt Act, or any prior or subsequent act governing the incurrence of indebtedness of the school district; and (d) to pay for the amortization of a bond issue which provided a school building prior to the first Monday of July, 1959. 3. An annual per capita tax, not less than one dollar ($1.00) and not more than five dollars ($5.00) on each resident or inhabitant over 18 years of age. The School District may also levy additional taxes, subject to division with other political subdivisions authorized to levy similar taxes on the same person, subject, business, transaction or privilege, under Act No. 511, enacted December 31, 1965, as amended (the “Local Tax Enabling Act”). These taxes, which may include, among others, an additional per capita tax, wage and other earned income taxes, real estate transfer taxes, gross receipts taxes, and occupation taxes, shall not exceed, in the aggregate, an amount equal to the product of the market valuation of real estate in the School District (as certified by the State Tax Equalization Board of the Commonwealth – “STEB”) multiplied by twelve mills. A recent amendment to the Local Tax Enabling Act authorized all taxing authorities to increase at their individual discretion, the exemption level for per capita, occupational, earned income and similar taxes from $5,000 to $10,000. The Local Tax Enabling Act was amended by Act 222 of 2004 to authorize all taxing authorities to exempt from per capita, occupation, emergency and municipal service or earned income taxes any person whose total income from all source is less than $12,000 per year. The taxing powers of the School District described above may be modified by the provisions of the Taxpayer Relief Act or certain other legislation. See “PENNSYLVANIA ACTS AFFECTING CERTAIN LOCAL TAXING POWERS OF SCHOOL DISTRICTS” below.

PENNSYLVANIA ACTS AFFECTING CERTAIN LOCAL TAXING POWERS OF SCHOOL DISTRICTS

The Taxpayer Relief Act (Act 1) Under Act 1, a school district may not, in fiscal year 2007-2008 or in any subsequent fiscal year, levy any tax for the support of the public schools which was not levied in the 2006-2007 fiscal year, raise the rate of any earned income and net profits tax if already imposed under the authority of the Local Tax Enabling Act (Act 511), or increase the rate of any tax for school purposes by more than the Index (defined below), unless in each case either (a) such increase is approved by the voters in the school district at a public referendum or (b) one of the exceptions summarized below is applicable and the use of such exception is approved by the PDE: 1. to pay interest and principal on indebtedness incurred (i) prior to September 4, 2004, in the case of a school district which had elected to become subject to the provisions of the prior Homeowner Tax Relief Act, Act 72 of 2004, or (ii) prior to June 27, 2006, in the case of a school district which had not elected to become subject to Act 72 of 2004; to pay interest and principal on any indebtedness approved by the voters at referendum (electoral debt); and to pay interest and principal on debt refunding or refinancing debt for which one of the above exceptions is permitted, as long as the refunding or refinancing incurs no additional debt other than for costs and expenses related to the refunding or refinancing and the funding of appropriate debt service reserves; 2. to pay costs incurred in providing special education programs and services to students with disabilities, under specified circumstances; and

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3. to make payments into the State Public School Employees’ Retirement System when the increase in the estimated payments between the current year and the upcoming year is greater than the Index, as determined by PDE in accordance with the provisions of Act 1. Any revenue derived from an increase in the rate of any tax allowed under the exception numbered 1 above may not exceed the anticipated dollar amount of the expenditure, and any revenue derived from an increase in the rate of any tax allowed pursuant to any other exception enumerated above may not exceed the rate increase required, as determined by the court or PDE, as the case may be. If a school district’s petition or request to increase taxes by more than the Index pursuant to one or more of the allowable exceptions is not approved, the school district may submit the proposed tax increase to a referendum. The Index (to be determined and reported by PDE by September of each year for application to the following fiscal year) is the average of the percentage increase in the statewide average weekly wage, as determined by the State Department of Labor and Industry for the preceding calendar year, and the employment cost index for elementary and secondary schools, as reported by the federal Bureau of Labor Statistics for the preceding 12-month period beginning July 1 and ending June 30. If and when a school district has a Market Value/Income Aid Ratio greater than 0.40 for the prior school year, however, the Index is adjusted upward by multiplying the unadjusted Index by the sum of 0.75 and such Aid Ratio.

The Index applicable to the School District for the current and previous fiscal years is as follows: 2014-15 3.1% 2013-14 2.5 2012-13 2.5 2011-12 2.0 2010-11 4.2 2009-10 5.9 2008-09 6.3

In accordance with the Taxpayer Relief Act, the Board of School Directors of the School District placed a referendum on the ballot for the May 15, 2007 primary election seeking voter approval to levy (or increase the rate of) an earned income tax or personal income tax and use the proceeds to reduce local real estate taxes by a homestead and farmstead exclusion. The referendum was not approved by a majority of the voters at the primary election A board of school directors may submit, but is not required to submit, a further referendum question to the voters at the municipal election in 2009 or any later year seeking approval to levy or increase the rate of an EIT or a PIT for the purpose of further funding homestead and farmstead exclusions, but the proposed rate of the EIT or PIT shall not exceed the rate which, when combined with any tax rate authorized at the 2007 primary election, is required to provide the maximum homestead and farmstead exclusions allowable under law. The fiscal year for Pennsylvania school districts begins July 1st and the fiscal year budgets must be adopted by school boards no later than June 30th. Certain provisions of Act 1 impact all budgets for Fiscal Year 2006-07 adopted or to be adopted with a millage increase in excess of the Index permitted by Act 1. Corrective legislation was passed by the General Assembly July 1, 2006 as House Bill 185 and signed by the Governor on July 11, 2006 as Act 114 of 2006, that delays effectiveness of certain provisions of Act 1, including the limitations on tax increase, until Fiscal Year 2007-08. SET FORTH ABOVE IS A SUMMARY OF PORTIONS OF ACT 1. THIS SUMMARY IS NOT INTENDED TO BE AN EXHAUSTIVE DISCUSSION OF THE PROVISIONS OF ACT 1 NOR A LEGAL INTERPRETATION OF ANY PROVISION OF ACT 1. A PROSPECTIVE PURCHASER OF THE BONDS SHOULD REVIEW THE FULL TEXT OF ACT 1 AS A PART OF ANY DECISION TO PURCHASE THE BONDS.

Status of the Bonds under the Taxpayer Relief Act

The Bonds described in this Official Statement do not represent debt that was approved (“incurred”) by the Board of School Directors prior to the effective date of Act 1, therefore the Board of School Directors may not apply to the Pennsylvania Department of Education (“PDE”) to use the Act 1 referendum exception for previously incurred debt if a tax increase greater than the Index is needed to provide for payment of principal or interest on the Bonds. The School District, however, included sufficient new millage in its current year budget to cover the full amount of the debt service on the Bonds without exceeding the

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Act I Index (although the actual tax increase may have exceeded the Index as a result of the application of other approved exceptions to the Index.)

Act 130 of 2008 Act 130 of 2008 of the Commonwealth amended the Local Tax Enabling Act so as to authorize school districts levying an occupation tax to replace that occupation tax with an increased earned income tax or, if the school district has implemented a personal income tax in accordance with the Taxpayer Relief Act, an increased personal income tax, in a revenue neutral manner. To so replace an occupation tax, the board of school directors must first hold at least one public hearing on the matter and then place a binding referendum question on the ballot at a general or municipal election for approval by the voters. The School District currently does not levy an occupation tax. SET FORTH ABOVE IS A SUMMARY OF PORTIONS OF ACT 24. THIS SUMMARY IS NOT INTENDED TO BE AN EXHAUSTIVE DISCUSSION OF THE PROVISIONS OF ACT 24 NOR A LEGAL INTERPRETATION OF ANY PROVISION OF ACT 24. A PROSPECTIVE PURCHASER OF THE BONDS SHOULD REVIEW THE FULL TEXT OF ACT 24 AS A PART OF ANY DECISION TO PURCHASE THE BONDS. Act 48 of 2003 – Limitation on Fund Balances

Pennsylvania Act No. 2003-48 (enacted December 23, 2003) prohibits a school district from increasing real property taxes for the school year 2005-2006 or any subsequent school year, unless the school district has adopted a budget for such school year that includes an estimated ending unreserved undesignated fund balance which is not more than a specified percentage of the total budgeted expenditures, as set forth below:

Total Budgeted Expenditures: Estimated Ending Unreserved Undesignated Fund Balance as a Percentage of Total Budgeted Expenditures: Less than or equal to $11,999,999 12.0% Between $12,000,000 and $12,999,999 11.5% Between 13,000,000 and $13,999,999 11.0% Between $14,000,000 and $14,999,999 10.5% Between $15,000,000 and $15,999,999 10.0% Between $16,000,000 and $16,999,999 9.5% Between $17,000,000 and $17,999,999 9.0% Between $18,000,000 and $18,999,999 8.5% Greater than or equal to $19,000,000 8.0%

“Estimated ending unreserved fund balance” is defined in Act 2003-48 as that portion of the fund balance which is appropriable for expenditure or not legally or otherwise segregated for a specific or tentative future use, projected for the close of the school year for which a school district’s budget was adopted and held in the general fund accounts of the school district.

The total budgeted expenditures in the School District’s budget for the 2014-15 fiscal year including fund transfers and budgeted reserves are $22,366,102, and the School District’s estimated ending unreserved undesignated fund balance as a percentage of total budgeted expenditures for the 2014-15 fiscal year is 2.5%

SET FORTH ABOVE IS A SUMMARY OF PORTIONS OF ACT 48. THIS SUMMARY IS NOT INTENDED TO BE AN EXHAUSTIVE DISCUSSION OF THE PROVISIONS OF ACT 48 NOR A LEGAL INTERPRETATION OF ANY PROVISIONS OF ACT 48. A PROSPECTIVE PURCHASER OF THE BONDS SHOULD REVIEW THE FULL TEXT OF ACT 48 AS A PART OF ANY DECISION TO PURCHASE THE BONDS.

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TAX REVENUES OF THE SCHOOL DISTRICT

Largest Taxpayers in School District

The ten largest real estate taxpayers in the School District and 2014 assessed valuation of their real estate are as follows:

Assessed Taxpayer Business Valuation LUTHERCARE RESIDENTIAL FACILITY 7,121,900.00 SUPPLY SALES CO (ANVIL INTL.) PIPE FITTINGS/IRON CASTINGS 3,400,000.00 HELEST REALTY CORP/COLONIAL METALS MANUFACTURING 3,341,800.00 SUSQUEHANNA VALLEY NURSING & R RESIDENTIAL FACILITY 3,290,900.00 M&M REALTY INC PROPERTY HOLDINGS 3,016,800.00 R & S MANUFACTURING ELECTRICAL MOTORS 2,863,000.00 COLUMBIA HOSPITAL HOME MEDICAL FACILITY 2,746,200.00 SOUTHERN END PROPERTIES LTD * SHOPPING CENTER 2,476,200.00 BHI PROPERTIES LLC RENTALS/PROPERTY HOLDINGS 2,114,100.00 INDIVIDUAL PRIVATE INVESTOR/RENTALS 1,335,400.00

TOTAL $31,706,300 (1)

(1) This represents approximately 8.8% of the total assessment of the School District.

* Appeal Notice received November 1, 2013 which will drop the 2014-15 Assessed Valuation to $2,176,200.

Source: School District

Trends in Value of Real Property

Market values of real property in the School District, as reported by the Pennsylvania State Tax Equalization Board.

Common Year Assessed Valuation Market Value Level Ratio 2006 358,147,100 467,554,961 76.6 2007 358,506,600 487,101,359 73.6 2008 358,591,800 485,239,242 73.9 2009 358,007,200 476,073,404 75.2 2010 355,007,900 464,062,614 76.5 2011 354,964,000 450,461,929 78.8 2012 356,463,200 442,262,038 80.6 2013 354,733,000 448,461,441 79.1

Source: Pennsylvania State Tax Equalization Board

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Tax Collection Record

Collected in School Assessed Adjusted Year of Levy Total Collections Year Valuation Millage Levy Amount % Amount* % 2003-04 309,168,000 19.00 5,756,335 5,274,729 91.63 5,443,669 94.06 2004-05 309,168,600 20.00 6,183,372 5,613,729 90.79 5,785,866 93.41 2005-06 357,871,100 18.77 6,717,243 6,085,088 90.59 6,388,737 94.72 2006-07 358,499,300 18.77 6,729,034 6,200,960 92.15 6,391,244 94.72 2007-08 359,116,300 20.66 7,419,343 6,809,564 91.78 6,983,475 93.83 2008-09 358,604,200 23.00 7,613,015 6,929,002 91.02 7,153,434 93.90 2009-10 357,758,700 24.36 8,077,787 7,357,537 91.08 7,615,023 93.78 2010-11 355,389,600 25.37 8,380,666 7,664,673 91.46 7,859,154 93.65 2011-12 354,921,200 25.37 8,367,988 7,684,644 91.83 7,896,107 94.14 2012-13 357,028,600 26.00 8,646,661 7,886,344 91.21 8,058,096 92.96 2013-14 356,802,200 27.37 9,129,439 8,307,055 90.99 8,502,681 92.75 2014-15 355,583,300 28.20 9,390,643 TAX YEAR STILL OPEN

*Includes Delinquent Tax Collections for current fiscal year only. **Homestead Exemption: The Adjusted levy shown excludes the amounts payable from the Property Tax and Rent Rebate Program funded pursuant to Act 1 of the Commonwealth:

Source: School District

2015 Tax Rates

Real Estate (mills) (Based on 100% Assessment) Columbia Borough School District ...... 28.20 Lancaster County ...... 3.735 Columbia Borough ...... 8.00

Per Capita Columbia Borough School District ...... $10

Local Services Tax Columbia Borough ...... $47.00 Columbia Borough School District ...... $5.00

Real Estate Transfer Columbia Borough ...... 1.00%

Earned Income Tax Columbia Borough ...... 5% Columbia Borough School District ...... 5% ______Source: PA Department of Community and Economic Development.

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SUMMARY OF SCHOOL FINANCINGS, FINANCIAL FACTORS AND RATIOS Current Long-Term School Financings (As of ______) Bond and Bond Financing

Long-Term Project Estimated Debt Reimburse- Reimburse- Commonwealth Local Issue Outstanding ment ment (1) Share Share Columbia Borough SD 2015 $ 9,995,000 35.25% 25.76% $2,574,712 $7,420,288 Columbia Borough SD 2014 6,425,000 55.38 40.47 2,600,197 3,824,803 Columbia Borough SD 2013 8,780,000 28.40(2) 20.75 1,821,850 6,958,150 Columbia Borough SD 2010 1,665,000 35.25 25.76 428,904 1,236,096

Lease Rentals LCCTC 2012 431,170 .2850 20.82 89,770 341,400

TOTALS $27,296,170 $7,515,433 $19,780,737

(1) Preceding column multiplied by 2014-15 Commonwealth Reimbursement (.7307) (2) Estimated.

Financial Factors and Ratios

STEB Market Valuation of Real Estate (2013) ...... $448,461,441 STEB Assessed Valuation of Real Estate (2013) ...... $354,733,000 Common Level Ratio ...... 79.1%

Population: 2010 Census...... 10,400 Market Valuation of Real Estate to Population ...... $43,121 Assessed Valuation of Real Estate to Population ...... $34,109

Bonded Indebtedness

Obligations of the Residents of the School District School District General Obligation and Lease Rental ...... $27,296,170 Lancaster County* ...... 2,977,342 Total Obligations ...... $30,273,512

Ratio of Total Obligations to: Market Valuation of Real Estate ...... 6.75% Assessed Valuation of Real Estate ...... 8.53% Population ...... $2,911

Obligations of the Residents after Commonwealth Reimbursement School District General Obligations and Lease Rental ...... $19,780,737 Lancaster County* ...... 2,977,342 Total Obligations After Commonwealth Reimbursement ...... $22,758,079

Ratio of Total Obligations after Commonwealth Reimbursement to: Market Valuation of Real Estate ...... 5.07% Assessed Valuation of Real Estate ...... 6.42% Population ...... $2,188

1. Based on the School District’s percentage (1.17%) of the general obligation debt outstanding of the County of Lancaster ($254,473,700) as reported by the County as of January, 2015.

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APPENDIX B

School District Comprehensive Annual Financial Report Fiscal Year ended June 30, 2014

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Comprehensive Annual

Financial Report

For the Fiscal Year Ended June 30, 2014

Columbia Borough School District, Columbia, Pennsylvania

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COMPREHENSIVE ANNUAL FINANCIAL REPORT

of the

COLUMBIA BOROUGH SCHOOL DISTRICT Columbia, Pennsylvania

FISCAL YEAR ENDED JUNE 30, 2014

Report issued by the School District’s Business Office Laura E. Cowburn, PRSBA, RSBA, Assistant to the Superintendent for Business Services

COMPLIANCE STATEMENT

The Columbia Borough School District continues its policy of non-discrimination on the basis of race, age, sex, religion, color, national origin, handicap, disability or genetic information as applicable in its educational programs, activities, or employment policies as required by Title IX of the 1972 Educational Amendments Title VI of the Civil Disabilities Act and all other applicable state, federal and local laws and ordinances.

For information regarding Title IX compliance, Section 504 compliance, or the Americans with Disabilities Act, contact Dr. Carol L. Powell, Ph.D., Columbia Borough School District, 200 N. 5th Street, Columbia, PA 17512, (717) 684-2283.

COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2014

TABLE OF CONTENTS

INTRODUCTORY SECTION Page Transmittal Letter ...... I – 1 List of Principal Officials ...... I – 12 Organizational Chart ...... I – 13 ASBO Certificate of Excellence ...... I – 14 GFOA Certificate of Achievement ...... I – 15

FINANCIAL SECTION Independent Auditor’s Report ...... F – 1 Management’s Discussion and Analysis Required ...... F – 3

BASIC FINANCIAL STATEMENTS ...... F – 17 Statement of Net Position ...... F – 19 Statement of Activities ...... F – 21 Balance Sheet – Governmental Funds ...... F – 22 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position ...... F – 23 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ...... F – 24 Reconciliation of the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balance to the Statement of Activities ...... F – 27 Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – General Fund ...... F – 28 Statement of Net Position – Proprietary Funds ...... F – 30 Statement of Revenue, Expenses and Changes in Net Position – Proprietary Funds……………….. . F – 31 Statement of Cash Flows – Proprietary Funds ...... F – 32 Statement of Fiduciary Net Position – Fiduciary Funds ...... F – 33 Statement of Changes in Fiduciary Net Position – Fiduciary Funds ...... F – 34 Notes to Financial Statements ...... F – 35

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COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2014

TABLE OF CONTENTS (continued) FINANCIAL SECTION (continued)

SUPPLEMENTARY INFORMATION ...... F – 57 GENERAL FUND ...... F – 58 Schedule of Revenues Compared with Budget ...... F – 58 Schedule of Expenditures and Other Financing Uses Compared with Budget ...... F – 60 FIDUCIARY FUNDS ...... F – 67 Statement of Changes in Assets and Liabilities – Agency Fund ...... F – 68 Combining Statement of Fiduciary Net Position ...... F – 69 Combining Statement of Changes in Fiduciary Net Position ...... F – 70

STATISTICAL SECTION Section Overview ...... S – 1 Net Position by Component ...... S – 2 Expenses, Program Revenues and Net (Expense)/Revenue ...... S – 4 Governmental Funds – Fund Balances ...... S – 8 Governmental Funds – Changes in Fund Balances ...... S – 10 General Fund Revenues and Other Financing Sources by Source ...... S – 14 General Fund Expenditures and Other Financing Uses by Function ...... S – 16 General Fund Cost per Pupil for Expenditures and Other Financing Uses ...... S – 18 Assessed Value and Estimated Actual Value of Taxable Property ...... S – 20 Property Tax Rates (per $1,000 of Assessed Valuation) – Direct and Overlapping Governments ...... S – 22 Property Tax Levies and Collections ...... S – 24 Construction Permits and Market Values ...... S – 26 Governmental Funds – Most Significant Own-Source Revenues ...... S – 27 Ten Largest Real Property Taxpayers ...... S – 28 Bank Deposit Information ...... S – 30 Gross Principal Debt Outstanding ...... S – 31 Computation of Direct and Overlapping Debt ...... S – 32

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COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2014

TABLE OF CONTENTS (continued) STATISTICAL SECTION (continued)

Computation of Legal Debt Margin ...... S – 33 Legal Debt Margin Information ...... S – 34 Ratio of Net General Bonded Debt to Assessed Value And Net Bonded Debt Per Capita ...... S – 36 Population Trends...... S – 38 Demographic and Economic Statistics ...... S – 40 Ten Largest Area Employers ...... S – 42 Lancaster County School District Selected Data with State Rankings ...... S – 44 Lancaster County School District Student/Teacher Data ...... S – 46 Staff FTE...... S – 48 Salary Data for Professional Staff ...... S – 50 Professional and Administrative Staff Summary ...... S – 52 Support Staff Summary ...... S – 54 District Facilities ...... S – 56 Enrollment Projections ...... S – 58 Average Daily Attendance Report ...... S – 60 National School Lunch Program Free and Reduced Data ...... S – 62 Schedule of Insurance ...... S – 64

SINGLE AUDIT SECTION

Schedule of Expenditures of Federal Awards ...... SA – 2 Notes to the Schedule of Expenditures of Federal Awards ...... SA – 4 Independent Auditor’s Report on Internal Controls over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Governmental Auditing Standards ...... SA – 5 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by OMB Circular A-133 ...... SA – 7 Schedule of Findings and Questioned Costs ...... SA – 9 Corrective Action Plan ...... SA - 11

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Introductory Section

Columbia Borough School District, Columbia, Pennsylvania

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COLUMBIA BOROUGH SCHOOL DISTRICT 200 North Fifth Street, Columbia, PA 17512 Phone: 717-684-2283 - Fax: 717-681-2617 "Dedicated to Excellence…" Carol L. Powell, Ph.D., Superintendent Laura E. Cowburn, PRSBA, Asst. to the Supt. for Business Services/Board Secretary

The district will not discriminate on the basis of race, color, sex, religion, national origin, disability, or age. District Contact person is the Superintendent of Schools.

December 11, 2014

CITIZENS OF COLUMBIA BOROUGH SCHOOL DISTRICT:

We are pleased to present the Comprehensive Annual Financial Report for Columbia Borough School District, Lancaster, County, Pennsylvania (the “District”) for the fiscal year ended June 30, 2014. The District business office prepared this report. Responsibility for the accuracy of the data presented and the completeness and fairness of presentation, including all disclosures, rests with the District. We believe that the data is accurately presented in all material respects, that it is presented in a manner designed to fairly present the financial position and results of operations of the District as measured by the financial activity of the various funds, and that all disclosures necessary to enable a reader to gain the maximum understanding of the District’s financial affairs have been included. This report has been prepared following the guidelines recommended by the Association of School Business Officials, International and the Government Finance Officers Association of the United States and Canada.

COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR)

This CAFR consists of four sections:

(1) The Introductory Section. This section includes a transmittal letter, list of principal officials of the district, an organizational chart, and information on financial reporting achievements. (2) The Financial Section. The financial section consists of the independent auditor's report, the Management Discussion and Analysis (the “MD&A”), basic financial statements, required supplemental information, and combining and individual fund statements and schedules. The basic financial statements present both an overview and a broad long-term perspective of the District as a whole in the government-wide financial statements. (3) The Statistical Section. Included in this section are a number of tables of unaudited data depicting the financial history, demographics and other miscellaneous information of the Columbia Borough School District for the past ten years, as well as some current information. (4) The Single Audit Section. The District complies with the requirements of the Single Audit concept, in conformity with the provisions of the Single Audit Act of 1984, the Single Audit Act Amendments of 1996 (P.L. 104-156) and the United States Office of Management and Budget, Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations.” This section includes all related information, including the Schedule of Expenditures of Federal Awards, and the auditor’s reports on the internal control structure and compliance with applicable laws and regulations.

This Introductory Section is designed to complement the analysis found in the MD&A and should be read in conjunction with it for a complete overview of the District activities.

I - 1 A BRIEF DISTRICT HISTORY

Originally named Wright’s Ferry and founded by John Wright in 1726, Columbia was an early center for turnpike, canal and railroad activity at an important Susquehanna River Crossing. As early as 1807, landowners such as Samuel Wright sold or donated land for the purpose of establishing a school. Prior to 1834, there was no system of schools in Pennsylvania. Bills were presented in the Pennsylvania Legislature for the establishment of schools and while the measures had support of Governor George Wolf, there was plenty of opposition. The greatest advocate was Thaddeus Stevens who at that time was a State Representative from Adams County and subsequently moved to Lancaster. Due to his work, the “Common School Law” was passed in 1834. Each district had to vote on the question whether they would accept it. A meeting for both Columbia and West Hempfield Township was held and at an election in 1834 both voted to adopt the system and were among the first districts to do so. Consequently, a local school board was created and Columbia became one of the first communities to accept that obligation and that of taxation to support its schools.

In 1854, the Public Ground Company (established to manage public property for the good of the citizenry) purchased ground for the construction of an academy, purchased from John L. Wright, 2-1/2 acres at $700 per acre. Additional ground was purchased from John Houston Mifflin in 1856. The successful bidder to build this school was Michael Clepper at a bid of $8,640.

The new school was to be operated by two boards of directors working jointly. In 1857, the school opened teaching higher mathematics and classical subjects with Professor Joseph Nikols as Principal. However, the Washington Institute, as it was called, was not a financial success and in 1863 the building was leased to the United States Government and used as a hospital for two months and housed wounded veterans of the battle of Gettysburg. In 1864, the building became a boarding school for boys directed by Professor H. S. Alexander.

The first schools in the Borough were one-room schools, housed in six different buildings and were not graded, all experiencing various degrees of success. The grading of schools was not undertaken until 1857. It was at this time that consolidation of the existing schools seemed to be the answer for improving the educational program.

In the early 1860’s, a lot of ground was purchased on Cherry Street from William Hippy and upon this lot a 3- story building of 18 rooms was built. At the time it opened, only ten classrooms were finished but they housed the entire student population. The building was named the Union School because it was built to accommodate all the pupils who had formerly attended the six different schools in the Borough. The name subsequently changed to the Cherry Street School. It contained an auditorium with seating capacity of about four hundred, and this was called Union Hall and used for many local activities and events. The building was modeled after Broad Street high school in Philadelphia, and when finished in 1863, was rated as one of the largest and finest schools in the Commonwealth at that time, at a total construction cost of $16,000 built by Liphart & Shuman.

In the early years, there was no superintendent, with the teacher working directly under the supervision of the school board. The Board advertised for the position, received fifty-seven applications and on April 1, 1875, Benjamin G. Ames, of Bridgeton, NJ, became the first superintendent of schools at an annual salary of $1,400.

In 1876, the Public Ground Company leased the Washington Institute Building, which had fallen into financial troubles, to the Columbia School Board for a period of twenty years at an annual rent of $400. At that time, the Board moved the High and Grammar Schools to the Institute Building from the Cherry Street Building. The Grammar school students were moved to the Taylor Building in 1904, and in 1916, the Institute building was demolished. In its place was erected a new high school built on Park Street that opened in 1917. An addition was added to the high school in 1939, which was opened in 1940. The high school remained at the Park Street location until 1956. The current junior/senior high school was constructed and opened for students in 1957. It currently houses Grades 7-12.

The District had two elementary buildings, each housing grades K-6 up to the end of the 2013-2014 school year. The William G. Taylor Building was established in 1904 because of the shift of community growth away from the river. It was demolished in 1987 and the current Taylor Elementary School was opened in 1988. Park Elementary School was established when the high school moved to its new location on the hill. Renovations to transform the school into an elementary center occurred in 1980, with additional renovations in 1998.

I - 2 A Brief History continued

During the fiscal year 2003-2004, a local congregation that was consolidating two churches, First English and St. John’s Lutheran Churches, donated the vacant church and property to the District. This church’s origination started in 1849 with the first Lutheran immigrants who did not understand German moving to the town. A lot of ground was purchased and in 1852 First English Church opened on Second Street and Alley H at a cost of $6,390. Due to some differences of opinion, some members created a new church established in 1881, St. John’s Lutheran Church. A new First English Church was constructed in 1954, where the building stands today, at the corner of Chestnut and North Fifth Street The old church now houses the Columbia Historical Society. A Chapel was added to the First English Church in memory of parents Grant U. and Annie A. Strine and wife Reba Strine by son and husband Harry S. Strine. This section was used for small personal weddings and prayer and meditation. In 2000, both congregations remerged and moved into the St. John’s Church and today, the former First English Church with the main entrance into the old Strine Memorial Chapel consolidated various administrative offices which were scattered throughout the other buildings into the District Administration Center which also houses a community day care program.

THE REPORTING ENTITY

The District is a school district of the third class organized under state law and located in Lancaster County in south central Pennsylvania and a primary government as determined within the criteria established in the Governmental Accounting Standards Board’s (GASB) Statement No. 61.

The District is governed by a nine member Board of School Directors (the “Board”), elected for four-year terms. The Superintendent is the chief administrative officer of the District with overall responsibility for all aspects of operations, including education and finance. The Assistant to the Superintendent for Business Services is the chief financial officer and is responsible for budget and financial operations. Both officials are selected by the Board and contracted in accordance with Pennsylvania School Law and relevant legislation.

The District provides a comprehensive educational system from kindergarten through grade twelve, including regular instruction, special instruction, vocational education and necessary support services. The Mission Statement of the District states:

“The Columbia Borough School District provides a learning environment for each student to fulfill his/her highest academic potential. The District, in partnership with the community, will prepare each student to become an independent, life-long learner and a responsible, caring citizen.”

The District has a goal to provide a valid and successful educational program. To ensure the success of the District programs, a Comprehensive Plan was adopted by the Board that is utilized as a blueprint for student and District growth. Total enrollment as of October 1, 2014 is 1,346 in regular education classes operated by the district, and 1437 in total enrollment. These numbers include 14 students who participate in the Columbia Virtual Academy Program. In addition to the 1437, there are 6 students attending the Lancaster County Academy, 3 students being home-schooled, 9 in placement facilities and 51 students attending some of Pennsylvania’s Cyber-Charter Schools.

The District employs approximately 140 Full-time employees and 43 Part-time employees, comprised of 98 Full- time teachers 9 Part-time teachers and 12 administrators, and 30 full-time and 34 part-time support personnel as well as seasonal coaching and extra-curricular staff. The District’s teachers are represented by the Columbia Education Association (CEA), an affiliate of the Pennsylvania State Education Association (PSEA), under a contract with the District, which expired June 30, 2014. At the time of this report, the District and the CEA are in active negotiations. The CEA has not had a strike in more than 29 years.

I - 3 The Reporting Entity continued

Legal Entities The District recently changed its building structure. Effective with the start of school in September, 2014, The District restructured to improve the learning opportunities. The District now operates one elementary school (Grades K-4), one middle school divided into two buildings (Grades 5-6 and Grades 7-8), and a high school (Grades 9-12). Students in grades 10-12 also may attend the Lancaster County Career and Technology Center (the “LCCTC”).

The LCCTC is a separate legal entity, which serves the sixteen public school districts in Lancaster County through a joint venture agreement. The District also participates in Lancaster County Career & Technology Center Authority (LCCTC Authority) that was formed to provide LCCTC with the ability to acquire land and construct facilities for the LCCTC programs and services. The Reporting Entity – Legal Entities continued

The District maintains other joint venture relationships with the following entities:  Lancaster-Lebanon Intermediate Unit No. 13 (the “LLIU”), an entity that serves the 22 public school districts in Lancaster and Lebanon counties, as well as students in nonpublic schools, preschoolers, and adult learners throughout Pennsylvania.;  Lancaster-Lebanon Joint Authority, an entity formed to provide the LLIU with the ability to acquire land and construct facilities for the LLIU programs and services;  Lancaster County Academy, organized by nine public school districts in Lancaster County to provide alternative education services to identified students; and,  Lancaster County Tax Collection Bureau organized to provide an efficient and consistent method of earned income tax collection and distribution to school districts, townships and municipalities.

Charter/Cyber Schools are separate legal entities, which serve students who opt to attend these instructional programs. Funding for Pennsylvania charter schools is based on a formula calculating a fee for each regular education student enrolled at no less than the budgeted total expenditure per average daily membership of the prior school year minus certain budgeted expenditures of the district of residence. For special education students, the charter school receives the same funding as for each non-special education student noted above plus an additional amount using total special education expenditures per average daily membership of those students. ECONOMIC CONDITION

COMMUNITY

Columbia Borough School District is situated in the extreme west-central portion of Lancaster County in south- central Pennsylvania. The District comprises the same boundaries as the Borough of Columbia located on the east shore of the Susquehanna River, and comprises 2.3 square miles of Lancaster County’s 946 square miles. The county is 46 miles wide at its widest point and 43 miles long at its longest point. Columbia is located approximately ten miles west of the City of Lancaster, which serves as the County Seat of government. Lancaster County is part of the middle Susquehanna River Basin, located adjacent to York County, separated by the Susquehanna River, west of Chester County, with the South Mountains and the Conewago Creek as natural barriers, and southwest of Berks County. The Pennsylvania-Maryland state line borders the southern tip of the county.

Source: Lancaster County website: www.co.lancaster.pa.us/

I - 4 Economic Condition – Community continued

Although somewhat centrally located between the metropolitan areas of Lancaster, York and Harrisburg, the Borough is physically and economically linked to the Lancaster urbanized area. The main transportation links connecting Columbia Borough and the District with other parts of Lancaster County include U.S. Route 30, and PA Route 462 and 441. Route I-76 (the Pennsylvania Turnpike), Interstate 83, U.S. Route 30 and 222 and PA Routes 382 and 41 provide convenient access that links York and Lancaster Counties with Philadelphia, Pittsburgh, Wilmington, Baltimore and Washington D.C. Lebanon and Reading areas are also less than one hour’s driving time.

Lancaster County was created on May 10, 1729, from part of Chester County and named for Lancashire, England. Lancaster, the county seat, named for its England counterpart, was laid out in 1730. It was chartered as a borough on May 1, 1742, and as a city on March 10, 1818. The best non-irrigated farmland in the world brought the Amish here to settle. Perhaps best known for the strong agricultural base, Lancaster County features a diverse cross-section of enterprises and industry sectors.

While a number of those industries are rooted in agriculture, some were initiated to support the thriving local economy, while others moved here or opened operations in the area to take advantage of the business friendly environment. Lancaster County agriculture contributes to the economy with more than 5,000 farms generating nearly $800 million annually. This sector also is a top draw for our tourism industry which generates $1.6 billion annually.

As a side line to the agricultural market, agribusinesses including CNH Case New Holland, Wenger’s Feed Mill, Inc., Four Seasons Produce and many others contribute to the overall success of the farming community. As a result, many popular food items are manufactured in this County, with the Turkey Hill brand widely recognized throughout the U.S.

Our manufacturing sector provides 57,600 jobs, some in areas of aluminum sheet and cast plate produced by Alcoa to life-saving medications produced by Glaxo Smith Klein Biologicals.

There are some new opportunities in Lancaster County in the last decade. In 2005, Lancaster added the new Clipper Stadium which houses the minor league Lancaster Barnstormers baseball team. This stadium continues to bring added revenues to surrounding businesses boosting the Lancaster economy.

In 2009 the Lancaster County Convention Center and Lancaster Marriott at Penn Square opened a state-of-the- art meeting and convention facility in downtown Lancaster City providing more than 90,000 square feet of combined space for conventions, events and trade shows.

Lancaster County has entered into the soybean-crushing business. Perdue Agribusiness purchased 57 acres of land next to the Lancaster County Solid Waste Management Authority’s incinerator in Marietta for construction of its $59 million soybean plant. The facility will be capable of processing nearly 18 million bushels of soybeans annually, is expected to create up to 50 permanent jobs, and would contract with more than 2,500 Pennsylvania farm families to supply beans. Perdue Agribusiness, headquartered in Salisbury, Maryland, has three other soybean-crushing facilities, one each in Maryland, Virginia and North Carolina. The county project is scheduled for completion in 2014.

In recent years, the service and trade sectors have been experiencing growth. Healthcare and related industries are growing. Lancaster General is the County’s top employer with 7,000 employees. The U. S. News and World Report reported that of the five regional hospitals, Lancaster General is 1st and ranked 15th in the State.

In 2014, the Smithsonian named Columbia, PA one of the top 20 small towns to visit. We are proud of that distinction and expect that it will boost tourism in our community.

I - 5 Economic Condition – Community continued

The Borough of Columbia has been focused on improving the tax base of the community and enhancing the downtown. As a result, the Columbia Economic Development Corporation (CEDC) was founded in 2005. CEDC works as a bridge between business, government and the community to actively promote community development and encourage business investment within Columbia.

One of the success stories of the CEDC is in current operation in the Borough. This new “experience” renovated the 1899 historic Ashley & Bailey Silk Mill which had been abandoned for over 25 years. In the spring of 2011, Turkey Hill, a local dairy company, opened "The Turkey Hill Experience," where visitors can make their own ice cream, see how the dairy operates and learn about farming. Other parts of the site include an indoor "farm" with child-size toy equipment, a gift shop, a restaurant, event space for agri-based organizations and a Turkey Hill Mini Market. Because of its location along Route 30 and Route 441, it has already attracted a significant number of tourists into the area. The Mill building has been renovated into individual office building space and some new businesses have moved in.

In other news, the Borough of Columbia was awarded the 2010 Governor’s Award for Local Government Excellence in Promoting Community & Economic Revitalization. The award was for the Columbia Borough River Park Revitalization & Expansion Project. The award is the result of seven years’ work by the River Park Steering Committee. The River Park Steering Committee started discussions on revitalizing the River Park in 2003 and has been meeting monthly since. During 2010, the River Park completed a three lane motorized boat ramp, new canoe/kayak ramp, increased parking, lights, a fishing pier and docks. In 2013, construction on the Park & Trail Services Building at River Park began. Completion of the building will depend on the winter weather but is expected to be completed during the first quarter of 2014. The building will consist of three pods; one will contain restrooms, another will be a general purpose and information center, and the third will consist of a large deck with a roof. Completion of the building will mark a ten year multi-phase project to expand and revitalize the River Park and to act as trailhead for the Northwest Lancaster County Trail. The trail will run from Columbia to Falmouth in Conoy Township. Columbia’s portion of the trail will be completed with the relocation of Pennsylvania Route 441 (SR441), currently under construction and expected to be finished in the spring of 2015. SR 441 is the major north-south arterial running through the center of Columbia's downtown historic area. SR 441 is used for both local vehicular traffic in the Borough and for truck traffic using SR441 to connect to US 30.

The project is designed to reduce the number of vehicles that travel through downtown Columbia. Large and heavy trucks generate vibration that potentially undermines the foundations of some of the Borough's oldest structures. In addition, the trucks' travel through the downtown area has caused multiple accidents with other vehicles and pedestrians, and contributes to air and noise pollution in the Borough. The relocation would reduce the number of trucks by approximately 600 per day, and will enhance the overall downtown revitalization of businesses and residences. The Borough Council's initiative to move the road is part of its strategic plan to rejuvenate the historic downtown.

The Borough of Columbia is experiencing the same challenges of most communities – “mom and pop” businesses in the downtown trying to compete with the major departments stores and surrounding area malls. The combination of the business development efforts of the CEDC and the community recreation efforts of the Borough along with the Smithsonian designation are intended to change that situation.

SCHOOL DISTRICT

Legislation and Budget On June 27, 2006, the Pennsylvania Legislature passed Act 1 of Special Session 2006, entitled the “Taxpayer Relief Act” (hereinafter “Act 1”). Act 1 requires school districts to limit property tax increases to the level set by an inflation index (hereinafter “the Index”) unless the tax increase is approved by voters in a referendum or the school district obtains permission from the Department of Education for certain referendum exceptions. Those exceptions are related to increases in the employer retirement rate (refer to the section entitled “Pennsylvania School Employees Retirement System”), special education costs and certain bond obligations related to construction.

I - 6 Economic Condition - School District – Legislation and Budget continued

Legislation includes an adjustment of the base Index for school districts who meet certain low income data categories. The District qualifies for this adjustment which is referred to as the “Adjusted Index.” The history of the Index and the Adjusted Index is:

For use in School Year State Index District Adjusted Index 2006-2007 3.9% 5.5% 2007-2008 3.4% 4.8% 2008-2009 4.4% 6.3% 2009-2010 4.1% 5.9% 2010-2011 2.9% 4.2% 2011-2012 1.4% 2.0% 2012-2013 1.7% 2.5% 2013-2014 1.7% 2.5% 2014-2015 2.1% 3.1% 2015-2016 1.9% 2.8%

The District has the highest property tax rate in the County. All staff of the District participated in a one-year salary freeze by repeating the 2010-2011 year in all contracts and agreements. These contracts and agreements resumed for 2012-2013 using the 2011-2012 obligations.

In 2014-2015, the District continued to be challenged with the increasing costs of special education along with the increased employer contributions to support the Pennsylvania School Employees Retirement System (PSERS). With the reconfiguration of grades and learning environment, the District taxes increased, but stayed within the established adjusted index. The taxes increased from 27.37 in 2013-2014 to 28.2 mills in 2014-2015.

Pennsylvania School Employees Retirement System Pennsylvania provides a defined benefit pension system to retirees. Due to economic conditions, the system is projecting escalating increases to the employer cost. The rate caps limit the amount the pension component of the employer contribution rate can increase over the prior year’s rate as follows: FY 2011-2012 – not more than 3.0% adjusted by the premium assistance contribution rate – 8.65% FY 2012-2013 – not more than 3.5% adjusted by the premium assistance contribution rate – 12.36% FY 2013-2014 – not more than 4.5% adjusted by the premium assistance contribution rate – 16.93% FY 2014-2015 – not more than 4.5% adjusted by the premium assistance contribution rate – 21.40%

The rate cap then remains at 4.5% until the projected increase to the employer contribution rate is less than the rate cap. These rates are above the Index and the current rate of inflation but are much lower than the actuarial projections of the System.

Earned Income Tax The Lancaster County Tax Collection Bureau is an agency organized to simplify the reporting, administration, and collection of the Earned Income Tax for all residents of its jurisdiction, which is comprised of all the school districts and municipalities in Lancaster County, Pennsylvania, and then distributing the collections to the appropriate taxing bodies. The District and the Borough of Columbia share a tax based on earned income with each taxing body receiving .5%.

The collection and distribution of earned income tax has involved many school districts and municipalities in Pennsylvania through various tax collection processes. In order to make the process uniform throughout the State, legislators passed Act 32 of 2008. This Act restructured earned income tax agencies by creating county- wide tax collection districts (TCDs). These new districts have boundaries that are generally congruent geographically with current county lines with a few exceptions.

Effective January 1, 2012, the new TCDs began operation. While initially the District budgeted for lower cash distribution, actual distributions kept pace with the historical trend. However, to be cautious, the district budgeted conservatively for 2014-2015.

I - 7

Economic Condition - School District – Long-term Financial Planning continued

Long-term financial planning The District has renovated all buildings and grounds since 2004. All the debt has been issued to cover these costs and the annual payments should remain flat for the next decade. The District Capital Reserve Fund is maintained to handle any normal costs of upgrades and maintenance issues as needed. Capital improvements should not be a burden to the District for the near future.

The District planned for the increases in the employer retirement rate by establishing a commitment of fund balance that is actively managed to be used to blend the rate into the budget spreading and limiting the impact of the rate increases.

On November 14, 2013, the Commonwealth of Pennsylvania’s Independent Fiscal Office released its updated long-term economic and budget outlook for the commonwealth, which looks at Pennsylvania's fiscal position through 2018-19. The report, which considers demographic, economic, revenue and expenditure trends that might affect fiscal position, projects a long-term structural deficit starting with the 2014-15 budget deliberations. Mandated employer contributions for both the PSERS and the State Employee Retirement System (SERS) pensions along with anticipated health care inflation will continue to drive much of the expenditure growth in the five-year projections.

The State has provided flat financial support of basic education and special education subsidies for school districts during the last six years. This, with the limits on the property tax by the Index, is creating challenges for future budgets. The District continues to evaluate ways to streamline programs and services will be partnered with the restricted sources of revenue.

The legislators did pass legislation to add a formula component to distribute any new special education appropriations in a more equitable manner. While this is good news for the District going forward, very little new money was appropriated for 2014-2015. Additionally, the legislators now are studying the basic education subsidy to determine a more equitable distribution of any new money, but the key to both of these subsidies is that the State must provide new money in order for the formulas to be active.

This is not good news for the District. The District receives about 50% of revenue from the State. Based on this news, the District can anticipate additional pressures for controlling or decreasing expenditures so as to minimize the tax impact on the community. Continued tax increases could challenge the economic improvement of the Borough as well.

In the fall of 2013, the District refinanced the 2009A bond issue to realize some savings going forward. The District refinanced the 2009 bond issue in the spring for 2014, and if savings can be achieved, the 2010 bond issue will be refinanced in the near future to provide additional savings.

MAJOR INITIATIVES

Substantial changes have occurred during the 2014-15 school year to help reinforce district goals to support students and staff. At the beginning of this transition year a superintendent was hired, replacing an interim superintendent who held the post for a year while the search for a new leader was underway. The leadership change also resulted in new hires for the district’s administrative team. This is also the initial year of the Kindergarten through eighth grade reconfiguration, resulting in one elementary school in the district, and the migration from a junior high school to a middle school configuration.

I - 8 Major Initiatives continued

The district remains committed to our district mission to provide a learning environment for each student to fulfill his or her highest academic potential. The following district goals and activities have been established to meet our mission: 1. Focus on professional development to help district staff identify and implement best educational practices in our classrooms; 2. Implementation of a curriculum review cycle to align district curricula with state standards; 3. Strategically planning the use of grant funds to support district initiatives; and 4. Collaborative team work to address challenges and acknowledge celebrations.

Columbia Borough School District is committed to providing an educational experience that will prepare our students for college and career success.

CURRICULUM REVIEW CYCLE

A six-year curriculum review cycle has been designed to assist with implementing a process to research, map, write, and monitor curriculum activities in the district. The needs in the district require curriculum activities to occur simultaneously over the next few years to accelerate this important work across grade levels and subjects.

The 2014-15 school year will utilize a modified version of the six-year curriculum cycle to ensure that all tested subjects are aligned to the updated academic standards for Pennsylvania. On the secondary level, the gap years will focus on writing or revising curricula in the tested subject of math, ELA, and science. Remaining content areas will be addressed after these priority areas are aligned. The 2014-15 school year will also include an extensive Kindergarten through fourth grade curriculum audit. The audit will require a needs assessment to identify essential curriculum content and inform the vertical and horizontal articulation of the curriculum.

ACCOUNTING SYSTEM Internal Controls

Internal controls within the District are refined each year to provide reasonable, but not absolute, assurance regarding both the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records. Changes in internal controls recognize that the cost of the control should not exceed the benefits likely to be derived. Cost and benefits are discussed with both the Board and the independent auditors, as changes become desirable. We believe the District’s internal controls within the accounting system adequately safeguard assets and provide reasonable assurance as to proper recording of financial activity.

Fund Accounting

The District’s accounting records are maintained according to the “fund” basis of accounting. Each fund is a separate accounting entity with its own set of self-balancing assets, liabilities and fund equities/retained earnings. The funds encompassing the District’s financial affairs are described in the Financial Section.

Budgeting

The District budgets and expends funds following the Public School Code and according to procedures mandated by the Pennsylvania Department of Education (PDE).

The District’s budgeting is a year-round process. Throughout the year, the budget is controlled by administrators, principals, supervisors and coordinators within program areas, and is reviewed monthly in order to assure funding plans are being implemented properly. Budgetary control is established by function and object within the general fund to monitor expenditures that cannot legally exceed appropriated amounts. The District also maintains an encumbrance accounting system to assist with budgetary controls.

I - 9 Accounting System continued

Budgeting begins during September through December for the review of future needs and forecasts of student enrollments, capital improvements, and inventory and supply needs which are translated into specific bids as required by the Public School Code.

The preliminary proposed budget, as required by Act 1, is a general estimate of anticipated revenues and expenditures forecasted and proposed by January. However, this estimated budget is provided to establish the justification for any tax increase needs that would exceed the index and determine if taxing exceptions may be necessary. This preliminary proposed budget is released to the public prior to submission to PDE. However, if a district makes a commitment to stay within the Act 1 adjusted index, this budget step is not required.

Throughout the whole process, responsibility for development of budget requests occurs first at the building or department program area level. Each principal and program administrator reviews these estimates and builds budget requests during the month of December. These requests are then translated into monetary terms in the form of detailed budgetary schedules that are then reviewed during the months of January through March with supporting justification to the Superintendent.

In March, a preliminary review of the budgeting process is presented to the Board by the Superintendent and the Assistant to the Superintendent for Business Services outlining the general focus of the overall budget related to enrollment projections, staffing projections, capital improvements and financial consideration of the local and state funding sources. The response provided by the Board from this process is used in the final budget development during April and May.

A budget is presented to the community in its proposed form during the months of May and June with final adoption of the budget occurring no later than June 30. The spending plan is closely monitored in the business office after implementation on July 1. The budget is prepared consistent with generally accepted accounting principles.

Financial Policies The Columbia Borough School District maintains Board Policies that include policies related to finances. Contained in this section is Board Policy 622 – Capitalization which is related to the Governmental Accounting Standards Board Statement 34. This policy outlines how capital assets shall be recorded which subsequently determines information for the District Government-Wide Financial Statements.

Due to the economy and the imposition of Act 1, the District is in a different position than it has been in the past for long-term financial planning. The economy has challenged taxpayers, and Act 1 has added some limitations for future tax increases and the State’s requirement to restrict undesignated, unreserved fund balance in the General Fund has added additional pressure on future planning.

The Board understands these concepts and looks beyond the current and up-coming fiscal year to be sure that enough money is set aside in reserves in fund balance to provide financial stability going forward. In addition, the Board has been actively using a Capital Reserve Fund to accumulate dollars which will be used to help phase in debt service if needed. This Fund also finances significant capital renovations limiting the burden of funding needed from the General Fund.

Independent Audit The District financial statements are audited annually by a firm of independent certified public accountants that includes a comprehensive annual audit of the District's financial affairs, as required by State Law. The firm of Sager, Swisher and Company, LLP, Columbia, Pennsylvania, has served as District auditor for over 35 years, and was selected to perform the audit for the fiscal year ended June 30, 2014. This audit was performed in accordance with generally accepted auditing standards. The audit report was issued in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. The Single Audit section is part of this reporting package.

The auditor's unmodified opinion rendered on the District's basic financial statements, and their report on the combining and individual fund statements and schedules, is included in the financial section of this Comprehensive Annual Financial Report.

I - 10

COLUMBIA BOROUGH SCHOOL DISTRICT

LIST OF PRINCIPAL OFFICIALS as of JUNE 30, 2014

BOARD OF EDUCATION

President ...... Thomas R. Strickler Vice-President ...... Cole F. Knighton Secretary ...... Laura E. Cowburn * Member ...... Vicki Anspach Member ...... Quin Hartman Member ...... Kathleen Hohenadel Member ...... Matthew Kreiser Member ...... Sara A. Linkous Member ...... Alysa Poindexter Member ...... Janet Schwert * Non-voting

OTHER BOARD SERVICES

Solicitor ...... Nikolaus & Hohenadel Treasurer ...... Union Community Bank Independent Auditors ...... Sager, Swisher and Company, LLP

CENTRAL ADMINISTRATIVE OFFICIALS as of June 30, 2014

Acting Superintendent ...... Kenneth Klawitter, Ed. D. Assistant to the Superintendent for Business Services ...... Laura E. Cowburn, PRSBA

CENTRAL ADMINISTRATIVE OFFICIALS as of July 1, 2015

Superintendent ...... Carol L. Powell, Ph.D. Assistant to the Superintendent for Business Services ...... Laura E. Cowburn, PRSBA

I - 12 COLUMBIA BOROUGH SCHOOL DISTRICT 2014‐2015 ORGANIZATIONAL CHART

BOARD OF SCHOOL DIRECTORS

SUPERINTENDENT OF SCHOOLS SOLICITOR

CURRICULUM/ ASST. TO THE SUPT. FEDERAL PROGRAMS FOR BUSINESS DIRECTOR SERVICES

TAX COLLECTOR I - 13 DIRECTOR OF HIGH SCHOOL MIDDLE SCHOOL ELEMENTARY SPECIAL EDUCATION PRINCIPAL PRINCIPAL PRINCIPAL

ATHLETIC TECHNOLOGY TELECOM‐ BUILDINGS AND DIRECTOR/ CURRICULUM FOOD SERVICE MUNICATIONS GROUNDS DEAN OF INTEGRATION DIRECTOR DIRECTOR DIRECTOR STUDENTS DIRECTOR

DEAN OF DEAN OF CURRICULUM STUDENTS STUDENTS LEADERS

PROFESSIONAL PROFESSIONAL PROFESSIONAL PROFESSIONAL STAFF STAFF STAFF STAFF

DISTRICT/BOARD/ BUSINESS OFFICE COMMUNITY ADMINISTRATIVE ADMINISTRATIVE ADMINISTRATIVE ADMINISTRATIVE TECHNICIAN SUPPORT FOOD SERVICE BLDG./MAINT. COORDINATORS COORDINATOR SUPPORT STAFF SUPPORT STAFF SUPPORT STAFF SUPPORT STAFF STAFF SUPPORT STAFF SUPPORT STAFF SUPPORT STAFF SUPPORT STAFF INTER‐SCHOLASTIC COACHES

Association of School Business Officials International

The Certificate of Excellence in Financial Reporting Award is presented to Columbia Borough School District For Its Comprehensive Annual Financial Report (CAFR) For the Fiscal Year Ended June 30, 2013

The CAFR has been reviewed and met or exceeded ASBO International’s Certificate of Excellence standards

Terrie S. Simmons, RSBA, CSBO John D. Musso, CAE, RSBA President Executive Director

I - 14 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting

Presented to Columbia Borough School District Text38: Pennsylvania

Text53:

For its Comprehensive Annual Financial Report for the Fiscal Year Ended

June 30, 2013

Executive Director/CEO

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

Financial Section

Columbia Borough School District, Columbia, Pennsylvania

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

SAGER, SWISHER AND COMPANY, LLP Certified Public Accountants and Consultants Members

American Institute of 619 West Chestnut Street Certified Public Accountants Lancaster, Pennsylvania 17603 ______

Pennsylvania Institute of 15 North Third Street Certified Public Accountants Columbia, Pennsylvania 17512

Partners Consultants

John D. Murr, CPA Edward M. Sager (1932-2011) Michael L. Reiner, CPA C. Edwin Swisher, III, CPA, Inactive Lori L. Royer, CPA INDEPENDENT AUDITOR’S REPORT

Board of School Directors Columbia Borough School District Columbia, PA 17512

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Columbia Borough School District, as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the school district’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the 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 and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Columbia Borough School District, as of June 30, 2014, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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Lancaster 717-299-4563 www.sagerswisher.com Columbia 717-684-2077 Fax 717-299-1364 Fax 717-684-7433

Board of School Directors Columbia Borough School District

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages F-3 through F-16 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Columbia Borough School District’s basic financial statements. The introductory section, combining fund financial statements, statistical section and other supplementary statements listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial statements.

The combining fund financial statements, other supplementary statements listed in the table of contents and schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining fund financial statements, other supplementary statements and schedule of expenditures of federal awards are fairly stated in all material respects in relation to the basic financial statements as a whole.

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Governmental Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated November 20, 2014 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Columbia Borough School District’s internal control over financial reporting and compliance.

Sager, Swisher and Company, LLP

Columbia, Pennsylvania November 20, 2014

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COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) Required Supplementary Information (SI) June 30, 2014

The discussion and analysis of Columbia Borough School District’s financial performance provides an overall review of the District’s financial activities for the fiscal year ended June 30, 2014. The intent of this discussion and analysis is to look at the District’s financial performance as a whole; readers should also review the transmittal letter, notes to the basic financial statements and financial statements to enhance their understanding of the District’s financial performance.

The Management Discussion and Analysis (MD&A) is an element of the new reporting model adopted by the Governmental Accounting Standards Board (GASB) in their Statement No. 34 “Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments,” issued June 1999. Certain comparative information between the current year and the prior year is required to be presented in the MD&A to present the School District’s financial performance as a whole.

FINANCIAL HIGHLIGHTS

The trends of prior years indicated that during the fiscal year 2013-2014 the Columbia Borough School District would experience another year of increases in the costs for instruction for special education. The State funding for special education remained flat for the sixth year in a row. In addition, the increasing annual contribution rate to fund the Public School Employees Retirement System (PSERS) continues to be an additional drain on the financial resources of all schools in Pennsylvania.

The District completed the fiscal year 2013-2014 with total assets exceeding total liabilities by $13,417,640 a total overall decrease of $833,610. • The governmental activities total net position decreased by $890,675, which was due to depreciation of noncurrent assets as well as general business operations. • The District business-type activities, which are comprised of the Food Service fund, showed an increase of $57,065, which was a result of operation although there were transfers in funding from the General Fund of $34,265. • At the end of the current fiscal year, the unassigned fund balance of the General Fund was $541,068 compared to the prior year of $372,721. The increase in unassigned fund balance represents a small increase due to general operations. • The Board understands that the policy of the District targets an unassigned fund balance to within 5% or as high as 8%. The 2014-2015 budget requires that an amount of $643,497 must be assigned as the budget plan anticipates this use.

USING THE COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR)

This annual report consists of two distinct series of financial statements: government-wide and fund.

The first two statements – the Statement of Net Position and the Statement of Activities - provide both long-term and short-term information about the District’s overall financial status.

F - 3 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

USING THE COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) continued

The remaining statements (fund) focus on individual parts of the District’s operations in more detail than the government-wide statements. The governmental funds statements tell how general District services were financed in the short term as well as what remains for future spending. Proprietary fund statements offer short- and long-term financial information about the activities that the District operates like a business. The District’s proprietary fund is our Food Service Fund. Fiduciary fund statements provide information about financial relationships where the District acts solely as a trustee or agent for the benefit of others, to whom the resources in question belong.

The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data.

Figure A-1 shows how the required parts of the Financial Section are arranged and relate to one another:

Figure A-1 Required components of Columbia Borough School District’s Financial Report

Management Basic Supplementary Discussion and Financial Information Analysis Statements

Government-

Fund Notes to the wide Financial Financial Financial Statements Statements Statements

Figure A-2 summarizes the major features of the District’s financial statements, including the portion of the District they cover and the types of information they contain. The remainder of this overview section of management discussion and analysis explains the structure and contents of each of the statements.

F - 4 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

USING THE COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) continued

Figure A-2 Major Features of Columbia Borough School District’s Government-wide and Fund Financial Statements Fund Statements Government- Governmental wide Statements Funds Proprietary Fiduciary Funds Funds Scope Entire District The activities of the Activities the Instances in which (except fiduciary District that are not District the District is the funds) proprietary or operates trustee or agent to fiduciary, such as similar to someone else’s education, private resources – administration and business – Scholarship Funds community services Food Services and Student Activity Funds Required financial Statement of net Balance Sheet Statement of Statement of statements position Statement of net position fiduciary net Statement of revenues, Statement of position activities expenditures, and revenues, Statement of changes in fund expenses and changes in balance changes in net fiduciary net position position Statement of cash flows Accounting basis Accrual Modified accrual Accrual Accrual and accounting and accounting and accounting and accounting and measurement economic current financial economic economic focus resources focus resources focus resources resources focus focus Type of All assets, Generally, assets All assets, All assets, asset/deferred deferred and deferred deferred deferred outflows of outflows of outflows of outflows of outflows of resources/liability/ resources, resources expected resources, resources (if deferred liabilities, and to be used up and liabilities and any), liabilities, inflows of deferred liabilities and deferred and deferred resources inflows of deferred inflows of inflows of inflows of information resources both resources that come resources, both resources (if any) financial and due or available financial and both short-term capital, during the year or capital, and and long-term; short-term and soon thereafter; short-term and funds do not long-term no capital assets or long-term currently contain long-term liabilities capital assets, included although they can

Type of inflow- All revenues and Revenues for which All revenues All additions and outflow expenses during cash is received and expenses deductions during information year, regardless during or soon after during year, the year, of when cash is the end of the year; regardless of regardless of received or paid expenditures when when cash is when cash is goods or services received or received or paid have been received paid and the related liability is due and payable

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COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

OVERVIEW OF FINANCIAL STATEMENTS

Government-wide Statements

The government-wide statements report information about the District as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all of the government’s assets and liabilities. All of the current year’s revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid.

The two government-wide statements report the District’s net position and how they have changed. Net position, the difference between the District’s assets and liabilities, are one way to measure the District’s financial health or position.

Over time, increases or decreases in the District’s net position are an indication of whether its financial health is improving or deteriorating, respectively.

The government-wide financial statements of the District are divided into two categories:

• Governmental activities – All of the District’s basic services are included here, such as instruction, administration and community services. Property and other taxes, state and federal subsidies and grants finance most of these activities. • Business type activities –The District operates a food service operation and charges fees to staff, students and visitors to help it cover the costs of the food service operation.

Fund Financial Statements

The District’s fund financial statements, which begin on Page F - 22, provide detailed information about the most significant funds – not the District as a whole. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the District can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Some funds are required by state law and by bond requirements.

Governmental funds – Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements use the modified accrual basis of accounting and focus on near-term inflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the District’s near-term financing requirements. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General and Debt Service Funds, both of which are considered to be major funds. Major funds are funds whose revenues, expenditures/expenses, assets, or liabilities (excluding extraordinary items) are at least 10 percent of corresponding totals for all governmental or enterprise funds and at least 5 percent of the aggregate amount for all governmental and enterprise funds. The District has determined that the General Fund and Debt Service Fund meet this definition but believe the Capital Projects Fund also provides useful data, so these three funds are considered Major Funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements and schedules. The relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds is reconciled in the financial statements.

F - 6 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

OVERVIEW OF FINANCIAL STATEMENTS continued

Proprietary funds – These funds are used to account for the District activities that are similar to business operations in the private sector; or where the reporting is on determining net income, financial position, changes in financial position, and a significant portion of funding through user charges. When the District charges customers for services it provides – whether to outside customers or to other units in the District – these services are generally reported in proprietary funds. The Food Service Fund is the District’s proprietary fund and is the same as the business-type activities we report in the government- wide statements, but provide more detail and additional information, such as cash flow, as shown on Pages F-30 through F-32.

Fiduciary funds – The District is the trustee, or fiduciary, for some scholarship and agency funds. All of the District’s fiduciary activities are reported in separate Statement of Fiduciary Net Position on Page F-33. We exclude these activities from the District’s other financial statement because the District cannot use these assets to finance its operations.

FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE

The District’s total net position was $13,417,640 as of June 30, 2014.

Table A-1 Fiscal Year Ended June 30, Net Position

2014 2013

Governmental Business-type Governmental Business-type Activities Activities Total Activities Activities Total Current Assets $5,924,591 $192,331 $6,116,922 $6,965,535 $98,802 $7,064,337 Capital assets 36,289,848 8,702 36,298,550 37,386,160 11,289 37,397,449 Total assets 42,214,439 201,033 42,415,472 44,351,695 110,091 44,461,786

Deferred outflow of Resources 138,917 0 138,917 0 0 0

Current Liabilities 3,540,555 98,047 3,638,602 3,905,565 64,170 3,969,735 Long-term liabilities 25,498,147 0 25,498,147 26,240,801 0 26,240,801 Total Liabilities 29,038,702 98,047 29,136,749 30,146,366 64,170 30,210,536

Net Position Net investment In capital assets 10,076,984 8,702 10,085,686 10,037,094 11,289 10,048,383

Restricted 640,238 0 640,238 858,143 0 858,143 Unrestricted 2,597,432 94,284 2,691,716 3,310,092 34,632 3,344,724 Total Net Position $13,314,654 $102,986 $13,417,640 $14,205,329 $45,921 $14,251,250

Most of the District’s net position is invested in capital assets (buildings, land, and equipment). The remaining unrestricted net position is a combination of assigned and unassigned amounts. The restricted balances are amounts set-aside to fund future purchases or capital projects as planned by the district.

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COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE continued

The results of this year’s operations as a whole are reported in the Statement of Activities on Page F – 21. All expenses are reported in the first column. Specific charges, grants, revenues and subsidies that directly relate to specific expense categories are represented to determine the final amount of the District’s activities that are supported by other general revenues. The two largest general revenues are the Basic Education Subsidy provided by the State of Pennsylvania, and the local taxes assessed to community taxpayers.

Table A-2 takes the information from that Statement and rearranges it slightly in an effort to show the reader the district’s total revenues and expenses for the year.

Table A-2 Fiscal Year Ended June 30, Changes in Net Position 2014 2013 Business- Business- Governmental type Governmental type Activities Activities Total Activities Activities Total Revenues Program Revenues Charges for Services $68,566 $290,939 $359,505 $78,621 $183,636 $262,257 Operating grants and contributions 3,686,611 646,088 4,332,699 3,754,582 624,662 4,379,244 Capital grants and contributions 731,106 -- 731,106 720,197 -- 720,197 General Revenues Property taxes 8,920,285 -- 8,920,285 8,456,873 -- 8,456,873 Other taxes 926,278 -- 926,278 926,543 -- 926,543 Grants, Subsidies and contributions, unrestricted 6,906,925 -- 6,906,925 6,776,203 -- 6,776,203 Other 40,150 163 40,313 63,744 244 63,988 Total revenues $21,279,921 $937,190 $22,217,111 $20,776,763 $808,542 $21,585,305

Expenses Instruction $14,664,112 -- $14,664,112 $13,854,381 -- $13,854,381 Instructional student support 1,826,777 -- 1,826,777 1,817,312 -- 1,817,312 Administrative and financial support 1,895,704 -- 1,895,704 1,665,302 -- 1,665,302 Operation and maintenance of plant 1,743,662 -- 1,743,662 1,562,826 -- 1,562,826

F - 8 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE continued

Table A-2 continued Fiscal Year Ended June 30, Changes in Net Position 2014 2013 Business- Business- Governmental type Governmental type Activities Activities Total Activities Activities Total Expenses (continued) Pupil Transportation 297,644 -- 297,644 354,106 -- 354,106 Student Activities 455,163 -- 455,163 450,470 -- 450,470 Community Services 32,128 -- 32,128 28,106 -- 28,106 Interest on long- -- -- term debt 1,196,039 1,196,039 1,059,622 1,059,622 Unallocated depreciation expense 25,102 -- 25,102 24,972 -- 24,972 Food Services -- 914,390 914,390 -- 856,877 856,877 Total expenses $22,136,331 $914,390 $23,050,721 $20,817,097 $856,877 $21,673,974

Increase (decrease) in net position ($856,410) $22,800 ($833,610) ($40,334) ($48,335) ($88,669)

Transfers (34,265) 34,265 -- (84,029) 84,029 -- (833,610) Change in net (890,675) 57,065 (124,363) 35,694 (88,669) Position Beginning net position 14,205,329 45,921 14,251,250 14,329,692 10,227 14,339,919 Ending net position $13,314,654 $102,986 $13,417,640 $14,205,329 $45,921 $14,251,250

Special education costs increased in 2014 without any increase in State subsidy to support these operations. On the whole, the regular operations of the district changed mostly from an increase in the state retirement system employer charges and charter school tuition payments from fiscal year end 2013 to fiscal year end 2014. As a result, the change in net position reduced the overall ending net position.

Business-type activities revenue continues to shift from charges for services to operating grants and contributions. This is a result of more students qualifying for the National School Lunch Program free and reduced reimbursement program and less paying full price for meals. The District entered into a contract with the local Head Start Unit and now provides meals on a contract basis. This increased charges for services with a related increase in food costs. As a result, the change in net position shows an increase. The school board transferred $34,265 to assist with start-up costs, but it was less than half of the amount needed for transfer in the prior year.

The tables below present the expenses of both the Governmental Activities and the Business-type Activities of the District. Table A-3 shows the District's eight largest functions - instruction, instructional student support, administrative, operation and maintenance of plant, pupil transportation, student activities, community services, as well as each program's net cost (total cost less revenues generated by the activities). This table also shows the net costs offset by the other unrestricted grants, subsidies and contributions to show the remaining financial needs supported by local taxes and other miscellaneous revenues.

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COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE continued

Table A-3 Fiscal Year Ended June 30, Governmental Activities

2014 2013

Functions/Programs Total Cost of Net Cost of Total Cost of Net Cost of Services Services Services Services Instruction $14,664,112 $11,509,334 $13,854,381 $10,611,937 Instructional student support 1,826,777 1,582,896 1,817,312 1,568,280 Administrative 1,895,704 1,760,635 1,665,302 1,560,657 Operation and maintenance 1,743,662 1,627,497 1,562,826 1,463,772 Pupil transportation 297,644 282,703 354,106 326,034 Student activities 455,163 382,157 450,470 353,980 Community services 32,128 14,791 28,106 14,640, Interest on long-term debt 1,196,069 464,933 1,059,622 339,425 Unallocated depreciation expense 25,102 25,102 24,972 24,972 Total governmental activities $22,136,331 17,650,048 $20,817,097 16,263,697 Less: Unrestricted grants, subsidies 6,906,925 6,776,203 Total needs from local Taxes and other revenues $10,743,123 $9,487,494

Debt principal is not reflected in the Governmental Activities statement. All capital grants and contributions received have been applied against the interest on long-term debt.

While the district did realize overall increases in unrestricted grants and subsidies, specific subsidy increases/(decreases) are proportional to costs of services. Other amounts were increased resulting in an increased net cost of services of $1,255,629 creating an increased reliance on local taxes and other revenues.

Table A-4 reflects the activities of the Food Service program, the only Business-type activity of the District.

Table A-4 Fiscal Year Ended June 30,

Business-type Activities 2014 2013

Functions/Programs Total Cost of Net Cost of Total Cost of Net Cost of Services Services Services Services Food Services $914,390 $22,637 $856,877 $48,579 Less: Investment earnings 163 244 Total business-type activities $22,474 $48,335

The financial decrease in the net cost of services was a direct result of the new contract for services with Head Start.

The Statement of Revenues, Expenses and Changes in Fund Net Position for this proprietary fund will further detail the actual results of operations.

F - 10 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

THE DISTRICT FUNDS

At June 30, 2014, the District governmental funds reported a combined total fund balance of $2,749,671, which is a decrease of $929,672. The District planned to use $216,157 to perform the capital improvements throughout the district. The District also planned to use $100,000 of the fund balance to assist in offsetting some of the increased employer pension costs. In planning the budget for 2014, the District expected to spend down the existing fund balance by $718,190 to help maintain programs during the anticipated increased costs in special education and charter school tuitions.

General Fund Budget

The District’s General Fund budget is prepared according to Pennsylvania law and is based on accounting for certain transactions on a basis of cash receipts, disbursements, and encumbrances. The only fund for which a budget is legally required is the General Fund.

During the fiscal year, the Board of School Directors (the Board) authorizes revisions to the original budget to accommodate differences from the original budget to the actual expenditures of the District. The budget system is designed to tightly control budgets by making administrators responsible for their individual budget areas. All adjustments are again confirmed at the time the annual audit is accepted, which is after the end of the fiscal year, which is not prohibited by state law. A schedule showing the District's original and final budget amounts compared with amounts actually paid and received is provided on Pages F-28 through F-29.

The District applies for federal, state, and local grants and these grants cannot always be anticipated in the budgeting process. In accordance with the Pennsylvania law, these awarded amounts may revise the original budget during the fiscal year to account for the new revenue and matching expenditures to allow for funds to be expended.

Transfers between specific categories of expenditures/financing uses occur during the year. The most significant transfers occur from the budget reserve category to specific expenditure areas and transfers from the General Fund to the Debt Service Fund for payment of debt.

The Budgetary Reserve includes amounts that will be funded by assigned fund balance for planned opportunities of expenditures for improvements/enhancements to the District operations. These amounts will only be appropriated into expenditure categories if the fiscal results of the prior year-end with a positive addition to fund balance, which exceeds the total of these projected expenditures. The Board is using this method of budgeting to control tax increases while also protecting the integrity of the fund balance.

Capital Projects Fund

At fiscal year ended June 30, 2014, the Capital Projects fund balance was $629,014. During the year, capital improvements to the telephone system and some building maintenance needs were completed resulting in a net reduction to the fund of $214,434. This fund generally maintains a balance of approximately $100,000 to $200,000 for unanticipated one-time capital expenditures as needed to keep the District facilities maintained. The District has maintained a higher balance to help offset debt service increases if needed.

F - 11 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

THE DISTRICT FUNDS continued

Internal Service Fund

The District accounts for actual health premiums and claims of employees through an Internal Service Fund. The net position as of June 30, 2013 was $473,140. The net position as of June 30, 2014 is $361,643 as health care claims were higher than the prior year. Additional information about the Districts self-insured health benefits is contained in Note 9, Page F-49.

CAPITAL ASSET AND DEBT ADMINISTRATION

CAPITAL ASSETS

At June 30, 2014, the District had $36,298,550 invested in a broad range of capital assets, including land, buildings and furniture and equipment. This amount represents a net decrease (including additions, deletions and depreciation) of $1,098,899 from last year.

Table A-5 reflects the capital assets of both the governmental activities and the business-type activities of the District.

Table A-5 Governmental and Business-Type Activities Fiscal Year Ended June 30, Capital assets - net of depreciation

2014 2013

Governmental Business-type Governmental Business-type Activities Activities Activities Activities Land $4,200 -- $4,200 -- Site Improvements (Net of accumulated depreciation) 1,114,097 -- 1,176,843 -- Building and Building Improvements (Net of accumulated depreciation) 34,656,451 -- 35,652,373 -- Furniture & Equipment (Net of accumulated depreciation) 515,100 8,702 552,744 11,289 Total $36,289,848 $8,702 $37,386,160 $11,289

The change is due to normal depreciation of capital assets. Additional information about the Districts capital assets is contained in Note 6, Pages F-46 and F-47.

F - 12 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

DEBT ADMINISTRATION

As of July 1, 2013, the District’s governmental activities had total outstanding bond principal of $27,680,000. This debt consisted of a General Obligation Bond, Series of 2009 for $6,805,000, General Obligation Bond, Series of 2009A for $9,230,000 and a General Obligation Bond, Series 2010 for $11,645,000.

During the year, the District chose to refund the General Obligation Bonds, Series of 2009 and 2009A and issued two new General Obligation Bonds, Series 2013 and 2014, for a net decrease in principal of $215,000 The District made scheduled payments of principal of $950,000 resulting in ending outstanding debt as of June 30, 2014 of $26,515,000:

Table A-6 Outstanding Debt

2014 2013 General Obligation Notes/Bonds: - Bonds, Series of 2014 6,425,000 -- - Bonds, Series of 2013 8,780,000 -- - Bonds, Series of 2010 11,310,000 $11,645,000 - Bonds, Series of 2009A -- 9,230,000 - Bonds, Series of 2009 -- 6,805,000 Total $26,515,000 $27,680,000

Other obligations include accrued vacation pay and sick leave for specific employees of the District. More detailed information about our long-term liabilities is included in Note 7 to the financial statements.

ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES

The District's general obligation bond rating issued by Standard and Poor’s (S&P) on January 22, 2014 is Unenhanced Rating A+(SPUR)/Stable, School Issuer Credit Rating A+/Stable. The “A” enhanced rating is based upon the additional security for bonds provided by the Commonwealth of Pennsylvania Act 150 School District Intercept Program. The Act provides for undistributed state aid to be diverted to bond holders in the event of default. In addition, the Series 2010 Bonds are insured by Assured Guaranty Municipal Corp. (formerly known as Financial Security Assurance Inc.) with a current financial strength rating of “AA” (stable outlook) by S&P and “A2” (stable outlook) by Moody’s Investors Service, Inc. The Series 2013 and 2014 Bonds are insured by Build America Mutual (BAM) which has a rating of S&P AA Stable, no Moody’s rating.

The District does not expect significant real estate development growth in the near future given the residential nature of the local community and a lack of developable land within the District. There is a 57 acre property that was an airstrip available for sale that is zoned industrial.

The Borough of Columbia had properties included in the State Program – Keystone Opportunity Zones (KOZ). Properties identified in these “zones” receive forgiveness for real property tax and business gross receipts taxes for a period of 13 years. In the year 2000, the Borough had 10 properties listed within these zones. Some properties were already tax exempt, but three of the properties received exemption from school property taxes with a total assessed value of $105,100 or approximately $2,000 in lost tax revenue. In April 2004, the Borough added 16 additional properties to this program. The total assessed value of these properties was $2,853,700 resulting in future loss of tax revenue of $54,220 for the remaining years of the program to fiscal year 2013- 2014. The tax loss has not had a detrimental effect on the District finances because those properties have not been included for a number of years. The purpose of this program is to provide incentive for businesses to start up or move in to the community. This has occurred and assessed values have increased as a result of this development opportunity. Those assessed values are taxable in 2014-2015, and based on the current millage rate of 28.2 mills, the new tax revenue is $141,132.

F - 13 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES continued

The revenue budget for the 2014-2015 year is $958,671 more than the original budget for 2013-2014. The majority of this increase is due to increases in local property tax together with a new State Block Grant, Ready to Learn. Columbia has relied on the State’s subsidy programs to reduce the impact of education on taxpayers. This new block grant was the only new money provided. Special Education continues to be an ever-increasing expense for the District, and this particular funding source has had no State subsidy increase in the last six years.

The expenditure budget for the 2014-2015 year is $69,353 more than the original budget for 2013-2014, or a less than 1% increase. The reconfiguration of buildings and grade levels along with retirements of staff not replaced is directly related to offsetting the increased budget costs for special education. The district continues to reduce staff through attrition to limit more of an impact.

The comparison of revenue and expenditure categories is as follows:

Table A-7

BUDGETED REVENUES 2014-2014 2013-2014 Local 48.4% 48.7% State 48.5% 48.2% Federal/Other 3.1% 3.1%

F - 14 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

Economic factors and next year’s budgets and rates - continued

BUDGETED EXPENDITURES 2014-2015 2013-2014 Instruction 59.0% 59.0% Support Services 24.6% 24.6% Non-Instruction/Community 2.4% 2.4% Fund Transfers/Debt/Reserves 14.0% 14.0%

Instruction 80.0% 59.0% 59.0% 60.0% Support Services 40.0% 24.6% 24.6% 14.0% 14.0% Non-Instruction/Community 20.0% 2.4% 2.4% 0.0% .Fund Tr./Debt/Res 2014-2015 2013-2014

OTHER POST EMPLOYMENT BENEFITS

In an effort to value the potential liability for future reporting purposes, the District contracted with Conrad Siegel Actuaries to update the Actuarial Valuation for Other Post Employment Benefits (OPEB) effective September 1, 2013 in accordance with GASB Statement No. 45, effective September 1, 2006. The purpose of this valuation was to determine the total liability and the annual required contribution (ARC) should the district decide to fund this liability through a separate trust fund. As of September 1, 2013, the District ARC is $219,793 which is $29,880 more than the original valuation from September 1, 2006. This new value represents 2.76% of payroll as of this valuation which is an increase of .36 % from the last evaluation. The amount reflected on the Statement of Net Position Page F-19 reflects the Noncurrent Liability of $394,804. The District chose not to establish a trust fund for funding this liability at this time, but may review this for future financial consideration.

FUTURE ECONOMIC FACTORS

On June 27, 2006, the Pennsylvania legislature passed Act 1 of Special Session 2006, entitled the “Taxpayer Relief Act” (hereinafter “Act 1”). Act 1 requires school districts to limit tax increases to the level set by an inflation index unless the tax increase is approved by voters in a referendum or the school district obtains approval from the Department of Education for certain referendum exceptions. The established inflation index is adjusted for certain schools based on low wealth factors. Columbia’s index for 2014-2015 is 2.8% while the base index is 1.9%.

Referendum exceptions are built into Act 1 should a district need to raise taxes beyond the new inflationary index cap. The exception categories provide partial relief for increases in the cost of special education, retirement expenses, and some school construction projects in the form of allowing property tax increases over the index.

The District did not raise taxes above the index in 2014-2015. The maximum millage based on the index was .848 mills. The tax rate increased from 27.37 mills to 28.2 mills, and still the district needed to utilize fund balance to balance the budget. The state has established a new formula for distributing special education subsidy but it is only on “new” money added to that subsidy in the state budget. The State has not increased funding for special education in seven years, so the result is an increase in local property taxes.

F - 15 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

FUTURE ECONOMIC FACTORS continued

For the 2015-2016 budget year, the index for Columbia will be reduced to 2.8% while the base index decreases to 1.9%. Referendum exceptions are permitted again for certain expenditures. If the District determines that an increase higher than the index and the exceptions is necessary, a referendum tax question is placed on the primary election ballot. Should this referendum fail, the District would be forced to cut or reduce programs from the budget. To date, the District has never presented a referendum ballot question and does not anticipate a referendum for 2015-2016.

While the revenue sources of the district continue with minimal, if any, increases, additional pressure is placed on management to control expenditures. The continuing forecasted increase in the employer share of retirement challenges the future financial status. It is anticipated that attrition of staff due to retirements in 2015 will provide some relief. The State continues to discuss legislative actions related to the retirement system which will be factored into future financial planning.

The District participates in a joint venture with the fifteen other public school districts in Lancaster County in the Lancaster County Career and Technology Center (LCCTC). The financial support of the LCCTC is prorated among the sixteen school districts. The LCCTC had obtained approval from all districts to issue bonds through the LCCTC Authority for renovations. The district will provide financial payments and receive state reimbursement on the payments of the bonds to be issued over a three-year period – 2012, 2013 and 2014. The new bonds are structured so that the financial support from the District for the new issues will only obligate the District to continue to provide annual financial payments at the same level as in prior years. The estimated gross annual payment for the District will continue in the amount of $21,000, and after estimated state subsidy, the estimated net payment annually should be $9,000.

CONTACTING THE DISTRICT FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, taxpayers, parents, students, investors and creditors with a general overview of the District's finances and to show the Board's accountability for the money it receives. If you have questions about this report or wish to request additional financial information, please contact Laura E. Cowburn, PRSBA, Assistant to the Superintendent for Business Services/Board Secretary at Columbia Borough School District, 200 North Fifth Street, Columbia, PA 17512, (717) 684-2283.

F - 16

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

JUNE 30, 2014

BASIC FINANCIAL STATEMENTS

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F - 18

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

STATEMENT OF NET POSITION JUNE 30, 2014

Governmental Business-Type Activities Activities Total ASSETS Current Assets Cash and Cash Equivalents $ 3,667,352 $ 96,139 $ 3,763,491 Investments 223,303 6,287 229,590 Taxes Receivable, Net 815,145 -- 815,145 Due from Other Governments 1,028,624 82,526 1,111,150 Other Receivables 75,971 -- 75,971 Inventories -- 7,379 7,379 Prepaid Expenses 114,196 -- 114,196 Total Current Assets 5,924,591 192,331 6,116,922 Noncurrent Assets Land 4,200 -- 4,200 Site Improvements (Net of Accumulated Depreciation) 1,114,097 -- 1,114,097 Building and Building Improvements (Net of Accumulated Depreciation) 34,656,451 -- 34,656,451 Furniture and Equipment (Net of Accumulated Depreciation) 515,100 8,702 523,802 Total Noncurrent Assets 36,289,848 8,702 36,298,550 TOTAL ASSETS 42,214,439 201,033 42,415,472 DEFERRED OUTFLOWS OF RESOURCES Bond Refinancing Charges 138,917 -- 138,917 Total Deferred Outflows of Resources 138,917 -- 138,917 TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES $ 42,353,356 $ 201,033 $ 42,554,389

LIABILITIES Current Liabilities Internal Balances $ (85,317) $ 85,317 $ -- Due to Other Governments 39,004 510 39,514 Accounts Payable 307,681 -- 307,681 Current Portion of Long-Term Debt 1,300,000 -- 1,300,000 Current Portion of Compensated Absences 21,164 -- 21,164 Accrued Salaries and Benefits 1,519,233 9,536 1,528,769 Payroll Deductions and Withholdings 201,737 -- 201,737 Unearned Revenues 72,633 2,684 75,317 Other Current Liabilities 164,420 -- 164,420 Total Current Liabilities 3,540,555 98,047 3,638,602 Noncurrent Liabilities Bonds and Notes Payable, Net 24,912,864 -- 24,912,864 Long-Term Portion of Compensated Absences 190,479 -- 190,479 Other Post-Employment Benefits 394,804 -- 394,804 Total Noncurrent Liabilities 25,498,147 -- 25,498,147 TOTAL LIABILITIES 29,038,702 98,047 29,136,749 NET POSITION Net Investment in Capital Assets 10,076,984 8,702 10,085,686 Restricted for Capital Projects 634,611 -- 634,611 Athletics 2,675 -- 2,675 Debt Service 2,952 -- 2,952 Unrestricted 2,597,432 94,284 2,691,716 TOTAL NET POSITION 13,314,654 102,986 13,417,640 TOTAL LIABILITIES AND NET POSITION $ 42,353,356 $ 201,033 $ 42,554,389

The accompanying notes are an integral part of these financial statements.

F - 19

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F - 20 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2014

Net (Expense) Revenue and Program Revenues Changes in Net Position Charges Operating Capital Business- for Grants and Grants and Governmental Type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental Activities Instruction $ 14,664,112 $ 7,325 $ 3,147,453 $ -- $ (11,509,334) $ -- $ (11,509,334) Instructional Student Support 1,826,777 -- 243,881 -- (1,582,896) -- (1,582,896) Administrative and Financial Support Services 1,895,704 -- 135,069 -- (1,760,635) -- (1,760,635) Operation and Maintenance of Plant Services 1,743,662 32,110 84,055 -- (1,627,497) -- (1,627,497) Pupil Transportation 297,644 -- 14,941 -- (282,703) -- (282,703) Student Activities 455,163 29,131 43,875 -- (382,157) -- (382,157) Community Services 32,128 -- 17,337 -- (14,791) -- (14,791) Interest on Long-Term Debt 1,196,039 -- -- 731,106 (464,933) -- (464,933) Unallocated Depreciation Expense* 25,102 ------(25,102) -- (25,102) Total Governmental Activities 22,136,331 68,566 3,686,611 731,106 (17,650,048) -- (17,650,048)

F Business-Type Activities

- Food Services 914,390 290,939 646,088 -- -- 22,637 22,637

21 Total Primary Government $ 23,050,721 $ 359,505 $ 4,332,699 $ 731,106 (17,650,048) 22,637 (17,627,411)

General Revenues Taxes Property Taxes, Levied for General Purposes, Net 8,920,285 -- 8,920,285 Public Utility Realty, Earned Income and Per Capita Taxes Levied for Specific Purposes, Net 926,278 -- 926,278 Grants, Subsidies, and Contributions Not Restricted 6,906,925 -- 6,906,925 Investment Earnings 18,434 163 18,597 Miscellaneous Income 21,716 -- 21,716 Total General Revenues 16,793,638 163 16,793,801 Transfers (34,265) 34,265 -- Change in Net Position (890,675) 57,065 (833,610) Net Position – July 1, 2013 14,205,329 45,921 14,251,250 Net Position – June 30, 2014 $ 13,314,654 $ 102,986 $ 13,417,640

*This amount excludes the depreciation that is included in the direct expenses of the functions presented.

The accompanying notes are an integral part of these financial statements.

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2014

Major Funds Capital Debt Total General Projects Service Governmental Fund Fund Fund Funds ASSETS Cash and Cash Equivalents $ 3,100,468 $ 563,932 $ 2,952 $ 3,667,352 Investments 101,064 122,239 -- 223,303 Taxes Receivable (Net) 815,145 -- -- 815,145 Due from Other Funds 120,595 -- -- 120,595 Due from Other Governments 1,028,624 -- -- 1,028,624 Other Receivables 28,821 -- -- 28,821 Prepaid Expenditures 24,868 -- -- 24,868

TOTAL ASSETS $ 5,219,585 $ 686,171 $ 2,952 $ 5,908,708

LIABILITIES Due to Other Funds $ 468,138 $ 34,778 $ -- $ 502,916 Due to Other Governments 39,004 -- -- 39,004 Accounts Payable 151,521 22,379 -- 173,900 Accrued Salaries and Benefits 1,519,233 -- -- 1,519,233 Payroll Deductions and Withholdings 201,737 -- -- 201,737 Unearned Revenue - Other 53,269 -- -- 53,269

TOTAL LIABILITIES 2,432,902 57,157 -- 2,490,059

DEFERRED INFLOWS OF RESOURCES Unavailable Revenue – Property Taxes 668,978 -- -- 668,978

TOTAL DEFERRED INFLOWS OF RESOURCES 668,978 -- -- 668,978

FUND BALANCES Nonspendable 24,868 -- -- 24,868 Restricted 8,272 629,014 2,952 640,238 Committed 900,000 -- -- 900,000 Assigned 643,497 -- -- 643,497 Unassigned 541,068 -- -- 541,068

TOTAL FUND BALANCES 2,117,705 629,014 2,952 2,749,671

TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 5,219,585 $ 686,171 $ 2,952 $ 5,908,708

The accompanying notes are an integral part of these financial statements.

F - 22

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30, 2014

Total Fund Balances – Governmental Funds $ 2,749,671

Amounts reported for governmental activities in the statement of net position are different because:

Capital Assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. The cost of assets is $49,502,909, and the accumulated depreciation is $13,213,061. 36,289,848

Property taxes receivable will be collected this year, but are not available soon enough to pay for the current period’s expenditures, and therefore are deferred in the funds. 668,978

Bond discounts, and similar items are reported in the governmental funds when debt is first issued. The statement of net position reports these items as assets or liabilities with amortization over the life of the related debt. Bond discount totaled $568,063 with accumulated amortization of $265,927. Bond refinancing charges totaled $149,695 with related accumulated amortization of $10,778. 441,053

Bond insurance costs are reported as an expenditure in governmental funds when debt is first issued. Bond insurance costs are reported as prepaid expenses on the statement of net position and expensed in a rational systematic manner over the life of the related debt. 89,328

Long-term liabilities, including bonds payable, are not due and payable in the current period, and therefore are not reported as liabilities in the funds. Long-term liabilities at year-end consist of:

Bonds/notes payable $ (26,515,000) Accrued interest on the bonds/notes (164,420) Compensated absences (211,643) Other post-employment benefits (394,804) (27,285,867)

Internal service fund is used to account for medical insurance claims and premiums. The assets and liabilities of the internal service fund are included in governmental activities in the statement of net position. 361,643

TOTAL NET POSITION – GOVERNMENTAL ACTIVITIES $ 13,314,654

The accompanying notes are an integral part of these financial statements.

F - 23 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014

Major Funds Capital Debt Total General Projects Service Governmental Fund Fund Fund Funds

REVENUES Local Sources Real Estate Taxes and Penalties $ 8,872,885 $ -- $ -- $ 8,872,885 Other Taxes 926,278 -- -- 926,278 Interest 16,711 1,723 -- 18,434 Revenue from Intermediate Sources 373,079 -- -- 373,079 Tuition 7,325 -- -- 7,325 Revenue from District Activities 39,673 -- -- 39,673 Other Revenue 75,279 -- -- 75,279 Refund of Prior Year’s Expenditures 34,553 -- -- 34,553

Total Local Sources 10,345,783 1,723 -- 10,347,506

State Sources 10,243,894 -- -- 10,243,894 Federal Sources 641,121 -- -- 641,121

TOTAL REVENUES 21,230,798 1,723 -- 21,232,521

EXPENDITURES Current Instruction 13,503,600 -- -- 13,503,600 Support Services 5,327,315 57,318 135,450 5,520,083 Operation of Non-Instructional Services 457,091 -- -- 457,091

Total Current 19,288,006 57,318 135,450 19,480,774

Capital Outlay Facilities, Acquisition, Construction and Improvement Services -- 158,839 -- 158,839

Total Capital Outlay -- 158,839 -- 158,839

Debt Service Principal -- -- 8,525,000 8,525,000 Interest and Fiscal Charges -- -- 1,032,145 1,032,145

Total Debt Service -- -- 9,557,145 9,557,145

TOTAL EXPENDITURES 19,288,006 216,157 9,692,595 29,196,758

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 1,942,792 (214,434) (9,692,595) (7,964,237)

F - 24 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014

Major Funds Capital Debt Total General Projects Service Governmental Fund Fund Fund Funds

OTHER FINANCING SOURCES (USES) Transfers In -- -- 2,626,717 2,626,717 Transfers Out (2,660,982) -- -- (2,660,982) Refunding Bonds Issued -- -- 15,820,000 15,820,000 Discount on Refunded Bonds -- -- (141,475) (141,475) Payment to Refunded Bond Escrow Agent -- -- (8,609,695) (8,609,695)

TOTAL OTHER FINANCING SOURCES (USES) (2,660,982) -- 9,695,547 7,034,565

Changes in Fund Balances (718,190) (214,434) 2,952 (929,672)

Fund Balances – July 1, 2013 2,835,895 843,448 -- 3,679,343

Fund Balances – June 30, 2014 $ 2,117,705 $ 629,014 $ 2,952 $ 2,749,671

The accompanying notes are an integral part of these financial statements.

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F - 26 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

RECONCILIATION OF THE GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2014

Total change in fund balances – governmental funds $ (929,672)

Amounts reported for governmental activities in the statement of activities are different because:

Capital outlays are reported in governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which depreciation exceeds capital outlays in the period. Depreciation expense $ (1,342,358) Capital outlays 246,046 (1,096,312)

Because some property taxes will not be collected for several months after the District’s fiscal year ends, they are not considered as “available” revenues in the governmental funds. Unavailable tax revenues decreased by this amount this year. 47,400

Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. 16,985,000

Internal service fund is used to account for medical insurance claims and premiums. The net revenue of certain activities of the internal service fund is reported with governmental activities. (111,497)

The issuance of general obligation bonds provides current financial resources to governmental funds but has no affect on net position. Also, governmental funds report the bond discounts and other similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities: Issuance of general obligation bonds $ (15,820,000) Bond discount 141,475 Bond refinancing charges 149,695 Bond insurance premiums 34,383 Amortization of bond discount (170,273) Amortization of bond refinancing charges (10,778) (15,675,498)

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Decrease in compensated absences 33,088

Bond insurance costs are reported as a prepaid expense on the statement of net position and are expensed in a rational systematic method over the life of the debt. (67,086)

Some expenditures reported in the governmental funds do not require the use of current financial resources, however, the cost of other post-employment benefits are recorded as a noncurrent liability as required by GASB Statement No. 45. (93,327)

OTHER Net change in accrued interest expense on bonds payable 17,229

Change in net position of governmental activities $ (890,675)

The accompanying notes are an integral part of these financial statements.

F - 27 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND YEAR ENDED JUNE 30, 2014

Variance With Actual Final Budget Budgeted Amounts Budgetary Positive Original Final Basis (Negative)

REVENUES Local Revenues Real Estate Taxes and Penalties $ 8,857,264 $ 8,857,264 $ 8,872,885 $ 15,621 Other Taxes 797,000 797,000 926,278 129,278 Interest 70,000 70,000 16,711 (53,289) Revenues from Intermediate Sources 300,000 351,394 373,079 21,685 Tuition 15,000 15,000 7,325 (7,675) Revenue from District Activities 25,000 25,000 39,673 14,673 Other Revenue 50,000 64,250 75,279 11,029 Refund of Prior Year’s Expenditures -- -- 34,553 34,553

Total Local Sources 10,114,264 10,179,908 10,345,783 165,875

State Sources 9,999,670 9,999,670 10,243,894 244,224 Federal Sources 650,000 954,465 641,121 (313,344)

TOTAL REVENUES 20,763,934 21,134,043 21,230,798 96,755

EXPENDITURES Instruction Regular Programs 7,933,068 7,861,658 7,804,363 57,295 Special Programs 4,698,911 5,241,884 5,154,042 87,842 Vocational Education 320,000 296,916 291,032 5,884 Other Instructional Programs 202,601 248,792 243,738 5,054 Nonpublic School Programs 8,500 14,766 10,353 4,413 Refund of Prior Year’s Receipts -- 72 72 --

Support Services Student Services 756,154 812,234 793,779 18,455 Instructional Staff Services 890,927 760,513 713,192 47,321 Administrative Services 1,030,236 1,046,905 1,037,783 9,122 Pupil Health 225,439 266,950 265,269 1,681 Business Services 305,363 328,863 320,625 8,238 Operation and Maintenance of Plant Services 1,652,538 1,605,911 1,564,799 41,112 Student Transportation Services 250,000 300,000 297,644 2,356 Central and Other Support Services 366,052 357,734 334,224 23,510

Operation of Noninstructional Services Student Activities 528,922 446,622 424,963 21,659 Community Services 12,000 41,000 32,128 8,872

TOTAL EXPENDITURES 19,180,711 19,630,820 19,288,006 342,814

EXCESS OF REVENUES OVER EXPENDITURES 1,583,223 1,503,223 1,942,792 439,569

F - 28 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND YEAR ENDED JUNE 30, 2014

Variance With Actual Final Budget Budgeted Amounts Budgetary Positive Original Final Basis (Negative)

OTHER FINANCING SOURCES (USES) Transfers Out (2,666,038) (2,666,038) (2,660,982) 5,056 Budgetary Reserve (450,000) (370,000) -- 370,000

TOTAL OTHER FINANCING SOURCES (USES) (3,116,038) (3,036,038) (2,660,982) 375,056

Changes in Fund Balances (1,532,815) (1,532,815) (718,190) 814,625

Fund Balances – July 1, 2013 2,835,895 2,835,895 2,835,895 --

Fund Balances – June 30, 2014 $ 1,303,080 $ 1,303,080 $ 2,117,705 $ 814,625

The accompanying notes are an integral part of these financial statements.

F - 29 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2014

Business-Type Governmental Activities - Activities - Enterprise Fund Internal Food Service Service Fund

ASSETS Current Assets Cash and Cash Equivalents $ 96,139 $ -- Investments 6,287 -- Inventories 7,379 -- Due from Other Funds -- 464,138 Due from Other Governments 82,526 -- Other Receivables -- 46,650

Total Current Assets 192,331 510,788

Noncurrent Assets Machinery and Equipment (Net of Accumulated Depreciation) 8,702 --

Total Noncurrent Assets 8,702 --

TOTAL ASSETS $ 201,033 $ 510,788

LIABILITIES Current Liabilities Due to Other Funds $ 85,317 $ -- Accounts Payable 510 129,781 Accrued Salaries and Benefits 9,536 -- Unearned Revenue 2,684 19,364

Total Current Liabilities 98,047 149,145

TOTAL LIABILITIES 98,047 149,145

NET POSITION Investment in Capital Assets 8,702 -- Unrestricted 94,284 361,643

TOTAL NET POSITION 102,986 361,643

TOTAL LIABILITIES AND NET POSITION $ 201,033 $ 510,788

The accompanying notes are an integral part of these financial statements.

F - 30

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2014

Business-Type Governmental Activities - Activities - Enterprise Fund Internal Food Service Service Fund

OPERATING REVENUES Health Insurance Premiums $ -- $ 1,917,816 Lunch Sales 143,680 -- Breakfast Sales 4,811 -- Special Function Revenue 20,468 -- Contracted Service Revenue 121,620 -- Miscellaneous Revenue 360 --

TOTAL OPERATING REVENUES 290,939 1,917,816

OPERATING EXPENSES Salaries 309,974 -- Employee Benefits 143,235 -- Purchased Property Services 31,922 -- Other Purchased Services 937 -- Supplies 424,564 -- Dues and Fees 1,171 -- Depreciation 2,587 -- Health Insurance Claims -- 1,762,569 Insurance Expense -- 266,744

TOTAL OPERATING EXPENSES 914,390 2,029,313

OPERATING (LOSS) (623,451) (111,497)

NONOPERATING REVENUES Earnings on Investments 163 -- State Sources 64,639 -- Federal Sources 581,449 --

TOTAL NONOPERATING REVENUES 646,251 --

INCOME (LOSS) BEFORE TRANSFERS 22,800 (111,497)

TRANSFER IN 34,265 --

Changes in Net Position 57,065 (111,497)

Net Position – July 1, 2013 45,921 473,140

Net Position – June 30, 2014 $ 102,986 $ 361,643

The accompanying notes are an integral part of these financial statements.

F - 31 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2014

Business-Type Governmental Activities - Activities - Enterprise Fund Internal Food Service Service Fund

Cash Flows from Operating Activities Cash Received from Users $ 291,744 $ -- Cash Received from Assessments Made to Other Funds 26,530 2,010,277 Cash Payments to Employees for Services (450,882) -- Cash Payments to Suppliers for Goods and Services (402,547) (2,010,277) Cash Payments for Other Operating Expenses (1,171) --

Net Cash (Used for) Operating Activities (536,326) --

Cash Flows from Noncapital Financing Activities State Sources 64,615 -- Federal Sources 525,386 -- Transfer In 34,265 --

Net Cash Provided by Noncapital Financing Activities 624,266 --

Cash Flows from Capital and Related Financing Activities -- --

Cash Flows from Investing Activities Earnings on Investments 163 -- Purchase of Investments (1) --

Net Cash Provided by Investing Activities 162 --

Net Increase in Cash and Cash Equivalents 88,102 --

Cash and Cash Equivalents - Beginning of Year 8,037 --

Cash and Cash Equivalents - End of Year $ 96,139 $ --

Reconciliation of Operating (Loss) to Net Cash (Used for) Operating Activities

Operating (Loss) $ (623,451) $ (111,497)

Adjustments to Reconcile Operating (Loss) to Net Cash (Used for) Operating Activities Depreciation 2,587 -- USDA Donated Commodities 50,754 -- Decrease in Due from Other Funds -- 100,290 Decrease (Increase) in Accounts Receivable 391 (27,193) (Increase) in Inventories (484) -- Increase in Due to Other Funds 29,320 -- Increase (Decrease) in Accounts Payable (14) 19,036 Increase in Accrued Salaries Benefits 2,326 -- Increase in Unearned Revenue 2,245 19,364

Total Adjustments 87,125 111,497

Net Cash (Used for) Operating Activities $ (536,326) $ --

NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES USDA Donated Commodities Received $ 50,820 $ --

The accompanying notes are an integral part of these financial statements.

F - 32

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2014

Private Student Purpose Activities Trust Fund ASSETS Cash and Cash Equivalents $ 3,623 $ 49,179 Investments 6,578 68,724 Due from Other Funds -- 4,000

TOTAL ASSETS $ 10,201 $ 121,903

LIABILITIES Due to Other Funds $ 500 $ -- Due to Student Groups 9,701 --

TOTAL LIABILITIES 10,201 --

NET POSITION Held in Trust for Scholarships -- 61,297 Held in Trust for Music Purposes -- 60,606

TOTAL LIABILITIES AND NET POSITION $ 10,201 $ 121,903

The accompanying notes are an integral part of these financial statements.

F - 33

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2014

Private Purpose Trust Fund

ADDITIONS Earnings on Investments $ 110 Contributions 3,298

TOTAL ADDITIONS 3,408

DEDUCTIONS Scholarships Awarded 2,843

Changes in Net Position 565

Net Position – July 1, 2013 121,338

Net Position – June 30, 2014 $ 121,903

The accompanying notes are an integral part of these financial statements.

F - 34 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Columbia Borough School District operates two elementary schools and one Junior/Senior High School in Lancaster County, Pennsylvania. In July 2014, the District has adopted a reconfiguration to enhance curriculum and learning through an elementary, middle and high school format. The District operates under current standards prescribed by the Pennsylvania Department of Education in accordance with the provision of the School Laws of Pennsylvania. The District operates under a locally elected nine member Board form of government.

The financial statements of Columbia Borough School District (the District) have been prepared in accordance with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the authoritative standard-setting body for the establishment of governmental accounting and financial reporting principles. The more significant of these accounting policies are as follows:

A. Reporting Entity In evaluating the school as a reporting entity, management has addressed all potential component units which may or may not fall within the school's financial accountability. The criteria used to evaluate component units for possible inclusion as part of the school's reporting entity are financial accountability and the nature and significance of the relationship. This report presents the activities of Columbia Borough School District. The school district is not a component unit of another reporting entity, nor does it have any component units.

The following joint ventures are not component units of Columbia Borough School District, and are not included in this report.

Lancaster County Career and Technology Center (LCCTC) - is a separate legal entity. It was organized by the sixteen public school districts in Lancaster County to provide services in the county. Each of the public school districts appoints one member to serve on the joint operating committee, and each has an ongoing financial responsibility to fund the LCCTC.

Lancaster-Lebanon Intermediate Unit #13 (LLIU) - is a separate legal entity. It was organized by the constituent school districts in Lancaster and Lebanon counties to provide services to the school districts. Each member school district appoints one member to serve on the Board of Directors of the LLIU. The district contracts with the LLIU for special education services for district students.

Lancaster County Academy (Academy) - is a separate legal entity. It was organized by eleven public school districts in Lancaster County to provide services in the county. Each of the public school districts appoints one member to serve on the joint operating committee. As a member district the school district has an ongoing financial responsibility to fund the operations of the Academy.

Lancaster County Tax Collection Bureau (the Bureau) - is a separate legal entity. The District participates with fifteen other school districts and eighty-three municipalities for the collection of earned income taxes. Each public school district appoints one member to serve on the joint operating committee with one member from the municipalities represented by each of the sixteen school districts. The Bureau’s operating expenditures are deducted from the distributions which are made monthly. The local municipalities also share the expenditures on the same basis as the school districts.

Lancaster-Lebanon Joint Authority (Joint Authority) - is a separate legal entity. The Joint Authority was incorporated on February 14, 1980 under the Municipality Authorities Act of May 2, 1945, P.L. 382, as amended by the Boards of School Directors of the 22 school districts located in Lancaster and Lebanon counties. The school districts established the Joint Authority for the purpose of acquiring, holding, constructing, improving, maintaining, operating, owning, and/or leasing projects for public school purposes and for purposes of the LLIU. The district did not have any financial transactions with the Joint Authority during the year ended June 30, 2014.

Complete financial statements for each of the entities described above can be obtained from each respective administrative office.

F - 35 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

B. Fund Accounting

The accounts of the school district are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self- balancing accounts which comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as appropriate. Resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent.

C. Basis of Presentation

Government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the governmental funds and internal service fund of the district while the business-type activities include the district’s enterprise fund. Fiduciary funds are excluded from the government- wide financial statements. Interfund accounts receivable, accounts payable and transfers are eliminated in the government-wide financial statements. Internal service fund activity is eliminated to avoid “doubling up” revenues and expenses. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately in the government-wide financial statements from business-type activities, which rely, to a significant extent on fees and charges for support.

The statement of activities presents a comparison between direct expenses and program revenues for business-type activities and for each function of the District’s governmental activities. Direct expenses are those that are clearly identifiable within a specific function or segment. Program revenues include charges to customers who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment. In addition, program revenues include grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Fund financial statements are also provided in the report for all of the governmental funds, proprietary funds, and the fiduciary funds of the school district. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column. Fiduciary funds are reported by fund type.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the proprietary fund’s principal ongoing operations. The principal operating revenues of the school district’s enterprise fund are food service charges. Operating expenses for the school district’s enterprise fund include food production costs, supplies, administrative costs, and depreciation on capital assets. All revenues or expenses not meeting this definition are reported as nonoperating revenues and expenses.

The District reports the following major governmental funds:

The general fund is the District’s primary operating fund. It accounts for all financial resources except those required to be in another fund.

The capital projects fund accounts for financial resources used in the acquisition and construction of major capital facilities and other capital outlays.

The debt service fund accounts for accumulation of resources for, and the payment of long- term debt principal, interest and related costs.

The District operates one enterprise fund, the food service fund. This fund accounts for the activities of the District’s food service program.

F - 36 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

C. Basis of Presentation (Continued)

The District accounts for assets held by the District in a trustee capacity in a private-purpose trust fund. This fund accounts for activities in the various scholarship accounts, whose sole purpose is to provide annual scholarships to particular students as prescribed by donor stipulations. The fund also accounts for monies in the Irene Hinkle Music Fund, whose purpose is to provide the resources to purchase music equipment as prescribed by the donor.

The District accounts for assets held as an agent for various student activities in an agency fund.

The internal service fund accounts for health insurance premiums and claims of the District.

D. Measurement Focus and Basis of Accounting

The government-wide, proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Agency funds within the fiduciary fund group have no measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Net position (total assets less total liabilities) are used as a practical measure of economic resources and the operating statement includes all transactions and events that increased or decreased net position. Depreciation is charged as expense against current operations and accumulated depreciation is reported on the statement of net position.

The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers tax revenue to be available if collected within 60 days of the end of the fiscal period. Revenue from federal, state and other grants designated for payment of specific school district expenditures is recognized when the related expenditures are incurred; accordingly, when such funds are received, they are recorded as unearned revenues until earned. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, then unrestricted resources as they are needed.

E. Budgets and Budgetary Accounting

An operating budget is adopted prior to the beginning of each year for the general fund on a modified accrual basis of accounting. The general fund is the only fund for which a budget is legally required.

F - 37 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

E. Budgets and Budgetary Accounting (Continued)

The Pennsylvania School Code dictates specific procedures relative to adoption of the School District’s budget and reporting of its financial statements, specifically:

The School District, before levying annual school taxes, is required to prepare an operating budget for the succeeding fiscal year.

The School District is required to publish notice by advertisement, at least once in two newspapers of general circulation in the municipality in which it is located, and within fifteen days of final action, that the proposed budget has been prepared and is available for public inspection at the administrative office of the School District.

Notice that public hearings will be held on the proposed operating budget must be included in the advertisement; such hearings are required to be scheduled at least ten days prior to when final action on adoption is taken by the Board.

Legal budgetary control is maintained at the sub-function/major object level (for example, 1100-100). The Board of School Directors may make transfers of funds appropriated to any particular item of expenditure by legislative action in accordance with the Pennsylvania School Code. Management may amend the budget at the sub-function/sub-object level without Board approval. Appropriations lapse at the end of the fiscal period. Budgetary information reflected in the financial statements is presented at or below the level of budgetary control and includes the effect of approved budget amendments. The Board of School Directors made several supplemental budgetary appropriations throughout the year which resulted in an increase in the general fund budget in the amount of $370,109. The entire supplemental budgetary appropriation was a result of program budgets prescribed by federal and state agencies.

In order to preserve a portion of an appropriation for which an expenditure has been committed by a purchase order, contract or other form of commitment, an encumbrance is recorded. Encumbrances outstanding at year-end are reported in the fund financial statements as assigned fund balances.

Included in the general fund budget are program budgets as prescribed by the federal and state agencies funding the program. These budgets are approved on a program by program basis by the federal and state funding agencies.

F. Encumbrances

Encumbrances at year-end are reported in the fund financial statements as assigned fund balance since they do not constitute expenditures or liabilities, but serve as authorization for expenditures in the subsequent year. As of June 30, 2014, the district did not have any encumbrances.

G. Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due to/from other funds”. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances”.

Advances between funds, as reported in the fund financial statements, are offset by a nonspendable fund balance in the applicable governmental funds to indicate that they are not available for appropriation and are not expendable financial resources.

F - 38 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

H. Inventories

On government-wide financial statements, inventories are presented at the lower of cost or market on a first-in, first-out basis, and are expensed when used.

A physical inventory of the cafeteria fund food and supplies was taken as of June 30, 2014. The inventory consisted of government donated commodities which were valued at estimated fair market value, and purchased commodities and supplies, both valued at cost using the first-in, first-out (FIFO) method. Any unused commodities donated by the federal government at June 30, 2014 are reported as unearned revenue.

I. Prepaid Expenses

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. Prepaid expenses are recorded as expenses when consumed on the government-wide financial statements. Prepaid expenditures are recorded as expenditures on the fund financial statements if they will be consumed within three years. All other long-term prepaid expenditures are recorded as expenditures when purchased.

J. Capital Assets

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the school district as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. In addition, capital assets purchased with long-term debt may be capitalized regardless of the thresholds established. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.

All reported capital assets are depreciated using the straight-line method over the following estimated useful lives:

Assets Years Buildings 50 Building Improvements 10 to 20 Site Improvements 15 to 20 Furniture 10 to 20 Vehicles 8 to 15 Equipment 5 to 20 Computer Software 3 Library/Workbooks 5 to 20

Proprietary fund equipment purchases are capitalized in the proprietary fund at cost and depreciated on a straight-line basis over 12 years at the rate of 8.33% per year.

F - 39 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

K. Long-Term Obligations

In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental or business-type activity columns in the statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued and discounts on debt issuances are reported as other financing sources. Bond issuance costs, whether or not withheld from the actual debt proceeds received, are reported as administration expenditures.

L. Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

M. Cash, Cash Equivalents and Investments

Cash and cash equivalents are defined as short-term, highly liquid investments that are readily convertible to known amounts of cash and include investments with original maturities of three months or less.

All investments are stated at cost including accrued interest which approximates fair value.

N. Fund Balance Policy

The District implemented GASB 54, Fund Balance Reporting and Governmental Fund Type Definitions, to address issues related to how fund balance was being reported. GASB 54 requires the fund balance amounts to be properly reported within one of the following fund balance categories:

Nonspendable – amounts that are not in spendable form (such as inventory) or required to be legally or contractually maintained intact,

Restricted – amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation,

Committed – amounts that can be used only for the specific purposes determined by a resolution of the District Board of Directors (the district’s highest level of decision making authority). The Board of Directors is required to adopt a resolution to modify or rescind the commitment,

Assigned – amounts intended to be used by the District for specific purposes that are neither restricted nor committed. Assignments can made by the governing body itself or by its designee,

Unassigned – residual classification for the District’s general fund and includes all spendable amounts not contained in the other classifications. Negative unassigned fund balance may be reported in other governmental funds if expenditures incurred for specific purposes exceeded the amounts restricted, committed or assigned to those purposes.

F - 40 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

N. Fund Balance Policy (Continued)

Committed Fund Balance Policy

The District’s committed fund balances are amounts required to be reported by the School Board, either because of School Board Policy or because of motions that passed at School Board meetings.

Assigned Fund Balance Policy

The District’s assigned fund balances are amounts the District intends to use for a specific purpose as expressed by the Board. The District adopted Policy Number 620, Fund Balance authorizing the business administrator or designee to assign fund balance.

Order of Fund Balance Spending Policy

The District’s policy is to first apply restricted fund balance, then committed, assigned, and unassigned, respectively when an expenditure is incurred for purposes for which amounts in any of these classifications could be used.

Minimum Fund Balance Policy

The District has adopted a formal minimum fund balance policy. The district will strive to maintain an unassigned general fund balance of not less than 5 percent and not more than 8 percent of the budgeted expenditures for that year. The total fund balance, consisting of several portions including, restricted, committed, assigned and unassigned, may exceed 8 percent.

If the unassigned portion of the fund balance falls below the threshold of five percent (5%) of budgeted expenditures, the Board will pursue options for increasing revenues and decreasing expenditures, or a combination of both until five percent (5%) is attained. If the unassigned portion of the fund balance exceeds eight percent (8%) of budgeted expenditures, the Board may utilize a portion of the fund balance by appropriating excess funds for nonrecurring expenditures, instead of normal operating costs.

O. Compensated Absences

Vacation – The school district administrators and support staff are granted vacation in varying amounts, based on individual contracts and on length of service. Administrators with accumulated vacation days in excess of thirty days and who are unable to take vacation, the number of vacation days over thirty is transferred to sick leave. Support staff must utilize vacation days earned during a school year by June 30th of the following school year or be forfeited.

Sick Leave – The school district allows all employees to accumulate their unused sick leave as specified in negotiated labor contracts, employee handbooks or individual employment handbooks. Sick leave use is based on a last-in first-out (LIFO) basis. Sick leave provisions for each employee group are:

Group Days per Year Accumulation Lump Sum Payout Administrators Per Contract Unlimited Per Contract Teachers and Other Licensed Professionals 10 Unlimited Per Negotiated Labor Contract Secretary/Clerical Staff 10 Unlimited $25/Day Times a Maintenance and Custodians 10 Unlimited Maximum 250 Days. Cafeteria Personnel 10 Unlimited Must be 55 Years of Aides 10 Unlimited Age with 10 Years Employment with the District

F - 41 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

O. Compensated Absences (Continued)

Accumulated compensated absences for teachers and other licensed professionals are estimated by management based on the following assumptions:

- Persons over age 50 with 10 or more years of service with the District will become retirees of the District

- Persons over age 50 with less than 10 years of service with the District or persons under age 50 with more than 10 years of service with the District are 50% likely to be retirees of the District

Salary-related payments associated with the payment of compensated absences are included in the total liability accrual for compensated absences.

P. Deferred Outflows/Inflows of Resources

In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources until then.

In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources until that time.

Q. Net Position Flow Assumption

Sometimes the District will fund outlays for a particular purpose from both restricted and unrestricted resources. It is the District’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied.

R. Date of Management’s Review

Management has evaluated subsequent events through November 20, 2014, the date the financial statements were available to be issued.

NOTE 2 - EXPLANATION OF CERTAIN DIFFERENCES BETWEEN GOVERNMENTAL FUND STATEMENTS AND DISTRICT-WIDE STATEMENTS

Due to the differences in the measurement focus and basis of accounting used on the governmental fund statements and government-wide statements, certain financial transactions are treated differently. The basic financial statements contain a full reconciliation of these items.

Explanation of Differences between Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances and the Statement of Activities

Capital related differences include non-facility related capital asset purchases are recorded as an expenditure in the functional categories listed under current expenditures in the government fund statements and capitalization and recording of depreciation expense in the statement of activities.

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COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 3 - DEPOSITS AND INVESTMENTS

Under Section 440.1 of the Public School Code of 1949, as amended, the District is permitted to invest its monies as follows:

Obligations of (1) the United States of America or any of its agencies or instrumentalities backed by the full faith and credit of the United States of America, (2) the Commonwealth of Pennsylvania or any of its agencies or instrumentalities backed by the full faith and credit of the Commonwealth, or (3) any political subdivision of the Commonwealth of Pennsylvania or any of its agencies or instrumentalities backed by the full faith and credit of the political subdivision.

Deposits in savings accounts or time deposits or share accounts of institutions insured by the Federal Deposit Insurance Corporation are authorized to the extent that such accounts are so insured and, for any amounts above the insured maximum, provided that approved collateral as provided by law is pledged by the depository. The deposit and investment policy of the School District adheres to state statutes.

There were no deposit or investment transactions during the year that were in violation of either the state statutes or the policy of the School District.

The fair values of deposits are equal to the cost of deposits. Investments are stated at cost including accrued interest, which approximates fair value.

Cash

Custodial Credit Risk – Deposits

Custodial credit risk is the risk that in the event of a bank failure, the District’s deposits may not be returned to it. The District does not have a policy for custodial credit risk. As of June 30, 2014, $3,905,021 of the District’s bank balance of $4,155,021 was exposed to custodial credit risk as:

Uninsured and collateral held by the pledging bank’s trust department not in the District’s name $ 3,905,021 $ 3,905,021

Reconciliation to Financial Statements

Uninsured amount above $ 3,905,021 Plus: Insured Amount 250,000 Less: Outstanding Checks (406,369) Plus: Deposit in Transit 18,462 Carrying Amount – Bank Balances $ 3,767,114 Plus: Pooled Cash Equivalents 49,304 Less: Outstanding Checks on Pooled Cash Equivalents (125) Total Cash per Financial Statements $ 3,816,293

Investments

As of June 30, 2014, the District had the following investments:

Investments Maturities Fair Value

Certificates of Deposit 12 - 60 Months $ 8,118 PA Local Government Investment Trust (PLGIT) 73,471 PA School District Liquid Asset Fund (PSDLAF) 223,303

$ 304,892

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COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 3 - DEPOSITS AND INVESTMENTS (Continued)

Interest Rate Risk

The District does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The weighted average maturity of the external investment pool assets is 41 days. The District’s investments in external investment pools are maintained for a period less than 12 months and are payable on demand. Management does monitor rates of returns for investments on a monthly basis.

Credit Risk

The District has no investment policy that would limit its investment choices to certain credit ratings. As of June 30, 2014, the District’s investment in Susquehanna Bank’s certificates of deposit was rated Baa2 by Moody’s, the certificates of deposit invested in Union Community Bank were not rated, the investments in PA Local Government Investment Trust and PA School District Liquid Fund was rated AAAm by Standard & Poor’s.

Custodial Credit Risk – Investments

For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the District will not be able to recover the value of its investments or collateral security that are in the possession of an outside party. The District’s policy does not specifically address custodial credit risk, however the District’s investments are in accordance with the District’s investment plan. The investments of the District are reviewed monthly by the board of directors. As of June 30, 2014, none of the District’s investments of $304,892 was exposed to custodial credit risk as:

Insured or Registered $ 8,118

The balance of $296,774 consists of pooled investments in PLGIT and PSDLAF. PSDLAF and PLGIT are not subject to regulatory oversight. Each participant in the pool owns a pro-rata share of deposits and investments held by the pool, which approximates fair value of the pool.

Beginning January 1, 2013, all interest and noninterest bearing demand accounts are aggregated in total by financial institutions and are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). Time and savings accounts are also insured up to $250,000 by FDIC.

Concentration of Credit Risk – Deposits and Investments

The District’s policy does not specifically address concentration of credit risk. Any investment of the District that is not insured is collateralized under Act 72 unless it is part of a pooled investment.

The District’s deposits and investments are held at the following financial institutions:

Deposits and/or Concentration Financial Institution Investments Percentage

Union Community Bank $ 4,157,186 92.19% PA School District Liquid Asset Fund 223,303 4.95% PA Local Government Investment Trust 122,775 2.72% Susquehanna Bank 3,000 .07% Wilmington Trust 2,952 .07%

$ 4,509,216 100.00%

F - 44 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 4 - REAL ESTATE AND PER CAPITA TAXES AND UNAVAILABLE REVENUE

Based upon assessments provided by the County, the school district bills and collects its own property taxes. The school district tax rate for the year ended June 30, 2014 was 27.37 mills ($27.37 per $1,000 of assessed valuation) as levied by the Board of School Directors. The Board of School Directors also levies per capita taxes based on the census of residents in the school district. The tax rate under Section 679 is $5/person and under Act 511 is $10/person. The total per capita tax levied by the district is $15/person. The School District also levies earned income tax. The earned income tax is ½ of 1% of earned wages. This tax is collected by the county agency and remitted to the School District. In addition, the District collects the local services tax, which is $5 per employee of employers located in the Borough. The county agency collects this tax and remits the District’s portion to the District. The schedule for real estate and per capita taxes levied for each fiscal year is as follows:

July 1 - Levy Date July 1 – August 31 - 2% Discount Period September 1 – October 31 - Face Payment Period November 1 – December 31 - 10% Penalty Period January 1 - Lien Date

The school district, in accordance with GAAP, recognized the delinquent and unpaid taxes receivable reduced by an allowance for uncollectible taxes as determined by the administration. A portion of the net amount estimated to be collectible which was measurable and available within 60 days was recognized as revenue and the balance deferred in the fund financial statements.

The balances at June 30, 2014 are as follows:

Allowance Net Gross for Estimated Tax Unavailable Taxes Uncollectible to be Revenue Revenue - Receivable Taxes Collectible Recognized Taxes Real Estate $ 695,584 $ -- $ 695,584 $ 144,818 $ 550,766 Interim 5,955 -- 5,955 -- 5,955 Per Capita 359,812 246,206 113,606 1,349 112,257

$1,061,351 $ 246,206 $ 815,145 $ 146,167 $ 668,978

NOTE 5 - DUE FROM OTHER GOVERNMENTS

Amounts due from other governments represent receivables for revenues earned by the school district. At June 30, 2014, the following amounts are due from other governmental units:

General Enterprise Fund Fund Total

Federal (through the state) $ 150,497 $ 78,508 $ 229,005 State 627,224 4,018 631,242 Local 250,903 -- 250,903

$ 1,028,624 $ 82,526 $ 1,111,150

F - 45 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 6 - CHANGES IN CAPITAL ASSETS

Capital asset activity for the year ended June 30, 2014 was as follows:

Beginning Ending Balance Increases Decreases Balance Governmental Activities Capital Assets, Not Being Depreciated Land $ 4,200 $ -- $ -- $ 4,200

Total Capital Assets Not Being Depreciated 4,200 -- -- 4,200 Capital Assets Being Depreciated Site Improvements 2,737,832 37,297 -- 2,775,129 Buildings 44,502,140 156,481 -- 44,658,621 Furniture and Fixtures 928,689 22,379 31,217 919,851 Library Books 549,128 -- -- 549,128 Vehicles 338,663 -- -- 338,663 Equipment 227,428 29,889 -- 257,317 Total Assets Being Depreciated 49,283,880 246,046 31,217 49,498,709

Less Accumulated Depreciation for: Site Improvements 1,560,989 100,043 -- 1,661,032 Buildings 8,849,772 1,152,398 -- 10,002,170 Furniture and Fixtures 592,090 30,215 31,217 591,088 Library Books 439,152 26,221 -- 465,373 Vehicles 293,026 14,118 -- 307,144 Equipment 166,891 19,363 -- 186,254 Total Accumulated Depreciation 11,901,920 1,342,358 31,217 13,213,061 Total Capital Assets, Being Depreciated, Net 37,381,960 (1,096,312) -- 36,285,648 Governmental Activities, Capital Assets, Net $ 37,386,160 $ (1,096,312) $ -- $ 36,289,848

Business-Type Activities Capital Assets Being Depreciated Equipment $ 68,658 $ -- $ -- $ 68,658 Total Capital Assets, Being Depreciated 68,658 -- -- 68,658

Less Accumulated Depreciation for: Equipment 57,369 2,587 -- 59,956 Total Accumulated Depreciation 57,369 2,587 -- 59,956 Total Capital Assets Being Depreciated, Net 11,289 2,587 -- 8,702 Business-Type Activities Capital Assets, Net $ 11,289 $ (2,587) $ -- $ 8,702

F - 46 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 6 - CHANGES IN CAPITAL ASSETS (Continued)

Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental Activities Instruction Regular $ 623,640 Special 411,855 Support Services Student Services 10,292 Instructional Staff 10,291 Administration 43,627 Pupil Health 10,291 Operation and Maintenance of Plant 180,413 Operation of Noninstructional Services Student Activities 26,847 Unallocated Depreciation Expense 25,102

Total Depreciation Expense – Governmental Activities $ 1,342,358

Business-Type Activities Cafeteria $ 2,587

Total Depreciation expense – Business-Type Activities $ 2,587

NOTE 7 - LONG-TERM DEBT

During the fiscal year ended June 30, 2014, long-term debt changed as follows:

Total Bonds/Notes Compensated Long-Term Payable Absences Debt

Beginning of Year $ 27,680,000 $ 244,731 $ 27,924,731 Additional Borrowing 15,820,000 -- 15,820,000 Principal Retirement (16,985,000) -- (16,985,000) Increase in Compensated Absences -- 32,888 32,888 Decrease in Compensated Absences -- (11,159) (11,159) Pay-Outs of Compensated Absences -- (54,817) (54,817)

End of Year $ 26,515,000 $ 211,643 $ 26,726,643

Current Portion 1,300,000 21,164 1,321,164

The payments of long-term debt are to be funded by the general fund and debt service fund. The school district does not currently have any long-term liabilities for business-type activities. Payments for compensated absences are funded by the general fund.

Bonds and Notes Payable (Net of Current Portion) $ 25,215,000

Bond Discounts (Net of Accumulated Amortization) (302,136)

Bonds and Notes Payable, Net $ 24,912,864

F - 47 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 7 - LONG-TERM DEBT (Continued)

The future annual payments required to amortize all outstanding debt and obligations, except for the compensated absences, as of June 30, 2014, including total interest payments are as follows:

Year Ended General Obligation Bonds June 30, Interest Principal Total 2015 $ 796,835 $ 1,300,000 $ 2,096,835 2016 719,688 1,905,000 2,624,688 2017 695,948 1,930,000 2,625,948 2018 665,910 1,970,000 2,635,910 2019 626,310 2,000,000 2,626,310 2020-2024 2,336,339 10,815,000 13,151,339 2025-2027 516,960 6,595,000 7,111,960

$ 6,357,990 $ 26,515,000 $ 32,872,990

General Obligation Bonds, Series of 2009

On April 30, 2009, the school district issued general obligation bonds in the amount of $9,165,000. The purpose of the bonds was (1) to refund the General Obligation Bonds, Series of 2004 and (2) to pay the costs of issuing the bonds. The bonds bear interest rates ranging from 2.0% to 4.0% with principal maturities from June 2009 through June 2024. In March 2014, the bonds were refinanced with General Obligation Bonds, Series of 2014.

General Obligation Bonds, Series A of 2009

On August 7, 2009, the school district issued general obligation bonds in the amount of $12,065,000. The purpose of the bonds was to (1) refund the General Obligation bonds, Series of 2003, (2) finance renovations to existing school facilities, and (3) pay the costs of issuing the bonds. The bonds bear interest rates ranging from 2% to 4.25% with principal maturities from February 2010 through February 2024. In October 2013, the bonds were refinanced with General Obligation Bonds, Series of 2013.

General Obligation Bonds, Series of 2010

On March 2, 2010, the school district issued general obligation bonds in the amount of $12,645,000. The purpose of the bonds was to (1) refund the General Obligation Bonds, Series of 2005, (2) finance renovations to existing school facilities, and (3) pay the costs of issuing the bonds. The bonds bear interest rates ranging from 1% to 4% with principal maturities from June 2010 through June 2027. The balance outstanding as of June 30, 2014 was $11,310,000.

General Obligation Bonds, Series of 2013

On October, 15 2013, the District issued general obligation bonds in the amount of $8,780,000. The purpose of the bonds was (1) to advance refund the General Obligation Bonds, Series A of 2009 and (2) to pay the costs of issuing the bonds. The bonds bear interest rates ranging from .6% to 3.50% with principal maturities from February 2015 through February 2024. This advance refunding resulted in an economic gain of $163,148. The balance outstanding at June 30, 2014 was $8,780,000.

General Obligation Bonds, Series of 2014

On March 4, 2014, the District issued general obligation bonds in the amount of $7,040,000. The purpose of the bonds was (1) to refund the General Obligation Bonds, Series of 2009 and (2) to pay the costs of issuing the bonds. The bonds bear interest rates ranging from 1.00% to 3.00% with principal maturities from June 2014 through June 2024. This current refunding resulted in an economic gain of $363,034. The balance outstanding at June 30, 2014 was $6,425,000.

F - 48 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 7 - LONG-TERM DEBT (Continued)

Defeasance of Debt

In October 2013, the District advance refunded General Obligation Bonds, Series A of 2009 by establishing an escrow account to pay off the bonds as they become callable. This resulted in a defeasance of debt and these bonds are no longer reported in the financial statements of the District. The balance outstanding as of June 30, 2014 was $8,460,000. These bonds were called and paid August 2014.

NOTE 8 - BOND REFINANCING CHARGES

In the event that advance refunding of debt results in a defeasance, full accrual basis of accounting requires that the amounts deposited in escrow in excess of the debt principal are to be amortized over the life of the old debt or the life of the new debt, whichever is shorter. The amortization of this charge will be recognized as a component of interest expense. The district is amortizing the bond refinancing charges, utilizing the straight line method, with the amortization period through 2024. Under the modified accrual basis of accounting, the amounts are recognized as debt service expenditures when paid to the escrow account and the debt is defeased. For the year ended June 30, 2014, the District amortized $10,778 as a component of interest expense.

NOTE 9 - SELF INSURANCE – HEALTH BENEFITS

The school district is participating in the insurance consortium with the Lancaster-Lebanon Intermediate Unit No. 13 to provide for the medical care for eligible employees and their dependents. The intermediate unit, which administers the plan, monitors the school's deposits into the school district trust account to be held for the benefits described above and Coventry Health America/Health Assurance, plan administrator, processes and pays the claims. The school district was limited in liability to $70,000 per individual claim and the pool was limited in liability to $200,000 per individual claim. The school district was limited in liability to $2,569,618 for 2013-14 by purchasing specific and aggregate stop-loss insurance coverage. Management has committed $600,000 of its fund balance at June 30, 2014 for the future payment of claims. The district has recorded a liability for claims incurred prior to June 30, 2014 and paid subsequently in the amount of $129,780. The claim liability is reflected in accounts payable in the health insurance fund.

CHANGE IN AGGREGATE CLAIM LIABILITIES - HEALTH BENEFITS

Year Ended June 30, 2014 2013 Claim Liability – Beginning of Year $ 110,745 $ 138,868 Current Year Claims and Changes in Estimates 1,762,569 1,649,188 Claim Payments by School District (1,743,534) (1,677,311) Claim Liability – End of Year $ 129,780 $ 110,745

NOTE 10 - PENSION PLAN

Plan Description

School districts in the Commonwealth of Pennsylvania participate in the Public School Employees' Retirement System (the System), a governmental cost sharing multiple-employer defined benefit plan. The System provides retirement and disability, legislatively mandated ad hoc cost-of-living adjustments, and healthcare insurance premium assistance to qualifying annuitants. Authority is established by the Public School Employees’ Retirement Code (Act No. 96 of October 2, 1975, as amended)(24 Pa. C.S. 8101-8535).

The System issues a Comprehensive Annual Financial Report (CAFR) that includes financial statements and required supplementary information for the plan. A copy of the report may be obtained by writing to Beth Girman, Office of Financial Management, Public School Employees' Retirement System, 5 N. 5th Street, Harrisburg, PA 17101-1905 or by emailing Beth at [email protected]. The CAFR is also available on the Publications page of the PSERS website, www.psers.state.pa.us.

F - 49 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 10 - PENSION PLAN (Continued)

Contributions and Funding Policy

The contribution policy is established in the Public School Employees' Retirement Code and requires contributions by active members, employers, and the Commonwealth. Active members who joined the System prior to July 22, 1983 contribute at 5.25 percent (Membership Class TC) or at 6.50 percent (Membership Class TD) of the member's qualifying compensation. For members joining the System on or after July 22, 1983, and who were active or inactive as of July 1, 2001, the contribution rate is 6.25 percent (Membership Class TC) or at 7.50 percent (Membership Class TD) of the member’s qualifying compensation. Members who joined the System after June 30, 2001 and before July 1, 2011 contribute at 7.50 percent (automatic Membership Class TD). For all new hires and for members who elected class TD membership, the higher contribution rates began with service rendered on or after January 1, 2002.

Members who joined the System after June 30, 2011, automatically contribute at the Membership Class T-E rate of 7.5% (base rate) of the member’s qualifying compensation. All new hires after June 30, 2011, who elect Class T-F membership contribute at 10.3% (base rate) of the member’s qualifying compensation. Membership Class T-E and T-F are affected by a “shared risk” provision in Act 120 of 2010 that in future fiscal years could cause the Membership Class T-E contribution rate to fluctuate between 7.5% and 9.5% and Membership Class T-F contribution rate to fluctuate between 10.3% and 12.3%.

Contributions required of employers are based upon an actuarial valuation. For the fiscal year ended June 30, 2014, the rate of employer’s contribution was 16.93 percent of covered payroll. The 16.93 percent rate is composed of a pension contribution rate of 16.00 percent for pension benefits and .93 percent for healthcare insurance premium assistance.

Columbia Borough School District’s contributions to the System for the years ending June 30, 2014, 2013, and 2012 were $1,347,867, $957,450 and, $703,377, respectively, equal to the required contributions for each year.

NOTE 11 - OPERATING LEASES

The District entered into a lease rental agreement with De Lage Landen Finance to lease 13 copiers. The lease is effective July 1, 2010 and is for a period of 60 months, with payments due monthly in the amount of $2,660. During the year ended June 30, 2014, the District paid $31,920 as a result of the agreement. The future minimum payments are as follows:

Year Ended June 30, 2015 $ 31,920 2016 2,660

$ 34,580

On June 29, 2013, each of the sixteen public school districts in the county signed lease rental agreements with the Lancaster County Career and Technology Center Authority (the “Authority”). The Authority issued $9,995,000 of lease revenue bonds for the purpose of renovations and additions to all the campuses of the Lancaster County Career and Technology Center (LCCTC) and to pay the costs of issuing and insuring the bonds. On September 20, 2013, the Authority issued additional lease revenue bonds in the amount of $9,995,000 for the purpose of renovations and additions to the Mount Joy and Willow Street campuses of the LCCTC, and for various other ongoing and future proposed capital projects of the LCCTC and to pay the costs of issuing and insuring the Bonds. Each district agreed to make payments of their pro-rated share of the Authority’s debt service. Each district’s prorated shares are calculated annually based on assessed market value. During the year ended June 30, 2014, the District paid $13,938 in operating lease payments for its pro- rated share of the Authority’s debt service.

F - 50 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 11 - OPERATING LEASES (Continued)

The future annual lease payments for the District’s pro-rated share are as follows:

Year Ended June 30, 2015 $ 11,477 2016 11,480 2017 11,578 2018 12,915 2019 12,910 2020-2024 64,418 2025-2029 64,290 2030-2034 64,028 2035-2037 38,332

$ 291,428

NOTE 12 - POST EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS

Plan Description

The District has implemented Governmental Accounting Standards Board Statement No. 45, "Accounting and Financial Reporting by Employers for Post-employment Benefits Other Than Pensions," for certain post- employment healthcare benefits provided by the District.

The District's post-employment healthcare plan is a single-employer defined benefit healthcare plan. The plan permits any professional employee who retires at age 50 or later to continue group insurance coverage to age 65 by remitting the monthly premium to the school district. To be eligible an employee must have been employed ten or more years with participation in the Public School Employees' Retirement System and five years of service in the Columbia Borough School District. Coverage is limited to dependents that were included one year prior to the employee's retirement. All group insurance coverage terminates upon either eligibility for Medicare, non-receipt of premium within 30 days of the due date, or insurance coverage by another employer. Coverage does not include life insurance or dental insurance. The retiree's cost of group insurance is calculated by the plan administrator and is based on projected expenditures for the year. The retiree's premium for the group insurance is payable in advance on a monthly basis. The Board of School Directors has the authority to establish and amend benefit provisions through the collective bargaining process with members of the professional staff, an agreement with administrative employees, and support staff contracts. The plan does not issue any financial report and is not included in the report of any public employee retirement system or any other entity.

Funding Policy

The contribution requirements of plan members are established and may be amended by the Board of School Directors. The required contribution is based on projected pay-as-you-go financing requirements. Plan members receiving benefits contributed $140,711 through their required monthly contributions.

F - 51 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 12 - POST EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (Continued)

Annual OPEB Cost and Net OPEB Obligation

The District's annual other post-employment benefit cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The following table shows the components of the District's OPEB cost for the year, the estimated amount contributed to the plan and changes in the District's net OPEB obligation to the plan.

2014 2013 2012

Annual Required Contribution $ 209,597 $ 209,597 $ 209,597 Interest on Net OPEB Obligation 13,566 9,384 6,316 Adjustment to Annual Required Contribution (18,508) (12,803) (8,616)

Annual OPEB Cost (Expense) 204,655 206,178 207,297 Contributions Made (Estimated) (111,328) (113,244) (139,099)

Increase in Net OPEB Obligation 93,327 92,934 68,198

Net OPEB Obligation – Beginning of Year 301,477 208,543 140,345

Net OPEB Obligation – End of Year $ 394,804 $ 301,477 $ 208,543

The district contributed 54.4%, 54.9% and 67.1% of the annual postemployment benefit cost for the years ended June 30, 2014, 2013 and 2012, respectively. Payments for other post-employment benefits will be funded by the general fund.

Funded Status and Funding Progress

Historical trend information required to be disclosed, beginning as of September 1, 2006 is as follows:

Unfunded Actuarial Actuarial Accrued Accrued Unfunded Liability Actuarial Actuarial Liability Actuarial as a Valuation Value Entry Accrued Funded Covered Percentage Date of Assets Age Liability Ratio Payroll of Payroll

9-1-06 $ -- $1,584,657 $1,584,657 0.00% $7,743,110 20.47% 9-1-10 $ -- $1,515,946 $1,515,946 0.00% $8,717,141 17.39%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.

F - 52 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 12 - POST EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (Continued)

Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial liabilities and the actuarial value of assets, consistent with the long- term perspective of the calculations.

An actuarial study as of September 1, 2010 was completed by Conrad M. Siegel, Inc. for purposes of GASB Statement No. 45 reporting. The actuarial cost method used was the entry age normal cost method. The following significant assumptions were used in the actuarial valuations as of September 1, 2010; (1) inflation rate of 3%; (2) a 4.5% rate of return; (3) salary increases of 3% cost of living adjustment, 1% real wage growth, and for teachers and administrators a merit increase which varies by age from 3% to .25% (4) rates of turnover ranging from 5.4% at age 25 to 13.5% at age 60; (5) mortality life expectancies are assumed separate rates for preretirement and postretirement using the rates in the PSERS defined benefit pension plan actuarial valuation; (6) no disability was assumed (7) retirement rates are based on PSERS plan experience and vary by age, gender and service; (8) 90% of support staff are assumed to elect coverage on retiring and 100% of all others are assumed to elect coverage on retiring (9) 50% percent of employees married at retirement and have a spouse covered by the plan at retirement; (10) wives are assumed to be two years younger than their husbands; (11) per capita claims cost used; (12) retirees contributions are assumed to increase at the same rate as the health care cost trend rate; and (13) health care cost trend rate was 8.5% in 2012, decreasing .5% per year to a rate of 5.5% in 2014. Rates gradually decrease from 5.3% in 2015 to 4.2% in 2099 and later. The unfunded actuarial accrued liability (UAAL) is being amortized based on the level dollar, 30-year open period.

NOTE 13 - CONTINGENT LIABILITIES

Grant Programs

The school district participates in federally assisted grant programs. These programs are subject to program compliance audits by the grantors or their representatives. The school district is potentially liable for any expenditures which may be disallowed pursuant to the terms of these grant programs. Management is not aware of any material items of noncompliance which would result in the disallowance of program expenditures.

NOTE 14 - PARTICIPATION IN RISK SHARING POOL

The District has elected to become a member of a self-insurance pool for worker's compensation insurance with the Lancaster-Lebanon Intermediate Unit No. 13, Lancaster County Academy and eighteen other school districts and local education agencies. The district entered into an agreement which states that the district pays an annual premium to the fund for the purpose of seeking prevention or lessening of claims due to injuries of employees of the members and to pool worker's compensation and occupational disease insurance risks, reserves, claims and losses and to provide self-insurance and re-insurance thereof. Each member is assessed an amount based on their covered payroll and prior experience of worker's compensation claims. All claims are then paid from the pool with reinsurance being purchased by the pool for claims in excess of $450,000 per occurrence. Claims are paid on an aggregate basis, and separate accounts for each member are not maintained. If there is a deficiency in the pooled funds, each member is assessed an amount equal to their proportional share as described above.

As of June 30, 2014, the school district is not aware of any additional assessments relating to the fund.

F - 53

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 15 - DUE TO/FROM OTHER FUNDS AND TRANSFERS

Interfund receivable and payable balances as of June 30, 2014 are as follows:

Due from Due to Other Funds Other Funds General Fund $ 120,595 $ 468,138 Private Purpose Trust Fund 4,000 -- Enterprise Fund -- 85,317 Student Activities Fund -- 500 Internal Service Fund 464,138 -- Capital Projects Fund -- 34,778 $ 588,733 $ 588,733

Interfund balances consist of health insurance claims paid from the internal service fund and not reimbursed by the general fund until July 2014. Amounts due to the general fund from the student activities and capital projects funds represent expenditures paid by the general fund and not reimbursed to the general fund until July 2014. Amounts due to the general fund from the enterprise fund are for normal operating expenditures. Amounts due to private purpose trust fund represent a contribution for future scholarships.

Interfund Transfers:

Transfer to Transfer from Other Funds Other Funds

General Fund $ 2,660,982 $ -- Debt Service Fund -- 2,626,717 Enterprise Fund -- 34,265 $ 2,660,982 $ 2,660,982

The district typically pays a majority of its debt service out of the debt service fund, therefore, the general fund transfers enough dollars each year to pay the annual debt service. The amount transferred was $2,626,717. The general fund made a transfer of $34,265 to the cafeteria fund to assist with normal operating expenditures.

NOTE 16 - FUND BALANCE/NET POSITION

Fund Balance

Nonspendable Fund Balance

The District’s nonspendable fund balance consists of prepaid expenditures. As of June 30, 2014, the District’s nonspendable fund balance was $24,868.

Restricted Fund Balance

As of June 30, 2014, the District’s restricted fund balance was $640,238, which consisted of the following:

Debt Service $ 2,952 Tree Purchase 355 Athletic Purchases 2,675 Renovation of Tennis Court 4,437 Capital Projects 629,014 Scoreboard Purchase 805 $ 640,238 F - 54

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2014

NOTE 16 - FUND BALANCE/NET POSITION (Continued)

Fund Balance (Continued)

Committed Fund Balance

As of June 30, 2014, the District’s committed fund balance was $900,000, which consisted of the following:

Committed for Future Retirement Expense $ 300,000 Committed for Future Health Insurance Claims 600,000

$ 900,000

Assigned Fund Balance

As of June 30, 2014, the District’s assigned fund balance consisted of $643,497, all of which was set aside for 2014-2015 budget deficit.

Stabilization Arrangements

The District set aside amounts in a stabilization arrangement for use to offset the anticipated increase in PSERS retirement contribution rates. These amounts may only be expended for these specific circumstances unless the commitment is rescinded by the School Board. The Stabilization balance as of June 30, 2014 was $300,000.

Net Investment in Capital Assets

Total Capital Assets (Net of Accumulated Depreciation) $ 36,289,848

Bonds Payable 26,515,000 Less: Bond Discount (302,136)

Net Outstanding Debt 26,212,864

Net Investment in Capital Assets $ 10,076,984

NOTE 17 - RISK MANAGEMENT

The District is exposed to various risks of loss related to theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The District has purchased various insurance policies to safeguard its assets from risk of loss. Insurance coverage appears to be consistent with previous years. During the year ended June 30, 2014 and the two previous fiscal years, no settlements exceeded insurance coverage.

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F - 56

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

INDIVIDUAL FUND SCHEDULE OF REVENUES COMPARED WITH BUDGET – GENERAL FUND AND EXPENDITURES AND OTHER FINANCING USES COMPARED WITH BUDGET – GENERAL FUND JUNE 30, 2014

The General Fund is used to account for most of the current operating revenues and expenditures including certain capital outlays and certain debt service expenditures. All tax revenues and other receipts and expenditures not specified by law or contractual agreement to another fund type are accounted for in the General Fund. This includes revenues and expenditures for federal programs.

F - 57 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

SCHEDULE OF REVENUES COMPARED WITH BUDGET - GENERAL FUND YEAR ENDED JUNE 30, 2014

Transfers Final Variance Original Increase Revised Positive Budget (Decrease) Budget Revenue (Negative) REVENUE FROM LOCAL SOURCES Current Real Estate Taxes $ 8,307,764 $ - $ 8,307,764 $ 8,277,249 (30,515) Interim Real Estate Taxes 3,500 - 3,500 7,275 3,775 Public Utility Realty Tax 12,000 - 12,000 11,589 (411) Payments in Lieu of Taxes 11,000 - 11,000 11,000 - Current Sect.679 Per Capita 23,000 - 23,000 20,071 (2,929) Current Act 511 Per Capita Tax 45,000 - 45,000 40,142 (4,858) Local Services Tax 7,000 - 7,000 12,507 5,507 Current Earned Income 650,000 - 650,000 821,937 171,937 Delinquent Taxes 595,000 - 595,000 597,392 2,392 Interest on Investments 70,000 - 70,000 16,711 (53,289) Revenue from Intermediate Sources - Federal funds 300,000 46,552 346,552 368,191 21,639 Revenue from Intermediate Sources - Other Funds - 4,842 4,842 4,888 46 Rentals 20,000 - 20,000 32,110 12,110 Contributions and Donations from Private Sources 10,000 14,250 24,250 21,453 (2,797) Tuition from Patrons 15,000 - 15,000 7,325 (7,675) District Activity Income 25,000 - 25,000 39,673 14,673 Miscellaneous Revenue 20,000 - 20,000 56,270 36,270 TOTAL REVENUE FROM LOCAL SOURCES 10,114,264 65,644 10,179,908 10,345,783 165,875 REVENUE FROM STATE SOURCES Basic Education Subsidy 6,260,829 - 6,260,829 6,270,045 9,216 Tuition for Orphans and Children - Placed in Private Homes 50,000 - 50,000 11,867 (38,133) Special Education of Exceptional Pupils 1,170,658 - 1,170,658 1,176,993 6,335 Transportation 12,000 - 12,000 13,690 1,690 Rentals 721,467 - 721,467 731,106 9,639 Medical, Dental and Nurse Services 30,000 - 30,000 27,831 (2,169) State Property Tax Reduction Allocation 636,265 - 636,265 636,265 - Extra Grants 119,976 - 119,976 119,976 - Revenue for Social Security Payments 302,033 - 302,033 376,493 74,460 Revenue for Retirement Payments 696,442 - 696,442 879,628 183,186 TOTAL REVENUE FROM STATE SOURCES 9,999,670 - 9,999,670 10,243,894 244,224

F - 58 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

SCHEDULE OF REVENUES COMPARED WITH BUDGET - GENERAL FUND YEAR ENDED JUNE 30, 2014

Transfers Final Variance Original Increase Revised Positive Budget (Decrease) Budget Revenue (Negative) REVENUE FROM FEDERAL SOURCES Education of Disadvantaged Children ESEA, Title I $ 530,000 $ 285,123 $ 815,123 $ 516,422 $ (298,701) Title II 90,000 (20,658) 69,342 69,342 - Other Restricted Federal Grants in Aid through the Commonwealth 30,000 40,000 70,000 55,357 (14,643)

TOTAL REVENUE FROM FEDERAL SOURCES 650,000 304,465 954,465 641,121 (313,344)

TOTAL REVENUES $ 20,763,934 $ 370,109 $21,134,043 $ 21,230,798 $ 96,755

F - 59 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES COMPARED WITH BUDGET - GENERAL FUND YEAR ENDED JUNE 30, 2014

Transfers Final Variance Original Increase Revised Positive Budget (Decrease) Budget Expenditures (Negative) EXPENDITURES INSTRUCTION REGULAR PROGRAMS Salaries $ 4,694,233 $ (45,525) $ 4,648,708 $ 4,647,835 $ 873 Employee Benefits 2,141,373 (46,002) 2,095,371 2,064,315 31,056 Purchased Professional and Technical Services 260,650 174,558 435,208 424,092 11,116 Purchased Property Services 34,369 605 34,974 34,807 167 Other Purchased Services 333,000 78,000 411,000 410,460 540 Supplies 416,833 (222,880) 193,953 189,533 4,420 Property 50,750 (10,766) 39,984 31,175 8,809 Other Objects 1,860 600 2,460 2,146 314

TOTAL REGULAR PROGRAMS 7,933,068 (71,410) 7,861,658 7,804,363 57,295

SPECIAL PROGRAMS Salaries 839,110 (60,000) 779,110 776,476 2,634 Employee Benefits 378,057 (36,739) 341,318 336,040 5,278 Purchased Professional and Technical Services 3,105,697 347,901 3,453,598 3,376,390 77,208 Other Purchased Services 355,000 304,000 659,000 658,810 190 Supplies 20,947 (12,189) 8,758 6,225 2,533 Other Objects 100 - 100 100 -

TOTAL SPECIAL PROGRAMS 4,698,911 542,973 5,241,884 5,154,042 87,842

VOCATIONAL EDUCATION PROGRAMS Other Purchased Services 320,000 (23,084) 296,916 291,032 5,884

TOTAL VOCATIONAL EDUCATION PROGRAMS 320,000 (23,084) 296,916 291,032 5,884

F - 60 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES COMPARED WITH BUDGET - GENERAL FUND YEAR ENDED JUNE 30, 2014

Transfers Final Variance Original Increase Revised Positive Budget (Decrease) Budget Expenditures (Negative) EXPENDITURES (Continued) INSTRUCTION (Continued) OTHER INSTRUCTIONAL PROGRAMS Salaries 136,078 22,048 158,126 157,487 639 Employee Benefits 63,073 13,342 76,415 75,180 1,235 Purchased Professional and Technical Services - 4,396 4,396 4,339 57 Other Purchased Services 450 914 1,364 46 1,318 Supplies 3,000 5,490 8,490 6,685 1,805

TOTAL OTHER INSTRUCTIONAL 202,601 46,191 248,792 243,738 5,054

NONPUBLIC SCHOOL PROGRAMS Purchased Professional and Technical Services 8,500 6,266 14,766 10,353 4,413

TOTAL NONPUBLIC SCHOOL PROGRAMS 8,500 6,266 14,766 10,353 4,413

Refund of Prior Year's Receipts - 72 72 72 -

TOTAL INSTRUCTION 13,163,080 501,008 13,664,088 13,503,600 160,488

SUPPORT SERVICES PUPIL PERSONNEL Salaries 453,490 20,702 474,192 473,931 261 Employee Benefits 221,447 15,116 236,563 226,885 9,679 Purchased Professional and Technical Services 67,840 7,640 75,480 74,696 784 Purchased Property Services 4,523 306 4,829 4,526 303 Other Purchased Services 4,000 973 4,973 3,428 1,545 Supplies 2,754 6,643 9,397 4,937 4,460 Property - 6,300 6,300 5,376 924 Other Objects 2,100 (1,600) 500 - 500

TOTAL PUPIL PERSONNEL 756,154 56,080 812,234 793,779 18,455

F - 61

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES COMPARED WITH BUDGET - GENERAL FUND YEAR ENDED JUNE 30, 2014

Transfers Final Variance Original Increase Revised Positive Budget (Decrease) Budget Expenditures (Negative) EXPENDITURES (Continued) SUPPORT SERVICES (Continued) INSTRUCTIONAL STAFF Salaries 401,705 (42,782) 358,923 342,363 16,560 Employee Benefits 344,338 (71,803) 272,535 272,416 119 Purchased Professional and Technical Services 69,233 (8,045) 61,187 48,938 12,250 Purchased Property Services 2,261 35 2,297 2,295 2 Other Purchased Services 27,565 (2,183) 25,382 11,239 14,143 Supplies 38,520 114 38,634 35,020 3,614 Property 3,600 (3,500) 100 53 47 Other Objects 3,705 (2,250) 1,455 868 587

TOTAL INSTRUCTIONAL STAFF 890,927 (130,414) 760,513 713,192 47,321

ADMINISTRATION Salaries 565,200 22,900 588,100 590,503 (2,403) Employee Benefits 260,455 19,100 279,555 276,267 3,288 Purchased Professional and Technical Services 98,100 (11,031) 87,069 86,331 738 Purchased Property Services 15,831 3,735 19,566 19,493 72 Other Purchased Services 60,100 (11,500) 48,600 42,626 5,974 Supplies 17,750 (1,635) 16,115 15,924 191 Property 3,000 (3,000) - - - Other Objects 9,800 (1,900) 7,900 6,639 1,261

TOTAL ADMINISTRATION 1,030,236 16,669 1,046,905 1,037,783 9,122

PUPIL HEALTH Salaries 146,366 2,800 149,166 148,968 198 Employee Benefits 72,925 22,100 95,025 93,813 1,212 Purchased Professional and Technical Services 2,700 16,000 18,700 18,474 226 Purchased Property Services - 250 250 250 - Other Purchased Services 425 (389) 36 - 36 Supplies 3,023 750 3,773 3,764 10

TOTAL PUPIL HEALTH 225,439 41,511 266,950 265,269 1,681

F - 62

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES COMPARED WITH BUDGET - GENERAL FUND YEAR ENDED JUNE 30, 2014

Transfers Final Variance Original Increase Revised Positive Budget (Decrease) Budget Expenditures (Negative) EXPENDITURES (Continued) SUPPORT SERVICES (Continued) BUSINESS Salaries 169,120 21,000 190,120 189,988 132 Employee Benefits 78,650 5,250 83,900 82,510 1,391 Purchased Professional and Technical Services 16,490 5,006 21,496 19,899 1,596 Purchased Property Services 9,543 (1,455) 8,088 7,011 1,078 Other Purchased Services 12,250 - 12,250 8,884 3,366 Supplies 10,500 (6,551) 3,949 3,311 638 Property 2,000 (2,000) - - - Other Objects 6,810 2,250 9,060 9,023 37

TOTAL BUSINESS 305,363 23,500 328,863 320,625 8,238

OPERATION AND MAINTENANCE OF PLANT SERVICES Salaries 543,388 26,000 569,388 569,315 73 Employee Benefits 327,845 (54,999) 272,846 253,841 19,005 Purchased Professional and Technical Services 1,000 (1,000) - - - Purchased Property Services 462,624 (34,999) 427,625 423,839 3,786 Other Purchased Services 90,040 35,734 125,774 116,978 8,796 Supplies 223,507 (35,007) 188,500 180,938 7,562 Property 2,809 17,645 20,454 19,207 1,247 Other Objects 1,325 - 1,325 683 643

TOTAL OPERATION AND MAINTENANCE SERVICES 1,652,538 (46,627) 1,605,911 1,564,799 41,112

STUDENT TRANSPORTATION Other Purchased Services 250,000 50,000 300,000 297,644 2,356

TOTAL STUDENT TRANSPORTATION 250,000 50,000 300,000 297,644 2,356

F - 63

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES COMPARED WITH BUDGET - GENERAL FUND YEAR ENDED JUNE 30, 2014

Transfers Final Variance Original Increase Revised Positive Budget (Decrease) Budget Expenditures (Negative) EXPENDITURES (Continued) SUPPORT SERVICES (Continued) CENTRAL SUPPORT SERVICES Salaries 126,309 7,500 133,809 131,316 2,493 Employee Benefits 68,691 7,259 75,950 72,713 3,237 Purchased Professional and Technical Services 11,530 10,700 22,230 21,395 835 Purchased Property Services 22,919 (8,700) 14,219 8,666 5,553 Other Purchased Services 93,603 (38,451) 55,152 49,530 5,622 Supplies 32,000 (180) 31,820 30,915 905 Property 4,000 13,446 17,446 14,133 3,313 Other objects - 180 180 180 -

TOTAL CENTRAL SUPPORT SERVICES 359,052 (8,426) 350,806 328,848 21,958

OTHER SUPPORT SERVICES Other Purchased Services 7,000 (72) 6,928 5,376 1,552

TOTAL OTHER SUPPORT SERVICES 7,000 (72) 6,928 5,376 1,552

TOTAL SUPPORT SERVICES 5,476,709 2,221 5,479,110 5,327,314 151,795

OPERATION OF NONINSTRUCTIONAL SERVICES STUDENT ACTIVITIES Salaries 194,542 (6,000) 188,542 187,523 1,019 Employee Benefits 73,514 (3,000) 70,514 65,873 4,641 Purchased Professional and Technical Services 68,900 (2,000) 66,900 65,130 1,770 Purchased Property Services 15,000 (4,000) 11,000 10,385 615 Other Purchased Services 54,454 (8,000) 46,454 41,567 4,887 Supplies 96,807 (46,500) 50,307 42,051 8,256 Property 10,000 (8,000) 2,000 1,914 86 Other Objects 15,705 (4,800) 10,905 10,519 386

TOTAL STUDENT ACTIVITIES 528,922 (82,300) 446,622 424,963 21,659

F - 64

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES COMPARED WITH BUDGET - GENERAL FUND YEAR ENDED JUNE 30, 2014

Transfers Final Variance Original Increase Revised Positive Budget (Decrease) Budget Expenditures (Negative) EXPENDITURES (Continued) OPERATION OF NONINSTRUCTIONAL SERVICES (Continued) COMMUNITY SERVICES Purchased Professional and Technical Services - 2,500 2,500 2,500 - Purchased Property Services 12,000 3,000 15,000 14,657 343 Supplies - 23,500 23,500 14,971 8,529

TOTAL COMMUNITY SERVICES 12,000 29,000 41,000 32,128 8,872

TOTAL OPERATION OF NON- INSTRUCTIONAL SERVICES 540,922 (53,300) 487,622 457,091 30,531

TOTAL EXPENDITURES 19,180,711 449,929 19,630,820 19,288,006 342,814

OTHER FINANCING USES

INTERFUND TRANSFERS 2,666,038 - 2,666,038 2,660,982 5,056

BUDGET RESERVE 450,000 (80,000) 370,000 - 370,000

TOTAL OTHER FINANCING USES 3,116,038 (80,000) 3,036,038 2,660,982 375,056

TOTAL EXPENDITURES AND OTHER FINANCING USES $ 22,296,749 $ 369,929 $ 22,666,858 $ 21,948,988 $ 717,870

F - 65

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F - 66

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

COMBINING STATEMENTS – FIDUCIARY FUNDS JUNE 30, 2014

Fiduciary Funds

Agency Fund - This fund accounts for assets held as an agent for various student activities.

Private Purpose Trust Fund - This fund accounts for activities in the various scholarship accounts, whose sole purpose is to provide annual scholarships to particular students as prescribed by donor stipulations. The fund also accounts for monies in the Irene Hinkle Music Fund, whose purpose is to provide the resources to purchase music equipment as prescribed by the donor.

F - 67

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES – AGENCY FUND YEAR ENDED JUNE 30, 2014

July 1, 2013 Additions Reductions June 30, 2014

ASSETS Cash, Cash Equivalents and Investments $ 13,817 $ 26,259 $ 29,875 $ 10,201

TOTAL ASSETS $ 13,817 $ 26,259 $ 29,875 $ 10,201

LIABILITIES Due to Other Funds $ 6,525 $ 500 $ 6,525 $ 500 Due to Student Other Groups 7,292 25,759 23,350 9,701

TOTAL LIABILITIES $ 13,817 $ 26,259 $ 29,875 $ 10,201

F - 68 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

COMBINING STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2014

Private Purpose Trust Fund Irene Hinkle Scholarship Music Fund Fund Total ASSETS Cash and Cash Equivalents $ 49,179 $ -- $ 49,179 Investments 8,118 60,606 68,724 Due from Other Funds 4,000 -- 4,000

TOTAL ASSETS $ 61,297 $ 60,606 $ 121,903

LIABILITIES $ -- $ -- $ --

NET POSITION Held in Trust for Scholarships 61,297 -- 61,297 Held in Trust for Music Purposes -- 60,606 60,606

TOTAL LIABILITIES AND NET POSITION $ 61,297 $ 60,606 $ 121,903

F - 69 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2014

Private Purpose Trust Fund Irene Hinkle Scholarship Music Fund Fund Total ADDITIONS Earnings on Investments $ 99 $ 11 $ 110 Contributions 3,298 -- 3,298

TOTAL ADDITIONS $ 3,397 $ 11 $ 3,408

DEDUCTIONS Scholarships Awarded $ 2,843 $ -- $ 2,843

TOTAL DEDUCTIONS 2,843 -- 2,843

Changes in Net Position 554 11 565

Net Position – July 1, 2013 60,743 60,595 121,338

Net Position – June 30, 2014 $ 61,297 $ 60,606 $ 121,903

F - 70

Statistical Section

Columbia Borough School District, Columbia, Pennsylvania

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COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA STATISTICAL SECTION

SECTION OVERVIEW

This section provides further details as a context for better understanding of the financial statements.

Begins Contents Page

Financial Trends 2 These schedules contain trend information to help the reader understand how financial performance has changed over time.

Revenue Capacity 20 These schedules contain information to help the reader assess the Columbia Borough School District's most significant local revenue sources and property taxes.

Debt Capacity 31 These schedules present information to help the reader assess the affordability of the School District's current levels of outstanding debt and the ability to issue additional debt in the future.

Demographic and Economic Information 38 These schedules offer demographic and economic indicators to help the reader understand the environment within which the School District's financial activities take place.

Operating Information 48 These schedule contain service and infrastructure data to help the reader understand how the information in the School District's financial report relates to the services the School District provides and the activities it performs.

Sources: The information in these schedules is derived from the comprehensive annual financial reports for fiscal years ended June 30, 2005 - June 30, 2014 unless otherwise noted.

S - 1 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA NET POSITION BY COMPONENT Last ten fiscal years Accrual basis of accounting Unaudited

2005 2006 2007 2008

Governmental activities Net investment in capital assets$ 8,551,297 $ 9,312,239 $ 8,115,270 $ 8,711,483 Restricted - - 6,157 6,223 Unrestricted 3,834,664 4,470,549 3,917,076 3,490,587 Total governmental activities net position$ 12,385,961 $ 13,782,788 $ 12,038,503 $ 12,208,293

Business-type activities Net investment in capital assets$ 47,896 $ 41,516 $ 35,676 $ 30,275 Unrestricted 43,666 45,489 12,812 33,576 Total business-type activities net position$ 91,562 $ 87,005 $ 48,488 $ 63,851

Total primary government Net investment in capital assets$ 8,599,193 $ 9,353,755 $ 8,150,946 $ 8,741,758 Restricted - - 6,157 6,223 Unrestricted 3,878,330 4,516,038 3,929,888 3,524,163 Total primary government$ 12,477,523 $ 13,869,793 $ 12,086,991 $ 12,272,144

Source: District Audited Financial Statements

S - 2 June 30, 2009 2010 2011 2012 2013 2014

$ 8,708,031 $ 9,141,272 $ 9,895,645 $ 9,507,846 $ 10,037,094 $ 10,076,984 6,302 6,694 6,727 886,687 858,143 640,238 3,732,112 4,347,205 4,443,077 4,066,417 3,310,092 2,597,432 $ 12,446,445 $ 13,495,171 $ 14,345,449 $ 14,460,950 $ 14,205,329 $ 13,314,654

$ 25,146 $ 20,220 $ 16,463 $ 13,876 $ 11,289 $ 8,702 4,899 (3,058) (1,411) (3,649) 34,632 94,284 $ 30,045 $ 17,162 $ 15,052 $ 10,227 $ 45,921 $ 102,986

$ 8,733,177 $ 9,161,492 $ 9,912,108 $ 9,521,722 $ 10,048,383 $ 10,085,686 6,302 6,694 6,727 886,687 858,143 640,238 3,737,011 4,344,147 4,441,666 4,062,768 3,344,724 2,691,716 $ 12,476,490 $ 13,512,333 $ 14,360,501 $ 14,471,177 $ 14,251,250 $ 13,417,640

S - 3 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA EXPENSES, PROGRAM REVENUES, AND NET (EXPENSE)/REVENUE Eight fiscal years net assets, two fiscal years net position Accrual basis of accounting Unaudited

2005 2006 2007 2008 Expenses Governmental activities Instruction$ 9,339,850 $ 9,756,823 $ 11,260,400 $ 11,942,674 Instructional Student Support 1,124,404 1,398,504 1,729,929 1,990,132 Administrative and Financial Support Services 1,461,335 1,323,898 1,495,332 1,511,881 Operation and Maintenance of Plant Services 1,234,212 1,317,998 2,002,796 1,500,881 Pupil Transportation 142,253 152,422 169,469 150,481 Student Activities 351,799 357,208 467,584 440,195 Community Services 18,293 20,420 19,925 15,211 Interest on Long-term Debt 609,822 785,122 754,323 709,981 Unallocated depreciation expense 12,499 16,918 16,292 17,706 Total Governmental Activities 14,294,467 15,129,313 17,916,050 18,279,142

Business-type Activities Food Services 635,978 722,645 713,395 801,105

Total primary government expenses 14,930,445 15,851,958 18,629,445 19,080,247

Program revenues Governmental activities Charges for service Instruction 7,090 18,722 31,292 14,408 Operation and Maintenance of Plant Services 5,380 41,297 44,142 41,718 Student Activities 36,769 43,168 35,838 48,688 Operating Grants and Contributions 3,027,621 3,049,447 3,467,510 3,572,697 Capital Grants and Contributions 384,469 749,793 796,135 672,412 Total governmental program revenues 3,461,329 3,902,427 4,374,917 4,349,923

Business-type activities Charges for service 300,891 300,322 289,293 310,373 Operating Grants and Contributions 342,585 381,956 377,911 416,653 Total business-type program revenues 643,476 682,278 667,204 727,026

Total primary government program revenues$ 4,104,805 $ 4,584,705 $ 5,042,121 $ 5,076,949

Net revenues (expenses) Governmental activities$ (10,833,138) $ (11,226,886) $ (13,541,133) $ (13,929,219) Business-type activities 7,498 (40,367) (46,191) (74,079) Total primary governmental expense (10,825,640) (11,267,253) (13,587,324) (14,003,298)

Source: District Audited Financial Statements

S - 4 June 30, 2009 2010 2011 2012* 2013 2013

$ 12,493,857 $ 12,966,000 $ 13,070,759 $ 13,132,793 $ 13,854,381 $ 14,664,112 2,296,669 2,247,914 2,054,437 1,862,704 1,817,312 1,826,777 1,663,309 1,819,372 1,620,451 1,782,393 * 1,665,302 1,895,704 1,568,148 1,697,303 1,767,747 1,649,803 1,562,826 1,743,662 206,927 177,060 296,797 205,255 354,106 297,644 491,152 497,454 476,055 438,085 450,470 455,163 22,265 28,516 32,793 28,537 28,106 32,128 757,819 1,061,975 1,129,028 1,097,340 1,059,622 1,196,039 17,819 18,091 21,715 25,145 24,972 25,102 19,517,965 20,513,685 20,469,782 20,222,055 20,817,097 22,136,331

811,968 811,762 856,389 848,806 856,877 914,390

20,329,933 21,325,447 21,326,171 21,070,861 21,673,974 23,050,721

21,230 11,744 19,218 22,084 16,996 7,325 37,880 38,491 41,657 37,418 34,321 32,110 55,847 33,550 29,146 23,299 27,304 29,131 3,854,434 4,763,722 4,316,054 3,334,698 3,754,582 3,686,611 531,274 968,261 1,323,846 722,827 720,197 731,106 4,500,665 5,815,768 5,729,921 4,140,326 4,553,400 4,486,283

313,021 243,553 211,361 193,693 183,636 290,939 464,581 544,418 572,403 614,865 624,662 646,088 777,602 787,971 783,764 808,558 808,298 937,027

$ 5,278,267 $ 6,603,739 $ 6,513,685 $ 4,948,884 $ 5,361,698 $ 5,423,310

$ (15,017,300) $ (14,697,917) $ (14,739,861) $ (16,081,729) $ (16,263,697) $ (17,650,048) (34,366) (23,791) (72,625) (40,248) (48,579) 22,637 (15,051,666) (14,721,708) (14,812,486) (16,121,977) (16,312,276) (17,627,411)

S - 5 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA EXPENSES, PROGRAM REVENUES, AND NET (EXPENSE)/REVENUE continued Last ten fiscal years Accrual basis of accounting Unaudited

2005 2006 2007 2008 General Revenues Governmental activities Taxes: Property taxes levied for general purposes, net 6,111,033 6,672,370 6,635,066 7,288,544 Public utility realty, earned income and per 778,936 913,408 865,064 938,222 capita taxes levied for general purposes, net Grants, subsidies and contributions not restricted 4,422,743 4,679,866 5,328,817 5,654,707 Investment earnings 329,406 364,681 387,352 284,750 Miscellaneous Income 31,890 25,525 48,658 21,786 Special item - Contribution of capital asset - - - - Transfers (25,000) (32,137) (7,200) (89,000) Total governmental activities 11,649,008 12,623,713 13,257,757 14,099,009

Business-type activities Investment earnings 219 457 474 442 Miscellaneous income 3,343 3,216 - - Transfers 25,000 32,137 7,200 89,000 Total business-type activities 28,562 35,810 7,674 89,442

Total primary government 11,677,570 12,659,523 13,265,431 14,188,451

Changes in net position Governmental activities 815,870 1,396,827 (283,376) 169,790 Business-type activities 36,060 (4,557) (38,517) 15,363 Total primary government$ 851,930 $ 1,392,270 $ (321,893) $ 185,153

Source: District Audited Financial Statements * Restated

S - 6 June 30, 2009 2010 2011 2012 2013 2014

7,489,278 7,952,194 8,219,438 8,221,565 8,456,873 8,920,285 890,027 947,073 869,901 872,684 926,543 926,278

6,604,860 6,639,364 6,353,225 6,797,018 6,776,203 6,906,925 252,676 184,351 190,312 188,466 42,671 18,434 18,611 34,161 27,233 21,239 21,073 21,716 ------(10,500) (70,000) (35,000) (84,029) (34,265) 15,255,452 15,746,643 15,590,109 16,065,972 16,139,334 16,759,373

560 408 515 423 244 163 ------10,500 70,000 35,000 84,029 34,265 560 10,908 70,515 35,423 84,273 34,428

15,256,012 15,757,551 15,660,624 16,101,395 16,223,607 16,793,801

238,152 1,048,726 850,248 (15,757) (124,363) (890,675) (33,806) (12,883) (2,110) (4,825) 35,694 57,065 $ 204,346 $ 1,035,843 $ 848,138 $ (20,582) $ (88,669) $ (833,610)

S - 7 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA GOVERNMENTAL FUNDS - FUND BALANCES Last ten fiscal years Modified accrual basis of accounting Unaudited

2005 2006 2007 2008 General Fund Nonspendable 3)$ - $ - $ - $ - Restricted 30,694 19,955 29,175 34,163 Committed 977,000 1,150,146 1,460,000 1,194,320 Assigned Unassigned 1,690,832 1,552,719 1,524,101 1,354,959 Total general fund$ 2,698,526 $ 2,722,820 $ 3,013,276 $ 2,583,442

All other governmental funds Assigned Debt service$ - $ - $ - $ - Capital purposes 4,710,690 2,359,757 1,001,768 972,756 Athletic purposes 4) 508 449 112 7,532 Total all other governmental funds$ 4,711,198 $ 2,360,206 $ 1,001,880 $ 980,288

Notes: 1) This schedule is prepared on the modified accrual basis of accounting. 2) During the fiscal year ended June 30, 2011, the District implemented GASB 54, Fund Balance Reporting and Governmental Fund Type Definitions, to address issues related to how fund balance was being reported. Prior years fund balance has been converted to the new reporting categories. 3) Nonspendable is not separately reflected for fiscal years prior to 2011. 4) Due to GASB 54, effective with fiscal year end 2011, the athletic purposes are now reported as part of the general fund activities.

Source: District Audited Financial Statements

S - 8 June 30, 2009 2010 2011 2012 2013 2014

$ - $ - $ 26,869 $ 29,329 $ 15,664 $ 24,868 28,047 20,729 6,727 13,868 14,695 8,272 1,293,850 1,554,425 1,714,056 1,100,000 1,000,000 900,000 816,313 1,432,815 643,497 1,406,932 1,806,311 1,913,775 1,357,840 372,721 541,068 $ 2,728,829 $ 3,381,465 $ 3,661,427 $ 3,317,350 $ 2,835,895 $ 2,117,705

$ - $ - $ - $ - $ - $ 2,952 208,195 5,222,534 879,634 872,819 843,448 629,014 1,570 1,570 - - - - $ 209,765 $ 5,224,104 $ 879,634 $ 872,819 $ 843,448 $ 631,966

S - 9 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA GOVERNMENTAL FUNDS - CHANGES IN FUND BALANCES Last ten fiscal years Modified accrual basis of accounting Unaudited

2005 2006 2007 2008

Revenues Local Sources Real estate taxes and penalties$ 6,111,432 $ 6,746,480 $ 6,648,817 $ 7,199,532 Other taxes 772,271 913,408 865,064 938,223 Interest 329,406 364,681 387,352 284,750 Revenue from intermediate sources 317,963 316,021 417,336 421,524 Tuition 7,090 18,772 31,292 14,408 Revenue from student activities 79,335 60,826 58,341 68,149 Other revenue 36,548 66,800 90,840 64,504 Refund of prior year expenses 162 1,802 6,440 820 Total local sources 7,654,207 8,488,790 8,505,482 8,991,910

State sources 6,801,037 7,580,309 8,464,319 8,761,022 Federal sources 673,267 563,315 681,864 695,989

Total revenues 15,128,511 16,632,414 17,651,665 18,448,921

Expenditures Current: Instruction 9,034,094 9,239,267 10,261,815 10,970,348 Support services 3,935,431 4,730,312 4,771,783 4,871,797 Operation of noninstructional services 356,724 398,807 466,222 456,057 Total current expenditures 13,326,249 14,368,386 15,499,820 16,298,202 Capital outlay Facilities acquisition, construction 5,824,241 7,106,493 2,314,126 - and improvement services Total capital outlay 5,824,241 7,106,493 2,314,126 - Debt service Principal 860,000 1,270,000 1,505,000 1,410,000 Interest and fiscal charges 592,454 756,517 746,160 703,145 Total debt service 1,452,454 2,026,517 2,251,160 2,113,145

S - 10 June 30, 2009 2010 2011 2012 2013 2014

$ 7,438,360 $ 7,932,848 $ 8,216,483 $ 8,268,913 $ 8,349,905 $ 8,872,885 879,027 947,073 869,901 872,684 926,543 926,278 252,676 184,351 190,312 188,466 42,671 18,434 475,792 766,428 603,131 454,261 535,659 373,079 21,230 11,744 19,218 22,084 16,996 7,325 76,561 55,329 57,510 47,091 72,072 39,673 71,357 104,533 92,361 119,995 95,750 75,279 - 9,500 85,734 13,811 - 34,553 9,215,003 10,011,806 10,134,650 9,987,305 10,039,596 10,347,506

9,652,621 9,758,881 9,220,045 9,647,891 9,811,222 10,243,894 826,375 1,784,593 2,030,036 653,450 818,610 641,121

19,693,999 21,555,280 21,384,731 20,288,646 20,669,428 21,232,521

11,721,048 12,568,479 12,247,891 12,366,589 12,823,747 13,503,600 5,504,140 6,047,909 5,551,031 5,211,691 5,160,827 5,520,083 561,936 508,699 490,799 442,140 450,647 457,091 17,787,124 19,125,087 18,289,721 18,020,420 18,435,221 19,480,774

879,955 11,603,753 4,528,233 15,455 33,583 158,839

879,955 11,603,753 4,528,233 15,455 33,583 158,839

1,220,000 1,285,000 1,455,000 1,490,000 1,585,000 8,525,000 690,139 829,337 1,107,763 1,078,663 1,042,788 1,032,145 1,910,139 2,114,337 2,562,763 2,568,663 2,627,788 9,557,145

S - 11 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA GOVERNMENTAL FUNDS - CHANGES IN FUND BALANCES continued Last ten fiscal years* Modified accrual basis of accounting Unaudited

2005 2006 2007 2008

Refund or prior year's receipts - 14,060 138 -

Total expenditures 20,602,944 23,515,456 20,065,244 18,411,347

Excess (deficiency) of revenues (5,474,433) (6,883,042) (2,413,579) 37,574 over expenditures

Other financing sources (uses) Interfund transfers (25,000) - (7,200) (489,000) Bond issue proceeds - - - - Debt service on refinancing - - - - Refund of prior year expenditures - - - - Sale/compensation for capital assets 560 - 1,960 - Total other financing sources (uses) (24,440) - (5,240) (489,000)

Net change in fund balances$ (5,498,873) $ (6,883,042) $ (2,418,819) $ (451,426)

Ratio of debt service to noncapital expenditures 9.83% 12.35% 12.68% 11.48%

Source: District Audited Financial Statements

S - 12 June 30, 2009 2010 2011 2012 2013 2014

7,915 7,915 896 - - -

20,585,133 32,851,092 25,381,613 20,604,538 21,096,592 29,196,758

(891,134) (11,295,812) (3,996,882) (315,892) (427,164) (7,964,237)

- - (70,000) (35,000) (84,029) (34,265) 9,055,798 9,055,798 - - - 7,068,830 (8,790,000) (8,790,000) ------200 200 2,374 - 367 - 265,998 265,998 (67,626) (35,000) (83,662) 7,034,565

$ (625,136) $ (11,029,814) $ (4,064,508) $ (350,892) $ (510,826) $ (929,672)

9.69% 9.95% 12.29% 12.48% 12.48% 32.91%

S - 13 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA GENERAL FUND REVENUES AND OTHER FINANCING SOURCES BY SOURCE Last ten fiscal years Modified accrual basis of accounting Unaudited

Fiscal Year: 2005 2006 2007 2008

Local Sources: Real Estate Taxes (Current)$ 5,611,670 $ 6,072,328 $ 6,159,949 $ 6,774,541 Interim Real Estate Taxes 2,059 12,760 3,976 3,972 Public Utility Tax 7,994 10,792 11,231 11,301 Payment in Lieu of Tax 14,400 11,000 11,000 11,000 Per Capita Taxes - Sec. 679 21,534 21,044 20,179 19,925 (Current) Per Capita Taxes - Act 511 43,051 52,583 53,141 39,850 (Current) Earned Income Taxes 675,072 818,988 762,824 838,831 (Current) Delinquent Taxes 497,703 661,392 491,580 433,038 Earnings from Investments 69,387 240,713 262,680 248,560 Other Sources 410,698 419,904 566,220 524,694

State Sources: Instructional Subsidy 4,406,391 4,640,570 5,297,739 5,606,900 State Property Tax Reduction - - - - Rentals & Sinking Payments 384,469 749,793 796,135 648,712 Special Education 1,080,193 1,110,514 1,142,076 1,150,350 Transportation 13,272 12,040 13,204 11,307 Retirement Subsidy 165,444 183,952 313,921 350,477 Social Security Subsidy 282,075 297,933 325,865 341,184 Other Sources 468,956 584,807 574,721 651,451

Federal Sources: Total Federal Sources 673,267 563,315 681,864 695,989

Other Sources: Total Other Sources 560 25 1,960 -

Total revenues and other financing sources$ 14,828,194 $ 16,464,453 $ 17,490,266 $ 18,362,082

Source: District Audited Financial Statements

S - 14 June 30, 2009 2010 2011 2012 2013 2014

$ 6,894,125 $ 7,320,882 $ 7,632,223 $ 7,655,268 $ 7,855,701 $ 8,277,249 1,225 8,865 5,442 9,184 8,600 7,275 10,004 11,422 11,878 12,389 12,399 11,589 11,000 11,000 11,000 11,000 11,000 11,000 21,664 21,272 20,946 20,417 20,590 20,071

57,265 51,042 56,411 51,561 52,202 52,649

776,857 849,750 764,237 777,135 830,686 821,937

545,247 605,689 584,247 604,643 485,270 597,392 228,308 138,171 171,985 183,837 38,459 16,711 589,093 904,483 774,514 643,431 720,476 529,910

6,120,962 5,875,893 5,571,781 6,149,297 6,140,126 6,270,045 634,892 636,407 635,873 635,863 636,077 636,265 358,733 740,680 553,182 722,827 720,197 731,106 1,169,619 1,244,453 1,176,993 1,176,993 1,176,993 1,176,993 11,924 11,374 11,542 12,155 11,565 13,690 238,650 256,807 312,047 437,457 612,340 879,628 357,728 376,474 387,285 364,628 354,500 376,493 759,525 616,217 571,342 148,671 159,424 159,674

826,375 1,784,593 2,030,036 653,450 818,610 641,121

200 2,800 2,901 - 367 -

$ 19,613,397 $ 21,468,273 $ 21,285,865 $ 20,270,206 $ 20,665,582 $ 21,230,798

S - 15 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA GENERAL FUND EXPENDITURES AND OTHER FINANCING USES BY FUNCTION Last ten fiscal years Modified accrual basis of accounting Unaudited

Fiscal Year: 2005 2006 2007 2008

Current: Instruction: Regular programs -$ 5,680,746 $ 5,861,535 $ 6,556,980 $ 7,401,621 elementary/secondary Special programs - 2,211,944 2,302,888 2,650,397 2,985,989 elementary/secondary Vocational education programs 257,174 275,443 252,591 280,053 Other instructional programs - 884,230 798,381 800,749 300,210 elementary/secondary Community/Junior College - 1,020 1,098 2,475 Support Services: Pupil personnel 381,563 496,029 625,172 672,765 Instructional staff 668,440 722,272 823,822 959,616 Administration 860,137 869,625 843,402 893,216 Pupil health 188,140 212,805 229,861 283,806 Business office 189,776 245,871 274,867 277,802 Operation and maintenance of plant 1,082,494 1,185,926 1,366,839 1,334,469 Student transportation services 142,253 152,422 169,469 150,481 Central support 239,163 262,001 239,993 242,829 Other support services 7,300 7,746 7,265 7,152 Noninstructional services: Student activities 205,230 213,698 275,600 283,076 Community services 18,294 20,421 19,926 15,211 Facilities Improvements: - - - - Debt Service: - - 138 -

Total current expenditures 13,016,884 13,628,083 15,138,169 16,090,771

Refund of prior year's receipts - 14,060 - -

Other financing uses 1,558,973 2,798,017 2,061,641 2,701,145

Total expenditures and other financing uses$ 14,575,857 $ 16,440,160 $ 17,199,810 $ 18,791,916

Source: District Audited Financial Statements

S - 16 June 30, 2009 2010 2011 2012 2013 2014

$ 8,008,637 $ 8,219,047 $ 7,946,081 $ 7,642,438 $ 7,804,423 $ 7,804,363

3,094,490 3,569,611 3,653,266 4,144,729 4,515,697 5,154,042

327,522 353,682 310,766 286,986 273,371 291,032 289,192 330,585 335,988 292,437 230,256 254,163

1,207 990 1,790 - - -

675,434 711,301 705,103 672,823 709,370 793,779 1,308,498 1,203,387 920,762 863,152 835,090 713,192 865,249 945,191 886,684 914,382 987,902 1,037,783 286,816 351,779 422,052 350,189 256,014 265,269 295,377 282,680 290,021 291,188 305,387 320,625 1,432,116 1,596,904 1,623,745 1,497,221 1,382,893 1,564,799 206,927 177,060 296,797 205,254 354,106 297,644 312,382 510,337 387,885 402,470 324,858 328,848 6,757 5,784 5,860 5,211 5,207 5,376

307,415 353,998 453,705 413,603 422,541 424,963 22,243 28,444 32,782 28,537 28,106 32,128 ------

17,440,264 18,640,779 18,273,287 18,010,620 18,435,221 19,288,006

7,915 42 896 1 - -

2,019,830 2,174,816 2,733,290 2,603,663 2,711,817 2,660,982

$ 19,468,009 $ 20,815,637 $ 21,007,473 $ 20,614,284 $ 21,147,038 $ 21,948,988

S - 17 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA GENERAL FUND COST PER PUPIL FOR EXPENDITURES AND OTHER FINANCING USES Last ten fiscal years Unaudited

2005 2006 2007 2008 2009

Total current expenditures$ 13,016,884 $ 13,628,083 $ 15,138,169 $ 16,090,771 $ 17,440,264

Current Expenditures per pupil$ 8,910 $ 9,277 $ 10,579 $ 11,213 $ 12,675

Total expenditures and other financing uses$ 14,575,857 $ 16,440,160 $ 17,199,810 $ 18,791,916 $ 19,468,009

Total Expenditures per pupil$ 9,977 $ 11,191 $ 12,019 $ 13,095 $ 14,148

$18,000

$16,000

$14,000 Current expenditures per $12,000 pupil Total expenditures per pupil $10,000

$8,000

$6,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

S - 18 30-Jun 2010 2011 2012 2013 2014

$ 18,640,779 $ 18,273,287 $ 18,010,620 $ 18,435,221 $ 19,288,006

$ 13,676 $ 13,466 $ 13,624 $ 14,083 $ 14,459

$ 20,815,637 $ 21,007,473 $ 20,614,284 $ 21,147,038 $ 21,948,988

$ 15,272 $ 15,481 $ 15,593 $ 16,155 $ 16,454

S - 19 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years Unaudited

Assessed Value Calendar Residential Industrial Commercial Agricultural Total Taxable Year Property Property Property Property Assessed Value

2005* 270,905,600 18,404,000 66,760,200 250,500 356,320,300

2006 271,349,800 18,245,400 66,444,100 500,500 356,539,800

2007 273,143,900 19,932,000 64,972,900 543,000 358,591,800

2008** 273,310,800 19,773,500 64,291,000 549,500 357,924,800

2009 273,050,600 19,396,000 62,044,000 582,400 355,073,000

2010 273,050,600 19,396,000 62,044,000 582,400 355,073,000

2011 273,308,700 20,285,300 60,744,400 582,800 354,921,200

2012 273,025,000 20,221,200 62,597,500 619,500 356,463,200

2013 273,062,000 20,212,400 62,614,000 612,400 356,500,800

2014 274,029,300 18,425,200 62,515,700 613,100 355,583,300

Sources: Lancaster County Assessment Office State Tax Equalization Board

*County-wide reassessment done in Lancaster County, Pennsylvania **Estimated as of 11-9-2012 ***Calculated at 100% of the total direct tax rate times assessed value. No reduction has been taken for anticipated collection rates. **** Per $1,000 of assessed value

S - 20 Total Estimated Assessed Value Direct Actual Total Real Total as a percentage Tax Rate*** Taxable Value*** Market Value Assessed Value of Real Market Value

18.77 6,688,132 269,743,300 357,940,900 132.70%

18.77 6,692,252 298,528,100 358,147,100 119.97%

20.66 7,408,507 298,908,100 358,506,600 119.94%

23.00 8,232,270 323,714,200 358,591,800 110.77%

24.36 8,648,513 323,045,600 403,900,800 125.03%

25.37 9,008,202 355,007,900 401,658,200 113.14%

25.37 9,004,351 344,635,685 401,978,000 116.64%

26.00 9,268,043 359,960,926 404,185,300 112.29%

27.37 9,757,427 357,839,552 404,042,900 112.91%

28.20 10,027,449 ***not available*** 403,561,700 --

S - 21 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA PROPERTY TAX RATES (PER $1,000 OF ASSESSED VALUATION) DIRECT AND OVERLAPPING GOVERNMENTS Last ten collection (calendar) years Unaudited

COLUMBIA BOROUGH BOROUGH SCHOOL OF LANCASTER YEAR DISTRICT COLUMBIA COUNTY TOTAL

2005 1) 18.770 5.760 2.962 27.492

2006 18.770 6.260 2.962 27.992

2007 20.660 6.260 3.189 30.109

2008 23.000 7.750 3.416 34.166

2009 24.357 8.000 3.416 35.773

2010 25.370 8.000 3.416 36.786

2011 25.370 8.000 3.416 36.786

2012 26.000 8.000 3.416 37.416

2013 27.370 8.000 3.735 39.105

2014 28.200 8.000 3.735 39.935

Source: Local Government Officials

1) County-wide reassessment done in Lancaster County, Pennsylvania

S - 22 This page intentionally left blank

S - 23 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA PROPERTY TAX LEVIES AND COLLECTIONS Last ten fiscal years Unaudited

Base Levy Adjusted for Current Year of Assessed Homestead Homestead Property Tax Levy Valuation Exemption (2) Millage Exemption Collections

2004-2005$ 309,168,600 $ - 20.00 $ 6,183,372 $ 5,613,729

2005-2006 (1)$ 357,871,100 $ - 18.77 $ 6,717,243 $ 6,085,088

2006-2007$ 358,499,300 $ - 18.77 $ 6,729,034 $ 6,200,960

2007-2008$ 359,116,300 $ - 20.66 $ 7,419,343 $ 6,809,564

2008-2009$ 358,604,200 $ 27,603,629 23.00 $ 7,613,015 $ 6,929,002

2009-2010$ 357,758,700 $ 26,117,400 24.36 $ 8,077,787 $ 7,357,537

2010-2011$ 355,389,600 $ 25,052,027 25.37 $ 8,380,666 $ 7,664,673

2011-2012$ 354,921,200 $ 25,083,289 25.37 $ 8,367,988 $ 7,684,644

2012-2013$ 357,028,600 $ 24,464,700 26.00 $ 8,646,661 $ 7,886,344

2013-2014$ 356,802,200 $ 23,245,827 27.37 $ 9,129,439 $ 8,307,055

Source: District Financial Reports

(1) County-wide reassessment done in Lancaster County, Pennsylvania

(2) State of Pennsylvania Tax Relief Assessment adjustment related to State Subsidy allocation

(3) Interim Tax is levied during the tax year. If levied early in the tax year the collection is more likely that toward the end of the tax year.

S - 24 Current Period Total Current Current Current Delinquent Property Property Tax Interim Tax Interim Tax Interim Tax Property and Tax Levy Collection Property Tax Property Tax Property Tax Interim Tax Collection Percentage Levy (3) Collections Percentage Collections Percentage

90.79%$ 5,262 $ 2,059 39.13%$ 164,816 93.41%

90.59%$ 13,529 $ 12,760 94.32%$ 277,360 94.72%

92.15%$ 8,942 $ 3,976 44.46%$ 177,366 94.72%

91.78%$ 11,457 $ 3,972 34.67%$ 158,482 93.83%

91.02%$ 2,650 $ 1,225 46.23%$ 220,557 93.90%

91.08%$ 20,370 $ 8,865 43.52%$ 228,251 93.78%

91.46%$ 5,597 $ 5,442 97.23%$ 183,442 93.65%

91.83%$ 9,522 $ 9,184 96.45%$ 192,757 94.14%

91.21%$ 10,640 $ 8,600 80.83%$ 152,512 92.96%

90.99%$ 18,091 $ 7,275 40.21%$ 170,260 92.75%

S - 25 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA CONSTRUCTION PERMITS AND MARKET VALUES Last ten calendar years Unaudited

Lancaster County Number Market of Units Value

2004 805 207,394,100

2005* 4,771 812,186,700

2006 4,801 534,587,800

2007 3,263 487,067,600

2008 2,611 378,074,100

2009 2,772 407,368,900

2010 2,450 353,655,300

2011 2,232 285,649,400

2012 2,295 262,960,100

2013 2,139 330,064,800

Source: Lancaster County Assessors Officials

Note: Amounts are based on interim appraisals for new construction and additions, which are added to the following year's real estate.

* Denotes new assessment year.

S - 26 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA GOVERNMENTAL FUNDS - MOST SIGNIFICANT OWN-SOURCE REVENUES Last Ten Fiscal Years Unaudited

Fiscal Property Other Year Taxes Taxes* Total

2005 6,111,033 778,936 6,889,969

2006 6,672,370 913,408 7,585,778

2007 6,635,066 865,064 7,500,130

2008 7,288,544 938,222 8,226,766

2009 7,489,278 890,027 8,379,305

2010 7,952,194 947,073 8,899,267

2011 8,216,483 869,901 9,086,384

2012 8,281,302 860,294 9,141,596

2013 8,522,421 935,478 9,457,899

2014 8,881,916 917,246 9,799,162

Source: District Financial Reports *Values do not include delinquent tax collections

S - 27 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA TEN LARGEST REAL PROPERTY TAXPAYERS Current year and nine years ago Unaudited

2014 Assessed Taxpayer Business/Property Value (1) Rank

Luthercare Residential facility$ 7,121,900 1

Supply Sales (Anvil International) Pipe fittings/iron castings 3,400,000 2

Helest Realty Corp/Colonial Metals Manufacturing 3,341,800 3

Susquehanna Valley Nursing Residential facility 3,290,900 4

M & M Realty Property holdings (15 properties) 3,016,800 5

R & S Manufacturing Electrical motors 2,863,000 6

Columbia Hospital Home Medical facility 2,746,200 7

Southern End Properties, Ltd. Shopping center 2,476,200 8

BHI Properties, LLP Property holdings (36 properties) 2,114,100 9

Timothy Funk Private investor - rentals 1,335,400 10

Cimarron Investments Office buildings/apts (5 properties) 1,091,500 10

Plane Street Housing Apartment complex

Safe Harbor Water Power Co. Rentals and property holdings

Total$ 32,797,800

Total real property taxables$ 355,583,300

Total taxables and exempts$ 403,561,700

Source: School District Officials

(1) Total assessed value of the ten largest individual real property listings by owner. There may be other additional smaller real property holdings by each owner listed or multiple individual properties owned that could total more in aggregate than the individual properties shown here.

(2) Lancaster County reassessed all properties effective 1/1/2005 so assessed value changes may be due to assessment change of valuations rather than changes to physical properties.

S - 28 Percentage Percentage of Total of Total Taxable 2004 Taxable District Assessed District Assessment Value Rank Assessment

2.00%$ 6,800,000 1 2.20%

0.96% 3,400,000 3 1.10%

0.94% 2,842,900 5 0.92%

0.93% 4,503,200 2 1.46%

0.85% 1,669,300 8 0.54%

0.81% 2,544,100 6 0.82%

0.77% 2,937,700 4 0.95%

0.70% 2,262,300 7 0.73%

0.59%

0.31%

1,263,200 9 0.41%

1,243,200 10 0.40%

9.22%$ 29,465,900 9.53%

$ 309,103,200

$ 349,275,800

S - 29 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA BANK DEPOSIT INFORMATION Last ten calendar years Unaudited

Total Bank Deposits

LANCO Total FDIC Insured Union Federal Institutions June 30, Community Bank* Credit Union** Lancaster County*

2004$ 252,199,000 $ 37,574,392 $ 7,380,000,000

2005$ 287,038,000 $ 38,224,308 $ 7,677,000,000

2006$ 330,877,000 $ 38,349,384 $ 8,102,000,000

2007$ 356,822,000 $ 39,632,875 $ 8,371,000,000

2008$ 372,531,000 $ 42,037,764 $ 8,804,000,000

2009$ 425,932,000 $ 45,787,368 $ 9,053,000,000

2010$ 413,866,000 $ 52,533,762 $ 9,409,390,000

2011$ 475,019,000 (1)$ 58,433,764 $ 9,458,477,000

2012$ 433,456,000 $ 63,759,075 $ 9,857,381,000

2013$ 422,138,000 $ 68,150,846 $ 9,916,179,000

2014$ 430,203,000 $ 71,323,181 $ 10,300,464

Sources: * Federal Deposit Insurance Corporation Summary of Deposits ** CreditUnions.com by Callahan & Associates, Inc 1001 Connecticut Avenue, NW, 10th Floor, Washington, D.C. 20036

Note: (1) Union National Community Bank and Province Bank merged to become Union Community Bank #23257 - combining deposits. Province Bank Deposits 2010 = $85,053,000.

Information is only available on an institute-wide basis, as reported above, not by school district. Union Community Bank is the districts primary depository.

S - 30 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA GROSS PRINCIPAL DEBT OUTSTANDING and PER CAPITA PERCENT OF LONG-TERM DEBT June 30, 2014 Unaudited

As of Fiscal Year 2014 2013 2010 Ending June 30 G.O. Bonds G.O. Bonds G.O. Bonds Total 2015 270,000 695,000 335,000 1,300,000 2016 640,000 930,000 335,000 1,905,000 2017 645,000 940,000 345,000 1,930,000 2018 660,000 960,000 350,000 1,970,000 2019 665,000 980,000 355,000 2,000,000 2020 675,000 1,000,000 370,000 2,045,000 2021 695,000 1,030,000 375,000 2,100,000 2022 705,000 1,055,000 395,000 2,155,000 2023 725,000 1,085,000 415,000 2,225,000 2024 745,000 105,000 1,440,000 2,290,000 2025 2,220,000 2,220,000 2026 2,310,000 2,310,000 2027 2,065,000 2,065,000

Total $ 6,425,000 $ 8,780,000 $ 11,310,000 $ 26,515,000

Per Capita percent of long-term debt: * 5.47%

24.2% Series 2014 Fixed Rate Bonds $6,425,000 42.7% Series 2013 Fixed Rate Bonds $8,780,000 Series 2010 Fixed Rate Bonds $11,310,000 33.1%

Source: Debt Sinking Fund Statements

S - 31 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA COMPUTATION OF DIRECT AND OVERLAPPING DEBT** June 30, 2014 Unaudited

Gross Percent Governmental unit Outstanding Overlapping Direct Debt: Nonelectoral General Obligation Debt*$ 26,515,000 100.00% Total Direct Debt$ 26,515,000 Overlapping Debt: Lancaster County Career and Technology Center 227,391 Lancaster County General Obligation Bonds (1) 2,977,342 1.41% Total Overlapping Debt 3,204,733

Total Direct and Overlapping Debt:$ 29,719,733

*Includes Series of 2014, 2013, 2010 Bonds

** Note: The Local Government Unit Debt Act(Act 52 of 1978, re-enacted and amending Act 185 of 1972) describes debt limits for all local government units in Pennsylvania.

(1) Pro rata 1.17% share of the outstanding debt of the County of Lancaster ($254,473,700) as reported by the County as of November 1, 2014

Sources: Debt Sinking Fund Statements School District Annual Financial Reports Lancaster County Comptroller's Office

S - 32 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA COMPUTATION OF LEGAL DEBT MARGIN June 30, 2014 Unaudited

Total revenues and other sources less deductions for exclusions in accordance with the Local Government Unit Debt Act:

Fiscal Year Fiscal Year Fiscal Year Ended 6/30/2012 Ended 6/30/2013 Ended 6/30/2014

Net revenues:$ 19,547,380 $ 19,945,385 $ 20,499,692

Total revenues for three fiscal years, ending in 2012, 2013 and 2014$ 59,992,456 Borrowing base - average total revenues for three-year period 19,997,485

A. Non-electoral debt Outstanding principal Series 2014 6,425,000 Series 2013 8,780,000 Series 2010 11,310,000 Total non-electoral debt 26,515,000

Computation of non-electoral borrowing capacity A. Debt limit - 225% of borrowing base 44,994,342 B. Less: total non-electoral debt 26,515,000 C. 2013 borrowing capacity$ 18,479,342

Sources: Debt sinking fund statements School district annual financial reports

S - 33 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA LEGAL DEBT MARGIN INFORMATION Last ten fiscal years Unaudited

(A) (B) Three-year Legal Debt Legal Legal Fiscal Average Debt Applicable Debt Debt Year Revenue Limit to Limit Margin Margin %

2004-2005 13,341,158 30,017,606 15,349,181 14,668,425 48.87%

2005-2006 14,521,524 32,673,429 23,260,387 9,413,042 28.81%

2006-2007 15,617,505 35,139,386 18,550,796 16,588,590 47.21%

2007-2008 16,707,387 37,591,621 17,115,088 20,476,533 54.47%

2008-2009 17,877,388 40,224,123 16,243,256 23,980,867 59.62%

2009-2010 19,230,942 43,269,620 32,210,000 11,059,620 25.56%

2010-2011 20,242,631 45,545,920 30,755,000 14,790,920 32.47%

2011-2012 20,340,203 45,765,457 29,265,000 16,500,457 36.05%

2012-2013 20,080,400 45,180,900 27,680,000 17,500,900 38.74%

2013-2014 19,997,485 44,994,342 26,515,000 18,479,342 41.07%

(A) The total government debt act (Act 52 of 1978, re-enacting and amending Act 185 of 1972) describes debt limits for all local governments in Pennsylvania. The "Debt Act" is administered by the Pennsylvania Department of Community Affairs.

(B) 225% of borrowing base

Sources: Debt Sinking Fund Statements School District Annual Financial Reports LCCTC Annual Financial Reports

S - 34 This page intentionally left blank

S - 35 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA Last ten fiscal years Unaudited

Fiscal Year Bond Discounts Adjusted Median Gross (Net of Fiscal Assessed Household Outstanding Accumulated Year Population (1) Value (2) Income Bonded Debt Amortization)

2004-2005 10,311$ 309,168,600 $ 32,385 (3)$ 15,245,000 $ 169,224

2005-2006 10,311$ 357,871,100 $ 32,385 (3)$ 19,975,000 $ 211,222

2006-2007 10,311$ 358,499,300 $ 32,385 (3)$ 18,470,000 $ 19,243

2007-2008 10,311$ 359,116,300 $ 32,385 (3)$ 17,060,000 $ 174,915

2008-2009 10,311$ 358,604,200 $ 32,385 (3)$ 16,215,000 $ 167,821

2009-2010 10,311$ 357,758,700 $ 32,385 (3)$ 24,157,500 $ 411,568

2010-2011 10,400$ 355,389,600 $ 35,957 (4)$ 30,755,000 $ 384,690

2011-2012 10,400$ 354,921,200 $ 37,119 (5)$ 29,265,000 $ 357,812

2012-2013 10,400$ 357,028,600 $ 37,830 (6)$ 27,680,000 $ 330,934

2013-2014 10,382$ 356,802,200 $ 38,750 (7)$ 26,515,000 $ 302,136

Notes: (1) U.S. Census Bureau

(2) District Financial Reports

(3) U.S. Census Bureau 1999 dollars

(4) U.S. Census Bureau 2009 dollars

(5) U.S. Census Bureau 2006-2010 dollars

(6) 2007-2011 American Community Survey 5-Year Estimates

(7) 2008-2012 American Community Survey 5-Year Estimates

* The Department of Education has not issued reimbursement percentages for the latest construction projects; therefore, this is estimated. S - 36 Estimated Ratio of Estimated Fiscal Year Net Net Bonded Net Bonded Net Bonded Debt to Debt Per Outstanding Debt per Assessed Household Bonded Debt Capita Value (%) Income

$ 15,075,776 $ 1,462 4.88%$ 465.52

$ 19,763,778 $ 1,917 5.52%$ 610.28

$ 18,450,757 $ 1,789 5.15%$ 569.73

$ 16,885,085 $ 1,638 4.70%$ 521.39

$ 16,047,179 $ 1,556 4.47%$ 495.51

$ 23,745,932 $ 2,303 6.64%$ 733.24

$ 30,370,310 $ 2,920 8.55%$ 844.63

$ 28,907,188 $ 2,780 8.14%$ 778.77

$ 27,349,066 $ 2,630 7.66%$ 722.95

$ 26,212,864 $ 2,525 7.35%$ 676.46

S - 37 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA POPULATION TRENDS Last ten decades Unaudited

School Lancaster United Year District County Pennsylvania States

1920 * 173,797 8,720,017 106,021,537

1930 * 196,882 9,631,350 123,202,624

1940 * 212,504 9,900,180 132,164,569

1950 * 234,717 10,498,012 151,325,798

1960 * 278,359 11,319,366 179,323,175

1970 11,237 319,693 11,793,909 205,052,174

1980 10,466 362,346 11,863,895 227,224,681

1990 10,701 422,822 11,881,643 249,438,712

2000 10,311 470,658 12,281,054 281,421,906

2010 10,400 519,448 12,702,379 308,745,538

2013* 10,382 529,600 12,773,801 316,128,839

Source: U.S. Bureau of the Census, American Fact Finder

* Estimate Reported as revised as of 07/01/2013

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S - 39 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA DEMOGRAPHIC AND ECONOMIC STATISTICS Last ten calendar years Unaudited

LANCASTER COUNTY INFORMATION Personal Income (amounts Per Capita Local Calendar expressed in Personal Income Median Age Unemployment Year Population (1) thousands) (2) (2) (3) Rate (4)

2004 485,676 15,511,217 31,937 37.1 3.4%

2005 489,258 16,152,563 33,014 37.3 3.3%

2006 494,393 16,932,320 34,249 37.5 3.0%

2007 499,364 17,874,220 35,794 37.5 3.3%

2008 503,807 18,303,388 36,330 37.7 5.1%

2009 507,766 18,450,403 36,336 38.1 7.5%

2010 519,445 18,921,587 36,366 38.2 6.6%

2011 523,594 19,653,012 37,535 38.2 6.2%

2012 526,823 21119188 40,088 38.5 6.6%

2013 529,600 * * * *

Sources: (1) Population: 2000-2008 - Estimates updated by Bureau of Economic Analysis, U.S. Department of Commerce 2009 - Estimate provided by U.S. Census Bureau (2) Personal Income: 2000-2008 - Estimates updated by Bureau of Economic Analysis, U.S. Department of Commerce (3) Per Capita Personal Income: 2000-2008 Estimates updated by Bureau of Economic Analysis, U.S. Department of Commerce (4) Median Age: Population Estimates, U.S. Census Bureau (5) School Enrollment: PA Department of Education (6) Local Unemployment Rate: U.S. Department of Labor, Bureau of Labor Statistics

Note: Prior year data has been updated to the most current information available by going to the above sources.

* Information not available for this year. S - 40 COLUMBIA BOROUGH SCHOOL DISTRICT

County School Enrollment (5) Enrollment(5)

85,996 1,466

86,471 1,461

87,209 1,469

87,480 1,431

87,909 1,435

86,411 1,376

86,917 1,363

85,537 1,357

85,180 1,343

* 1,309

S - 41 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA TEN LARGEST AREA EMPLOYERS Last calendar year and nine years prior Unaudited

2014 Percentage of Total County LANCASTER COUNTY EMPLOYERS (1) Employees (2) Rank (1) Employment

Lancaster General Hospital 7,301 1 3.29% County of Lancaster 1,966 2 0.88% Ephrata Community Hospital Inc. 1,872 3 0.84% R.R.Donnelley & Sons Company * 4 * Turkey Hill LP 1,652 5 0.74% School District of Lancaster 1,580 6 0.71% Dart Container Corporation 1,548 9 0.70% Manheim Remarketing, Inc. * 7 * Armstrong World Industries, Inc. 1,500 10 0.67% Masonic Villages 1,336 8 0.60% Weis Markets, Inc. Total *

Total Employees in County 222,252 (1)

Source: County of Lancaster, Pennsylvania

(1) Center for Workforce Information & Analysis, PA Department of Labor & Industry (2) Individual Employers

* Data not available

S - 42 2004 Percentage of Total County Employees (2) Rank (1) Employment

5,519 1 2.34% 2,758 3 1.22% 1,704 6 70.00% *2 *

1,414 7 67.00% 1,362 10 59.00% * 5 85.00% 2,502 4 1.14% 1,265 9 63.00% *8 * *

225,022 (1)

S - 43 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA Lancaster County School District Selected Data with State Rankings Unaudited

Millage 2014-2015 Rate 2014- MV/PI 2012-13 2012-13 School District 2015 Aid Ratio Rank WADM ADM Rank Cocalico SD 22.3200 0.4890 354 3,794.840 3,307.456 159 Columbia Borough SD 28.2000 0.7289 65 1,697.482 1,474.600 356 Conestoga Valley SD 14.8330 0.3839 421 5,222.322 4,484.391 95 Donegal SD 22.0243 0.5546 281 3,450.628 3,020.992 181 Eastern Lancaster Co SD 14.4141 0.2884 462 3,725.993 3,249.066 164 Elizabethtown Area SD 18.3700 0.5250 317 4,550.581 3,995.963 121 Ephrata Area SD 19.6000 0.4784 363 5,807.456 4,275.546 104 Hempfield SD 19.4590 0.4019 411 7,925.968 6,930.790 46 Lampeter-Strasburg SD 19.6133 0.4232 400 3,665.437 3,177.727 169 Lancaster SD 26.6793 0.6982 95 13,189.975 11,428.427 14 Manheim Central SD 17.1848 0.3832 422 3,514.679 3,006.701 183 Manheim Twp SD 18.6409 0.3698 430 6,802.527 5,956.092 54 Penn Manor SD 17.6100 0.4832 358 6,080.496 5,295.855 71 Pequea Valley SD 17.4735 0.2349 471 2,078.529 1,747.277 308 Solanco SD 11.8040 0.4629 373 4,376.089 3,810.992 131 Warwick SD 19.7094 0.4720 367 5,180.543 4,502.013 94

Source: Pennsylvania Department of Education

Rank: 500 Pennsylvania School Districts MV/PI AR: Market Value/Personal Income Aid Ratio WADM: Weighted Average Daily Membership ADM: Average Daily Membership Eq Mills: Equalized Mills Pop/SqM: Population per Square Mile AIE/WADM: Actual Instruction Expense per Weighted Average Daily Membership Exp/ADM: Total Expenditures per Average Daily Membership

S - 44 2000 2012-13 2012-13 Pop per Sq AIE per 2012-13 Eq Mills Rank Mile Rank WADM Rank Exp per ADM Rank 20.8 127 421.2 207 $8,283.42 197 $14,295.09 220 25.8 39 3,903.4 35 $8,320.07 191 $14,340.86 218 14.8 377 509.2 185 $7,038.92 398 $12,167.70 422 22.2 96 468.1 192 $7,032.29 400 $13,530.44 287 13.9 408 300.9 247 $7,753.18 267 $14,011.03 245 19.4 168 491.1 190 $7,568.21 309 $12,714.69 373 19.5 166 693.2 157 $7,606.82 300 $13,051.19 329 18.7 205 982.8 124 $9,184.24 114 $14,848.21 177 19.4 168 531.5 179 $8,060.32 221 $13,764.25 267 24.0 65 5,223.8 16 $8,070.96 220 $15,275.60 150 16.2 320 263.1 264 $7,658.87 286 $14,948.94 170 18.6 209 1,388.8 103 $6,820.60 426 $12,648.65 380 16.7 294 329.8 234 $6,990.07 409 $12,487.15 397 16.0 329 241.2 277 $9,185.71 112 $17,098.12 79 12.8 447 153.6 326 $6,799.48 432 $12,357.95 404 18.4 219 710.1 154 $7,342.74 347 $12,852.04 352

S - 45 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA Lancaster County School District Student/Teacher Data Unaudited

2011-2012 School Year K-12 Classroom Student/ ELL District Total Schools Total Students Teachers FTE Teacher Ratio Students Cocalico 6 3,221 226.0 14.3 52 Columbia 3 1,325 103.5 12.8 31 Conestoga Valley 6 4,249 273.6 15.5 186 Donegal 6 2,864 163.6 17.5 58 Eastern Lancaster 5 3,091 197.3 15.7 67 Elizabethtown 8 3,963 247.8 16.0 44 Ephrata 7 4,148 246.2 16.9 116 Hempfield 10 6,947 459.6 15.1 284 Lampeter-Strasburg 5 3,085 195.0 15.8 34 Lancaster 20 10,851 765.0 14.2 1,956 Manheim Central 5 2,956 199.4 14.8 28 Manheim Township 9 5,926 374.6 15.8 230 Penn Manor 10 5,133 338.7 15.2 65 Pequea Valley 4 1,695 123.3 13.7 21 Solanco 7 3,680 234.5 15.7 33 Warwick 6 4,388 289.9 15.1 38

Source: Latest data available from the National Center for Education Statistics

S - 46 Percent IEP Percent ELL Students IEP 1.6% 513 15.9% 2.3% 309 23.3% 4.4% 577 13.6% 2.0% 425 14.8% 2.2% 394 12.7% 1.1% 534 13.5% 2.8% 718 17.3% 4.1% 1,140 16.4% 1.1% 426 13.8% 18.0% 2,234 20.6% 0.9% 441 14.9% 3.9% 736 12.4% 1.3% 932 18.2% 1.2% 320 18.9% 0.9% 546 14.8% 0.9% 583 13.3%

S - 47 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION Last ten fiscal years Unaudited

Fiscal Year: 2005 2006 2007 2008

FUNCTION: Governmental Activities Instructional Services Teachers 109.2 111.2 116.5 117.5 Aides 4.5 4.5 4.5 4.5 Support Services Pupil Personnel 7888 Instructional Staff 4444 Administrative 15 15 15 15 Pupil Health 3.2 3.2 3.2 3.2 Business 3333 Plant Operation and Maintenance 18.5 18.2 18.7 18.7 Central 2222 Non-instructional Services 14.38 14 14 13.75

Total full-time equivalent employees Governmental Activities 180.78 183.1 188.9 189.65

Business-Type Activities Total full-time equivalent employees Food Services 18 18.3 18.3 18.1

Total Primary Government Full-time equivalent employees 198.78 201.4 207.2 207.75

Student/Teacher Ratio 13.4 13.2 12.3 12.2

Source: District payroll records

Full-time equivalency based on 2,080 hours per fiscal year; full-time equivalency for instructional services personnel based on 1,365 hours per fiscal year

S - 48 November 1, 2009 2010 2011 2012 2013 2014

116.5 115.5 114.5 103.5 99.5 94.5 4.5 5.5 5.5 5.25 2.25 1.48

8 8.5 8.5 8 8 7 55543.53.5 15 15 14 14 14 13.5 3.2 3.2 3.2 3.2 3.2 3.2 333333 18.7 18.7 18.7 18.2 15.3 15.8 233333 13.5 13.5 13.38 12.38 11.09 10.2

189.4 190.9 188.78 174.53 162.84 155.18

18.1 18.1 18.01 14.05 11.62 11.53

207.5 209 206.79 188.58 174.46 166.71

11.8 11.8 11.9 12.8 13.2 14.1

S - 49 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA SALARY DATA FOR PROFESSIONAL STAFF As of November 1, 2014 Unaudited

SALARIES FOR PROFESSIONAL STAFF - CURRENT YEAR

Total number of full-time equivalent teachers - base salary only

Number of professional staff Number of professional Total of all SALARY GROUPS with BS, BS+ staff with M Ed, M Ed+ professional staff $80,000 and over 5 5 $75,000 - 79,999 5 5 $70,000 - 74,999 6 6 $65,000 - 69,999 12.5 12.5 $60,000 - $64,999 11.5 11.5 $57,000 - $59,999 5 5 $54,000 - $56,999 8 9 17 $51,000 - $53,999 2 6 8 $48,000 - $50,999 12.5 12.5 $45,000 - $47,999 4 1 5 $42,000 - $44,999 1 1 $39,000 - $41,999 14 14 Below $39,000

Total # of professional staff 29 73.5 102.5

B.S. M.Ed Highest Salary Actually Paid$ 55,585 $ 81,807 Lowest Salary Actually Paid$ 40,127 $ 47,791

Total salaries$ 5,840,440

Full-time equivalent professional staff 102.5

Average professional staff salary for 2014-15$ 56,979.90

Source: District Personnel Records

S - 50 Average professional staff salary ‐ ten years of data

$58,000 $56,000 Average salary $54,000 $52,000 $50,000 $48,000 $46,000 $44,000

S - 51 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA PROFESSIONAL AND ADMINISTRATIVE STAFF SUMMARY Five years of data Unaudited

2010 2011 Total Male Female Total Male Female

Total 134 37 97 126 33 93

Full Time 132 37 95 123 33 90 Part Time 2 0 2 3 0 3

Years of Service 1 or less 3 0 3 2 2 0 2 to 10 59 18 41 65 21 44 11 to 20 33 8 25 37 6 31 21 to 30 26 6 20 14 3 11 30+ 13 5 8 8 1 7

Age Under 30 23 4 19 22 5 17 30 to 50 64 22 42 60 19 41 Over 50 47 11 36 44 9 35

Education Degree Levels High School 1 1 0 1 1 0 Associates 1 1 0 1 1 0 Bachelors 38 16 22 30 14 16 Masters 91 17 74 92 16 76 Doctors 3 2 1 2 1 1

Description Elementary Teachers 51 9 42 57 8 49 Secondary Teachers 50 20 30 46 18 28 Guidance/Library/Nurse/Other 21 3 18 11 1 10

Total Instructional 122 32 90 114 27 87

Administrative/Supervisory 12 5 7 12 5 7

Source: District Personnel Records

S - 52 November 1, 2012 2013 2014 Total Male Female Total Male Female Total Male Female

122 36 86 122 36 86 119 36 83

114 32 82 113 34 79 110 33 77 844 927 9 3 6

1064 413 8 4 4 46 15 31 51 18 33 42 15 27 40 10 30 42 10 32 46 12 34 15 3 12 16 4 12 17 4 13 1138 936 6 1 5

17 5 12 20 4 16 17 5 12 71 23 48 75 23 52 75 23 52 34 8 26 31 9 22 27 8 19

110 110 1 1 0 000 000 0 0 0 34 17 17 41 18 23 42 20 22 85 17 68 79 16 63 75 15 60 211 110 1 0 1

55 11 44 55 11 44 52 11 41 44 18 26 44 16 28 45 18 27 11 1 10 11 2 9 10 2 8

110 30 80 110 29 81 107 31 76

12 5 7 12 7 5 12 5 7

S - 53 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA SUPPORT STAFF SUMMARY Five years of data Unaudited

2010 2011 Position Category Gender F/T P/T Total F/T P/T Total

Instructional aides Male 1 0 1 0 0 0 Female 2 0 2 2 1 3

Administrative support Male 0 0 0 0 0 0 Female 13 2 15 13 2 15

Library/media support Male 0 0 0 0 0 0 Female 2 0 2 1 0 1

Maintenance Male 13 3 16 12 2 14 Female 5 0 5 4 0 4

Cafeteria Male 0 0 0 0 1 1 Female 3 18 21 3 16 19

Computer technician Male 1 0 1 1 0 1 Female 0 0 0 0 0 0

Playground aides Male 0 1 1 0 0 0 Female 0 5 5 0 5 5

School monitor Male 0 0 0 0 0 0 Female 0 2 2 0 1 1

Health room assistant Male 0 0 0 0 0 0 Female 1 1 2 1 1 2

Total Male 15 4 19 13 3 16 Female 26 28 54 24 26 50

Total 41 32 73 37 29 66

Source: District Personnel Records S - 54 November 1, 2012 2013 2014 F/T P/T Total F/T P/T Total F/T P/T Total

000 000 0 0 0 011 011 0 1 1

000 000 0 0 0 12 2 14 12 2 14 11 3 14

000 000 0 0 0 101 011 0 1 1

12 6 18 10 6 16 9 4 13 404 505 5 1 6

011 022 1 1 2 3 16 19 3 17 20 2 18 20

101 101 1 0 1 000 000 0 0 0

000 000 0 0 0 055 055 0 5 5

000 000 0 0 0 000 000 0 0 0

000 000 0 0 0 112 112 1 1 2

13 7 20 11 8 19 11 5 16 21 25 46 21 27 48 19 30 49

34 32 66 32 35 67 30 35 65

S - 55 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA DISTRICT FACILITIES As of October 1, 2014 Unaudited

Original Construction Architectural Renovation Building 2014-2015 Date Area Date(s) Grades Capacity Enrollment Building

Elementary school buildings Park Elementary School Unknown 82,076 1981, 1997, 2006 K-4 706 557 Columbia Middle School - Taylor Campus* (formerly Taylor Elementary) 1988 37,370 1997, 2006 5-6 340 208

Secondary school building 1957 160,957 1989, 1997, 2010 1014 Columbia Middle School - Hill Campus 7-8 224 Columbia High School 9-12 357

Field House 1996 9,752 1996 Athletics n/a n/a

District Administration Center 1955 19,816 2005 Admin. n/a n/a

Note: Enrollments include all students housed and served in district-operated facilities

* Taylor Elementary was originally constructed in 1904 and renovated in 1960. In 1988, the original building was demolished and rebuilt. ** Does not include full-day Vo-Tech students Source: Pennsylvania Department of Education (PDE) and District records

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S - 57 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA ENROLLMENT PROJECTIONS Fifteen years of historical data Unaudited

YEAR K 1 2 3 4 5 6 Elementary 7

HISTORICAL DATA

1998-99 120 125 140 145 114 127 112 883 116 1999-00 125 132 110 137 126 109 120 859 114 2000-01 104 152 113 105 132 121 120 847 123 2001-02 108 140 122 119 110 128 130 857 135 2002-03 104 124 117 118 114 111 135 823 144

2003-04 98 128 102 114 106 115 107 770 139 2004-05 94 111 115 96 107 105 112 740 109 2005-06 127 100 110 113 95 100 112 757 114 2006-07 117 111 96 107 106 98 103 738 113 2007-08 129 114 112 101 100 105 104 765 111

2008-09 123 124 121 109 92 98 102 769 111 2009-10 113 120 121 106 107 91 97 755 103 2010-11 119 112 110 127 112 112 92 784 89 2011-12 132 114 113 109 117 114 107 806 89 2012-13 127 129 108 100 73 118 111 766 110 2013-14 130 118 126 100 100 85 113 772 109

Preliminary Data - as of 10/1/2014

2014-15* 135 132 134 121 110 107 107 846 114

Projected Data (as of 11/1/2011)

2015-16 137 129 131 132 117 110 108 864 98 2016-17 140 131 128 129 128 117 111 884 99 2017-18 142 133 130 126 125 128 118 902 102 2018-19 145 136 132 128 122 125 129 917 108 2019-20 147 138 135 130 124 122 126 922 118 2020-21 150 141 137 133 126 124 123 934 116

Source: Public School Enrollment Report (ESPE) and Pennsylvania Information Management System (PIMS) from the Pennsylvania Department of Education. Resident Live Birth File, 2009, supplied by the Division of Health Statistics, Pennsylvania Department of Health. *District Records as of 10/1/2014

Notes: Excludes students in full-time out-of-district special education, comprehensive AVTSs, charter schools, state-owned schools, consortium-operated alternative high schools, and juvenile correctional institutes.

S - 58 % of % Lancaster Lancaster 8 9 10 11 12 Secondary TOTAL Inc / -Dec County County

112 113 117 110 75 643 1,526 1.06% 69,364 2.20% 102 106 101 105 94 622 1,481 -2.95% 69,204 2.14% 120 104 101 99 91 638 1,485 0.27% 69,076 2.15% 128 106 102 109 84 664 1,521 2.42% 69,758 2.18% 133 119 114 106 97 713 1,536 0.99% 70,397 2.18%

132 114 113 114 84 696 1,466 -4.56% 70,068 2.09% 134 137 118 118 105 721 1,461 -0.34% 69,121 2.11% 113 129 130 114 112 712 1,469 0.55% 69,585 2.11% 113 105 133 128 101 693 1,431 -2.59% 69,835 2.05% 104 115 109 116 115 670 1,435 0.28% 69,621 2.06%

106 114 104 90 82 607 1,376 -4.11% 68,504 2.01% 111 101 117 91 85 608 1,363 -0.94% 68,265 2.00% 98 123 85 96 82 573 1,357 -0.44% 68,069 1.99% 80 95 100 69 83 516 1,322 -2.58% 68,192 1.94% 89 78 89 98 79 543 1,309 -0.98% 68,563 1.91% 103 94 77 83 96 562 1,334 1.91% 69,325 1.92%

99 103 79 72 71 538 1,384 3.75% 70,216 1.97%

109 103 98 67 62 537 1,401 1.23% 71,253 1.97% 94 114 98 83 58 546 1,430 2.07% 72,263 1.98% 95 98 109 83 72 559 1,461 2.17% 73,367 1.99% 98 99 93 92 72 562 1,479 1.23% 74,381 1.99% 103 102 94 79 79 575 1,497 1.22% 74,381 2.01% 113 108 97 80 68 582 1,516 1.27% 74,381 2.04%

S - 59 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA AVERAGE DAILY ATTENDANCE REPORT Last ten fiscal years Unaudited

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

Kindergarten ADA 92.339 115.775 108.976 119.312 116.201 ADM 97.331 121.505 115.190 125.446 122.379 Attendance 94.90% 95.30% 94.60% 95.10% 94.95%

Elementary ADA 628.317 616.375 605.056 622.837 625.369 ADM 659.911 645.484 632.932 654.361 656.256 Attendance 95.20% 95.50% 95.60% 95.20% 95.29%

Secondary ADA 687.633 681.274 645.881 619.374 595.353 ADM 754.690 745.974 711.478 683.153 658.867 Attendance 91.10% 91.30% 91.80% 90.70% 90.36%

District Total ADA 1,408.289 1,413.424 1,359.913 1,361.523 1,336.923 ADM 1,511.932 1,512.963 1,459.600 1,462.960 1,437.502 Attendance 93.10% 93.40% 93.20% 93.10% 93.00%

Source: Pennsylvania Department of Education, District records

ADA - Average Daily Attendance ADM - Average Daily Membership

S - 60 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

108.380 111.787 125.010 127.206 115.930 115.212 117.882 131.492 134.12 121.859 94.07% 94.83% 95.07% 94.78% 95.13%

611.056 631.169 642.592 636.502 618.406 644.352 665.007 671.173 667.598 645.379 94.83% 94.91% 95.74% 95.34% 95.82%

513.483 543.793 465.876 465.405 473.372 563.865 597.086 504.617 502.101 515.907 91.06% 91.07% 92.32% 92.69% 91.76%

1,232.919 1,286.749 1,233.478 1229.113 1,207.708 1,323.429 1,379.975 1,307.282 1303.911 1,283.145 93.16% 93.24% 94.35% 94.26% 94.12%

Attendance 94.50%

94.00%

93.50%

93.00% Attendance 92.50%

92.00%

S - 61 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA NATIONAL SCHOOL LUNCH PROGRAM FREE AND REDUCED DATA Last ten fiscal years Unaudited

Percentage of Participation Fiscal Year Building 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

Columbia Jr./Sr. High School Free 28.36% 36.56% 31.71% 30.02% 35.30% Reduced 9.01% 11.45% 8.80% 11.36% 8.05%

Park Elementary School Free 48.78% 53.32% 58.13% 63.96% 63.35% Reduced 10.64% 8.14% 7.57% 13.13% 12.71%

Taylor Elementary School Free 28.82% 35.35% 29.51% 28.93% 38.13% Reduced 10.07% 4.04% 11.11% 10.36% 7.36%

Total Free 34.96% 41.73% 39.76% 41.41% 45.51% Reduced 9.75% 8.86% 8.88% 11.76% 9.49%

Free/Reduced Trend 70.00% 60.00% 50.00% 40.00% Free 30.00% Reduced 20.00% 10.00% 0.00%

Source: Pennsylvania Department of Education

S - 62 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

40.99% 49.82% 50.09% 55.89% 54.21% 7.66% 6.01% 8.23% 5.23% 6.47%

65.24% 72.14% 73.85% 77.04% 75.98% 10.22% 8.10% 6.79% 5.01% 8.28%

36.25% 52.95% 43.68% 53.41% 45.95% 11.97% 4.73% 8.33% 4.75% 5.11%

48.28% 58.24% 56.90% 62.11% 59.62% 9.47% 6.42% 7.75% 5.00% 6.76%

S - 63 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA SCHEDULE OF INSURANCE FISCAL YEAR ENDED JUNE 30, 2015 Unaudited AMOUNTS TERM OR IN COVERAGE LIMITS YEARS EXPIRES 1. PROPERTY $88,072,295 1 7/1/2015 a. Building and contents $1,000,000 per occ./ annual aggregate for flood and earthquake Auto Physical Signs Valuable Papers Damage - ACV EDP Equipment hardware EDP Equipment in transit EDP Media/data software 2. EXCESS PROPERTY $400,000,000 1 7/1/2015 a. Building and contents occurrence excess of $2,000,000 $9,000,000 annual aggregate flood and earthquake 3. GENERAL LIABILITY $2,000,000 per occ./ 1 7/1/2015 a. General aggregate limit $4,000,000 annual aggregate $50,000 Fire Damage limit - any one fire - Damage to rented premises $5,000 medical 4. Excess liability$8,000,000 Each 1 7/1/2015 Occurrence per member

$8,000,000 Annual Member Aggregate

5. Boiler and machinery 1 7/1/2015 a. Equipment breakdown limit $100,000,000 - Property damage included - business income included - extra expense included - service interruption included - perishable goods included - computer equipment included - demolition and ICC $1,000,000 - expediting expense included - hazardous substances $2,000,000 - CFC refrigerants included - newly acquired locations $10,000,000 6. Automobile liability (w/personal injury) $2,000,000 1 7/1/2015 Uninsured motorists $1,000,000 Underinsured motorists $1,000,000 Hired Auto $1,000,000 Non-Owned Auto $1,000,000 $5,000 medical 7. Commercial crime 1 7/1/2015 Employee dishonesty $500,000/loss Forgery/alteration $500,000/loss Theft, disappearance $100,000/loss & destruction (inside and outside

S - 64 POLICY COMPANY NUMBER PREMIUM COMMENTS Great American 3128214 $31,168 $1,000 maintenance deductible Insurance Co. $100,000 SIR

Travelers Indemnity Insurance KTKXSP3D41215914 $15,338 Company of America

Great American 3128214 (Included in $1,000 maintenance deductible Insurance Co. Great American $100,000 SIR property premium)

Torus National Insurance Company 18154A133ALI $1,921 Deductible: N/A Includes: Each occurrence limit General aggregate limit Products completed operations aggregate Federal Insurance Company 76432847 $2,187 $1,000 deductible

Great American 3128214 (Included in $1,000 maintenance deductible Insurance Co. Great American $100,000 SIR property premium)

Travelers Casualty and Surety 105632675 $809 Deductible: $10,000 per Company of America occurrence

S - 65 COLUMBIA BOROUGH SCHOOL DISTRICT, PENNSYLVANIA SCHEDULE OF INSURANCE (continued) FISCAL YEAR ENDED JUNE 30, 2015 Unaudited AMOUNTS TERM OR IN COVERAGE LIMITS YEARS EXPIRES 8. SCHOOL BOARD LEGAL LIABILITY 1 7/1/2015 a. General aggregate limit $2,000,000 each claim./ $2,000,000 annual agg 9. School accident $1,000,000 1 8/27/2015 ‐ interscholastic sports/ maximum benefit football coverage (primary excess over $100) $1,000,000 ‐ voluntary student maximum benefit accident coverage 10. Storage tank system third$1,000,000 Each Claim/$2,000,000 Total for 1 1/1/2015 party liability and cleanup all Claims

11. Workers' compensation Specific Only 1 7/1/2015 insurance Specific Limit: Statutory Empl. Liabil. $1,000,000/occ./accid.

12. Life insurance Administrators: 1 7/1/2015 2 times salary Professional staff: $20,000 maximum Support staff: $20,000 (full‐time) 13. Accidental death and Administrators: 1 7/1/2015 dismemberment 2 times salary Professional staff: $20,000 maximum Support staff: $20,000 (full‐time)

S - 66 POLICY COMPANY NUMBER PREMIUM COMMENTS Great American 3128214 (Included in $1,000 maintenance deductible Insurance Co. Great American $100,000 SIR property premium) Ace American N01022696-3744-13-K14 $6,571 No deductible Insurance Company Plan AA Two year benefit indemnity period ‐ continuous coverage

Plan A School‐time rate ‐ $22.00 24‐hour rate ‐ $88.00 Nautilus Insurance Compa CST200108403 $2,515 Deductible: $2,500

Safety National Casualty SP40428799 Total premium: $48,615.8 Deductible: $450,000 each claim Company Loss Fund Allocation: $17,501.70 36% $19,446.33 40% $11,667.80 24% Fortis $0.13 of $1,000 Benefits covered payroll

Fortis $0.02 of $1,000 Benefits covered payroll

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Single Audit Section

Columbia Borough School District, Columbia, Pennsylvania

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SA - 1

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2014

Accrued or Accrued or Pass- Grant Total (Unearned) (Unearned) Federal through Period Program Received Revenue at Revenue at Federal Grantor/Pass through Source CFDA Grantor’s Beginning/ or Award for the July 1, Revenue June 30, Grantor/Program Title Code Number Number Ending Date Amount Year 2013 Recognized Expenditures 2014

U.S. DEPARTMENT OF EDUCATION Passed through the Pennsylvania Department of Education Title I - Improving Basic Programs I 84.010 013-14-0092 7/16/13-9/30/14 $ 591,897 $ 198,032 $ -- $ 296,405 $ 296,405 $ 98,373 Title I - Improving Basic Programs I 84.010 013-13-0092 7/2/12-9/30/14 650,001 169,172 46,752 122,420 122,420 -- Title I - School Improvement I 84.010 042-13-0092 5/30/13-9/30/14 100,806 88,946 -- 97,597 97,597 8,651

Total Title I 456,150 46,752 516,422 516,422 107,024

Title IIA I 84.367 020-14-0092 7/16/13-9/30/14 69,342 69,512 -- 69,342 69,342 (170)

Passed through the Lancaster-Lebanon SA Intermediate Unit No. 13 IDEA, Part B I 84.027 062-14-0013 7/1/13-9/30/14 326,101 326,101 -- 326,101 326,101 * -- -

2 IDEA - Preschool I 84.173 131-13-0013 7/1/13-6/30/14 2,451 2,451 -- 2,451 2,451 * -- IDEA - Preschool I 84.173 131-12-0013 7/1/12-6/30/13 1,707 1,707 1,707 ------

Total IDEA Cluster 330,259 1,707 328,552 328,552 --

TOTAL U.S. DEPARTMENT OF EDUCATION 855,921 48,459 914,316 914,316 106,854

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Passed through the Workforce Investment Board Temporary Assistance for Needy Families (TANF) I 93.558 13-TANF-03 7/1/13-6/30/14 18,000 -- -- 13,161 13,161 13,161

Passed through Pennsylvania Department of Public Welfare Medical Assistance Program – Administration I 93.778 N/A 7/1/13-6/30/14 N/A 11,883 -- 15,357 15,357 3,474

TOTAL U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 11,883 -- 28,518 28,518 16,635

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2014

Accrued or Accrued or Pass- Grant Total (Unearned) (Unearned) Federal through Period Program Received Revenue at Revenue at Federal Grantor/Pass through Source CFDA Grantor’s Beginning/ or Award for the July 1, Revenue June 30, Grantor/Program Title Code Number Number Ending Date Amount Year 2013 Recognized Expenditures 2014

U. S. DEPARTMENT OF AGRICULTURE Passed through the Pennsylvania Department of Education Fresh Fruit and Vegetable Program I 10.582 N/A 7/1/12-6/30/13 32,565 2,870 2,870 ------Fresh Fruit and Vegetable Program I 10.582 N/A 7/1/13-6/30/14 32,768 23,984 -- 29,128 29,128 5,144

Total Fresh Fruit and Vegetable Program 26,854 2,870 29,128 29,128 5,144

National School Lunch Program (NSLP) I 10.555 N/A 7/1/13-6/30/14 N/A 349,762 -- 408,383 408,383 * 58,621 National School Lunch Program (NSLP) I 10.555 N/A 7/1/12-6/30/13 N/A 56,685 56,685 ------School Breakfast Program I 10.553 N/A 7/1/13-6/30/14 N/A 78,440 -- 93,183 93,183 * 14,743

SA School Breakfast Program I 10.553 N/A 7/1/12-6/30/13 N/A 13,645 13,645 ------

-

Passed through the Pennsylvania Department of Agriculture 3

NSLP - Value of USDA Donated Commodities I 10.555 N/A 7/1/13-6/30/14 N/A (a) 50,820 (b) (2,138) 50,754 (c) 50,754 * (d) (2,204)

Total Child Nutrition Cluster 549,352 68,192 552,320 552,320 71,160

TOTAL U. S. DEPARTMENT OF AGRICULTURE 576,206 71,062 581,448 581,448 76,304

TOTAL EXPENDITURES OF FEDERAL AWARDS $ 1,444,010 $ 119,521 $ 1,524,282 $ 1,524,282 $ 199,793

D - Direct Funding I - Indirect Funding

Test of 25% Rule: (Low Risk Entity)

* Programs Selected for Testing: Child Nutrition Cluster 552,320 IDEA Cluster 328,552

Selected for Testing 880,872 Total Federal Expenditures 1,524,282 = 57.79%

The accompanying notes are an integral part of these financial statements. COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS JUNE 30, 2014

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

The accompanying Schedule of Expenditures of Federal Awards is prepared on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirement of OMB Circular A-133, Audits of States, Local Governments, and Non-profit Organizations.

NOTE 2 – VALUE OF USDA DONATED COMMODITIES LEGEND

a) Total commodities received from the Pennsylvania Department of Agriculture valued at fair market value. b) Beginning inventory at July 1, 2013. c) Total amount of commodities used. d) Ending inventory at June 30, 2014.

NOTE 3 – ACCESS PROGRAM

The ACCESS Program is a medical assistance program that reimburses local educational agencies for direct, eligible health-related services provided to enrolled special needs students. Reimbursements are federal money but are classified as fee-for-service revenues and are not considered federal financial assistance. Because only federal financial assistance is included on the Schedule of Expenditures of Federal Awards, ACCESS reimbursements are not included on the Schedule. The amount of ACCESS funding received for the year ended June 30, 2014 was $-0- which is listed on the PDE confirmation as program #044-007092 under CFDA #93.778. The District received $25,227 in ACCESS medical from Lancaster-Lebanon Intermediate Unit. The District also received $1,251 in ACCESS Transportation from Lancaster-Lebanon Intermediate Unit.

SA - 4

SAGER, SWISHER AND COMPANY, LLP Certified Public Accountants and Consultants Members

American Institute of 619 West Chestnut Street Certified Public Accountants Lancaster, Pennsylvania 17603 ______

Pennsylvania Institute of 15 North Third Street Certified Public Accountants Columbia, Pennsylvania 17512

Partners Consultants

John D. Murr, CPA Edward M. Sager (1932-2011) Michael L. Reiner, CPA C. Edwin Swisher, III, CPA, Inactive Lori L. Royer, CPA

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

Board of School Directors Columbia Borough School District Columbia, Pennsylvania

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of Columbia Borough School District as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the Columbia Borough School District’s basic financial statements, and have issued our report thereon dated November 20, 2014.

Internal Control Over Financial Reporting

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

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the school district’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

SA - 5

Lancaster 717-299-4563 www.sagerswisher.com Columbia 717-684-2077 Fax 717-299-1364 Fax 717-684-7433

Board of School Directors Columbia Borough School District Page 2

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Columbia Borough School District's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Sager, Swisher and Company, LLP

Columbia, Pennsylvania November 20, 2014

SA - 6 SAGER, SWISHER AND COMPANY, LLP Certified Public Accountants and Consultants Members

American Institute of 619 West Chestnut Street Certified Public Accountants Lancaster, Pennsylvania 17603 ______

Pennsylvania Institute of 15 North Third Street Certified Public Accountants Columbia, Pennsylvania 17512

Partners Consultants

John D. Murr, CPA Edward M. Sager (1932-2011) Michael L. Reiner, CPA C. Edwin Swisher, III, CPA, Inactive Lori L. Royer, CPA

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133

Board of School Directors Columbia Borough School District Columbia, Pennsylvania

Report on Compliance for Each Major Federal Program

We have audited Columbia Borough School District’s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of Columbia Borough School District’s major federal programs for the year ended June 30, 2014. Columbia Borough School District's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.

Management’s Responsibility

Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs.

Auditor’s Responsibility

Our responsibility is to express an opinion on compliance for each of Columbia Borough School District’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Columbia Borough School District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Columbia Borough School District’s compliance.

Opinion on Each Major Federal Program

In our opinion, Columbia Borough School District complied, in all material respects, with the types compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2014.

SA - 7

Lancaster 717-299-4563 www.sagerswisher.com Columbia 717-684-2077 Fax 717-299-1364 Fax 717-684-7433

Board of School Directors Columbia Borough School District Page 2

Report on Internal Control Over Compliance

Management of Columbia Borough School District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Columbia Borough School District's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Columbia Borough School District’s internal control over compliance.

Our consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be significant deficiencies.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiency in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2014-001 to be a significant deficiency.

The Columbia Borough School District's response to the internal control over compliance finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The District's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly this report is not suitable for any other purpose.

Sager, Swisher and Company, LLP

Columbia, Pennsylvania November 20, 2014

SA - 8

COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2014

Section I – Summary of Auditor’s Results

Financial Statements

Type of auditor’s report issued: Unmodified

Internal control over financial reporting:

• Material weaknesses identified? Yes X No • Significant deficiencies identified? Yes X None Reported • Noncompliance material to financial statements noted? Yes X No

Federal Awards

Internal control over major programs:

• Material weaknesses identified? Yes X No • Significant deficiencies identified? X Yes None Reported

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

• Any audit findings disclosed that are required to be reported in accordance with section 510(a) of OMB Circular A-133? Yes X No

Identification of major programs:

CFDA Numbers Name of Federal Program or Cluster

84.027/84.173 IDEA Cluster 10.553/10.555 Child Nutrition Cluster

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

Auditee qualified as low-risk auditee? X Yes No

Section II – Financial Statement Findings

There were no current year findings.

SA - 9 COLUMBIA BOROUGH SCHOOL DISTRICT COLUMBIA, PENNSYLVANIA

SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2014

Section III – Federal Award Findings and Questioned Costs

2014-001 Child Nutrition Cluster CFDA # 10.553/10.555 Food Service Production Reports Significant Deficiency

Condition and Criteria: Food service daily production reports were not prepared by cafeteria personnel and submitted to the Food Service Manager.

Effect: Documentation of daily food production was not available to compare to meal counts submitted on the claim forms.

Cause: Food Service Manager failed to provide the cafeteria personnel with the required daily production report forms to be prepared at the conclusion of daily meal service. While the staff maintained their logs, no production reports were prepared and submitted to the Food Service Manager.

Auditor’s Recommendation: We recommend that the food service production reports be prepared daily, reviewed for accuracy and are maintained by the appropriate district personnel.

Auditee’s Response: The Administration agrees with this finding. Please refer to the corrective action plan on page SA-11.

SA - 10

Columbia Borough School District, Columbia, Pennsylvania

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APPENDIX C

Description of the School District

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DESCRIPTION OF THE SCHOOL DISTRICT

The School District is a School District of the Third Class, organized and existing under the laws of the Commonwealth of Pennsylvania (the "Commonwealth or State").

The governing body of the School District is a Board of nine school directors who are each elected for a four-year term. The daily operation and management of the School District is carried out by the administrative staff of the School District, headed by the Superintendent of Schools, who is appointed by the Board of School Directors.

The School District, whose boundaries are coterminous with Columbia Borough, encompasses 2.7 square miles on the east bank of the Susquehanna River midway between the cities of York and Lancaster. Major urban centers are readily accessible as the School District is situated approximately 75 miles west of Philadelphia, 45 miles southwest of Reading and 90 miles southwest of Allentown, 15 miles east of York and 32 miles southeast of Harrisburg, the State Capital. Lancaster, the county seat, lies 10 miles to the east of the School District.

Although the School District is primarily residential in nature, its 10,311 residents have employment opportunities both within the School District and the surrounding area.

Demographic Characteristics

The following tables provide population trends, age, wealth and housing indices for the School District, Lancaster County and the Commonwealth of Pennsylvania.

Population and Density

2000 2010 Columbia Borough School District 10,311 10,400 Lancaster County 470,658 519,445 Commonwealth 12,281,054 12,702,379

Age Composition (2010)

Under 18 65 or Over Columbia Borough School District 23.0% 15.9% Lancaster County 24.8 15.0 Commonwealth 22.0 15.4

Income (5 Year Estimates) Families Below Median Family Income Poverty Level Columbia Borough School District $45,280 17.5% Lancaster County 64,672 6.7 Commonwealth 61,890 9.3

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Occupied Housing (2010)

Total Occupied Owner-Occupied Housing Housing Housing Units Units (%) Units (%) Columbia Borough School District 4,672 4,298 92.0% 2,430 52.0% Lancaster County 209,952 193,602 95.4 132,703 65.4 Commonwealth 5,567,315 5,018,904 90.1 3,491,722 62.7

Medical Facilities There are 4 general acute care hospitals and one rehabilitation hospital that serve Lancaster County. These hospitals, their licensed bed capacities and number of employees (full-time and part-time) are as follows:

Institution Location Licensed Beds Staff Lancaster County Full-Time Part-Time Ephrata Community Hospital Ephrata 130 1,327 762 Heart of Lancaster Regional Medical Center Lititz 148 363 101 Lancaster General Hospital Lancaster 631 4,960 1,297 Lancaster Regional Medical Center Lancaster 214 627 192 Lancaster Rehabilitation Hospital Lancaster 59 190 84 ______Source: Pennsylvania Department of Health, Bureau of Health Statistics; 2013 reporting period.

Higher Education

Lancaster County has a number of institutions of higher learning including:

 Elizabethtown College, a privately owned institution in Elizabethtown, which offers an undergraduate liberal arts education; Franklin and Marshall College, a coeducational liberal arts college in Lancaster; Millersville University, a State-owned institution in Millersville; the Lancaster campus of Harrisburg Area Community College; the Lancaster Campus of Penn State; Pennsylvania College of Art and Design, a member of the National Association of Schools of Art & Design; Lancaster Bible College, a four-year Christian career college unaffiliated with any denomination; Thaddeus Stevens College of Technology and the Lancaster General College of Nursing and Health Sciences.

In addition, the Lancaster Theological Seminary, and three vocational-technical schools are located within the County.

Transportation

All of the County's major highways converge on the City of Lancaster with the exception of the Pennsylvania Turnpike, which traverses the County in an east-west direction, 15 miles to the north. U.S. Route 30 crosses the Susquehanna River at Columbia, Pennsylvania, and meets Interstate Route 83 at York, Pennsylvania, 23 miles west of Lancaster. Interstate Route 83 provides a route to Washington and Baltimore. U.S. Route 222 runs in a north-south direction and connects with Reading, Allentown and Easton, and intersects the Pennsylvania Turnpike approximately 15 miles north of the City of Lancaster. Other major highways include Interstate Route 283 connecting Lancaster to Harrisburg, and State Route 501, which intersects the area providing access to Allentown, Bethlehem and Easton via the northeast extension of the Pennsylvania Turnpike to the east, and Wilkes-Barre, Scranton and Binghamton, New York, via Interstate Route 81 to the north.

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ECONOMY

Classification of Employment by Industry Lancaster County, Pennsylvania

The following is a breakdown of employment in Lancaster County for 2012 from the Pennsylvania Department of Labor & Industry. Average annual earnings for workers are included.

Average Average Monthly Total Wages Average Annual Industry Quarterly Units Employment (1000s) Wage

Lancaster County 12,594 218,416 $8,768,731 $40,147

AGRICULTURE, FORESTRY, FISHING AND HUNTING 180 2,313 77,099 33,333 MINING 17 364 17,386 47,763 UTILITIES 8 177 14,790 83,557 CONSTRUCTION 1,554 13,764 690,457 50,164 MANUFACTURING 886 36,094 1,843,204 51,067 WHOLESALE TRADE 717 11,857 562,888 47,473 RETAIL TRADE 1,834 29,020 702,314 24,201 TRANSPORTATION AND WAREHOUSING 402 9,060 366,278 40,428 INFORMATION 112 3,001 126,286 42,081 FINANCE AND INSURANCE 609 6,370 408,698 64,160 REAL ESTATE AND RENTAL AND LEASING 347 1,810 67,388 37,231 PROFESSIONAL AND TECHNICAL SERVICES 952 7,987 452,859 56,700 MANAGEMENT OF COMPANIES AND ENTERPRISES 88 3,439 309,428 89,976 ADMINISTRATIVE AND WASTE SERVICES 576 8,551 235,040 27,487 EDUCATIONAL SERVICES 102 3,431 137,799 40,163 HEALTH CARE AND SOCIAL ASSISTANCE 1,575 34,505 1,437,628 41,664 ARTS, ENTERTAINMENT, AND RECREATION 170 3,602 61,578 17,096 ACCOMMODATION AND FOOD SERVICES 987 18,430 272,155 14,767 OTHER SERVICES (EXCEPT PUBLIC ADMINISTRATION) 1,180 6,724 185,239 27,549 FEDERAL GOVERNMENT 71 1,232 70,898 57,547 LOCAL GOVERNMENT 270 15,847 686,639 43,329 STATE GOVERNMENT 31 2,071 113,579 54,843 ______Source: Pennsylvania Department of Labor & Industry, report completed Spring 2014. * Data that might be identified with an individual employer and/or data involving fewer than twenty-five employees are not published.

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Trends in Lancaster Labor Market Area Employment and Unemployment

Civilian Total Percentage Unemployed Year Labor Force Employment County Pennsylvania U.S. 2004 266,700 256,200 4.0 5.5 5.5 2005 270,400 260,600 3.6 5.0 5.1 2006 267,300 257,700 3.6 4.7 4.6 2007 267,400 258,400 3.4 4.4 4.6 2008 271,800 260,200 4.3 5.4 5.8 2009 269,700 250,200 7.2 8.1 9.3 2010 267,200 247,100 7.5 8.7 9.6 2011 266,400 248,100 6.8 7.9 8.5 2012 268,800 251,000 6.6 7.9 8.1 2013 268,600 252,100 6.1 7.4 7.4 2014 (October) 265,700 254,300 4.3 5.4 5.8

Source: Pennsylvania Department of Labor and Industry

Top Employers in Lancaster County

Name Description

Lancaster General Hospital Health Care Services Mutual Assistance Group Insurance County of Lancaster Government Ephrata Community Hospital Health Care Services RR Donnelley & Sons Company Printing THLP CO Inc. Dairy Products Dart Container Corporation Foodservice Products School District of Lancaster Education Manheim Remarketing Inc. Auto Auction Armstrong World Industries Inc. Manufacturing ______Source: Pennsylvania Center for Workforce Information & Analysis 1st Quarter 2014.

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SCHOOL FACILITIES

The school plant presently operated by the School District consists of one Junior-Senior High School (grades 7-12), and two Elementary Schools (grades K-6). School Year 2014-15

Reimbursable 2014-15 School Facilities Grades Pupil Capacity Enrollment ELEMENTARY Park K-6 706 557 Taylor Campus K-6 340 208 SECONDARY Junior-Senior High 7-12 1014 581

TOTAL ALL SCHOOLS 2,060 1,346

*Number of students physically educated in District facilities.

Source: School District Officials. Effective 7/1/2014, the schools will be renamed and grades will be adjuted as shown below:

Park Elementary School K-4 Columbia Borough Middle School – Taylor Campus 5-6 Middle School – Hill Campus 7-8 High School – Hill Campus 9-12

Pupil Enrollment - History

School Year Elementary Secondary Total 1999-00 859 622 1,481 2000-01 847 638 1,485 2001-02 857 664 1,521 2002-03 823 713 1,536 2003-04 770 696 1,466 2004-05 740 721 1,461 2005-06 757 712 1,469 2006-07 738 693 1,431 2007-08 771 630 1,401 2008-09 763 642 1,405 2009-10 793 672 1,465 2010-11 784 573 1,357 2011-12 810 515 1,325 2012-13 816 536 1,352 2013-14 754 543 1,297 2014-15 846 538 1,384

Note: Includes Intermediate Unit students.

Source: School District

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APPENDIX D

Proposed Form of Opinion of Bond Counsel

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APPENDIX D FORM OF BOND COUNSEL OPINION

Below is the Proposed Form of Bond Counsel Opinion Expected to be Delivered in Connection with the Issuance of the Bonds

[Dated Date of Issuance and Delivery of Bonds]

Columbia Borough School District Lancaster County, Pennsylvania

Re: $______Columbia Borough School District, Lancaster County, Pennsylvania General Obligation Bonds, Series of 2015

You have requested our opinion as to the legality of the above general obligation bonds (the “Bonds”). The Bonds are issued by the Columbia Borough School District, Lancaster County, Pennsylvania (the “School District”), under the provisions of the Local Government Unit Debt Act, 53 Pa. Cons. Stat. §8001 et seq., as amended (the “Act”), and pursuant to a resolution duly adopted by the Board of School Directors of the School District (the “Resolution”). The Bonds are being issued for the purpose of providing funds to pay the cost of the current refunding of a portion of the School District’s outstanding General Obligation Bonds, Series of 2010 and to pay the costs of issuing and insuring the Bonds.

The payment of the principal of, and interest on, the Bonds will be insured under a municipal bond insurance policy issued by ______.

The School District has covenanted in the Resolution (i) to include the amount of debt service for the Bonds for each fiscal year in which such sums are due and payable in its budget for that year; (ii) to appropriate such amounts from its general revenues for the payment of such debt service; and (iii) to duly and punctually pay, or cause to be paid, from its sinking fund or any other of its revenues or funds, the principal of, and interest on, the Bonds at the dates and places and in the manner stated in the Bonds, according to the true intent and meaning thereof; for such budgeting, appropriation and payment the School District in the Resolution has pledged its full faith, credit and taxing power.

As Bond Counsel to the School District we have examined originals or certified copies of the transcript of the proceedings of the School District filed with and approved by the Department of Community and Economic Development (the “Department”) of the Commonwealth of Pennsylvania (the “Commonwealth”), the Resolution, the form of the Bonds, such constitutional and statutory provisions and such other certificates, instruments and documents as we have deemed necessary or appropriate in order to enable us to render an informed opinion as to the matters set forth herein.

In rendering this opinion we have examined and relied upon (i) the opinion of counsel to the School District with respect, inter alia, to the due adoption by the School District of

the Resolution in accordance with applicable laws; and (ii) the accuracy of the statements and representations and the performance by the School District of its covenants set forth in the Resolution and the School District’s Tax Certificate delivered on this date in connection with the issuance of the Bonds.

As to questions of fact material to our opinion, we have relied upon the representations of the School District contained in the Resolution and in the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation.

Based on the foregoing, it is our opinion that:

1. The School District is authorized under the provisions of the Constitution and laws of the Commonwealth to issue the Bonds for the purposes above set forth, and the School District has authorized the issuance thereof.

2. As indicated in the School District’s debt statement filed with the Department in connection with the issuance of the Bonds, outstanding debt of the School District, including debt represented by the Bonds, is within the debt limitations of the Act.

3. The Bonds are valid and binding general obligations of the School District payable from the revenues of the School District from whatever source derived, which revenues at the time of the issuance and sale of the Bonds, include ad valorem taxes levied upon all the taxable property within the School District, within limitations provided by law.

4. Under the laws of the Commonwealth of Pennsylvania as presently enacted and construed, the Bonds are exempt from personal property taxes in Pennsylvania, and interest on the Bonds is exempt from Pennsylvania personal income tax and corporate net income tax.

5. Interest on the Bonds, and accruals of original interest discount, are excludable from gross income for federal income tax purposes under existing laws as enacted and construed on the date of initial delivery of the Bonds. Interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on certain corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. The opinions set forth in the preceding two sentences are subject to the condition that the School District comply with all the requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest on the Bonds be (or continue to be) excluded from gross income for federal income tax purposes. Failure to comply with such requirements could cause the interest on the Bonds to be included in gross income retroactively to the date of issuance of the Bonds. The School District has covenanted in the Resolution to comply with all such requirements. We express no opinion regarding other federal tax consequences arising with respect to the Bonds.

It is to be understood that the rights of the owners of the Bonds and the enforceability of the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium or other laws now or hereafter enacted by any state or the federal government affecting the enforcement of creditors’ rights generally, and “enforceable in accordance with its 2

(their) terms” shall not mean that specific performance would necessarily be available as a remedy in every situation.

We have not been engaged to express and do not express any opinion herein with respect to the adequacy of the security for the Bonds or the sources of payment for the Bonds. We express no opinion herein as to the accuracy, adequacy or completeness of the Official Statements relating to the Bonds. We express no opinion with respect to any matters not specifically set forth herein.

This opinion letter is limited to the matters set forth herein. This opinion is subject to future changes in applicable law and we do not undertake any obligation to update any of the opinions expressed in this letter. No opinion may be inferred or implied beyond the matters expressly stated herein, and our opinions expressed herein must be read in conjunction with the assumptions, limitations, exceptions and qualifications set forth herein. The law covered by the opinions expressed herein is limited to the laws of the Commonwealth and the federal law of the United States of America.

MCNEES WALLACE & NURICK LLC

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APPENDIX E

Specimen of Municipal Bond Insurance Policy

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APPENDIX F

Proposed Form of Continuing Disclosure Certificate

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CONTINUING DISCLOSURE CERTIFICATE

THIS CONTINUING DISCLOSURE CERTIFICATE (the “Disclosure Certificate”) is executed and delivered by the COLUMBIA BOROUGH SCHOOL DISTRICT, Lancaster County, Pennsylvania (the “School District”) in connection with the issuance and sale of its $______General Obligation Bonds, Series of 2015 (the “Bonds”), pursuant to the Local Government Unit Debt Act, Act of July 12, 1972, P.L. 781, No. 185, reenacted April 28, 1978, P.L. 124, No. 52, as amended (the “Act”), and the resolution adopted by the Board of School Directors of the School District on January 15, 2015 (the “Resolution”).

In consideration of the purchase of the Bonds by the Participating Underwriter (defined below), the School District, as an “obligated person” with respect to the Bonds within the meaning of Securities and Exchange Commission Rule 15c2-12, as amended from time to time (the “Rule”), hereby covenants, agrees and undertakes as follows: Section 1. Definitions. The definitions set forth in the Resolution shall apply to any capitalized term used in this Disclosure Certificate unless otherwise defined herein. In addition to such terms and the terms defined above, as used in this Disclosure Certificate, the following capitalized terms shall have the following meanings: “Annual Financial Statements” means the financial statements for the most recent fiscal year, prepared in accordance with guidelines adopted by the Government Accounting Standards Board and the American Institute of Certified Public Accountants' Audit Guide, Audits of State and Local Government. “Annual Report” means the annual report provided by the School District pursuant to Section 2(a) of this Disclosure Certificate. “Commonwealth” means the Commonwealth of Pennsylvania. “Disclosure Representative” means the proper officer of the School District or his designee. “Dissemination Agent” means the dissemination agent or any successor dissemination agent that has been designated in writing by the School District. “EMMA” means the Electronic Municipal Market Access system of the MSRB. As of the date of this Disclosure Certificate, information regarding submissions to EMMA is available at http://emma.msrb.org. “Event” means any of the events listed in Section 3(a) of this Agreement. “MSRB” means the Municipal Securities Rulemaking Board or any other board or entity which succeeds to the functions currently delegated to the Municipal Securities Rule Making Board by the Rule. “Official Statement” means the final Official Statement dated ______, together with any supplements thereto prior to the date on which the Bonds are initially executed and delivered. “Owner(s)” means the registered owner(s) of the Bonds, and so long as the Bonds are subject to the book-entry system, any person who, through any contract, arrangement or

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otherwise, has or shares investment power with respect to the Bonds, which includes the power to dispose or direct the disposition of the Bonds. “Participating Underwriter” means RBC Capital Markets, LLC, and any broker, dealer or municipal securities dealer acting as an underwriter in connection with the original underwriting or remarketing of the Bonds. “SEC” means the U.S. Securities and Exchange Commission. Section 2. Provision of Annual Report. (a) The School District shall provide, or cause a Dissemination Agent to provide, not later than 210 days after the end of each fiscal year of the School District, commencing with the School District’s fiscal year ending June 30, 2015, and annually thereafter while the Bonds remain outstanding, to the MSRB through EMMA an Annual Report. Not later than fifteen (15) Business Days prior to said date, the School District shall provide the Annual Report to the Dissemination Agent, if any. The Annual Report will consist of the following: (i) the Annual Financial Statements; and (ii) an updating of the information as set forth under Appendix A to the Official Statement, under the heading “TAX REVENUES OF THE SCHOOL DISTRICT.” (b) In the event that the Annual Financial Statements are not available within the time specified, unaudited financial statements shall be provided, and the Annual Financial Statements shall be submitted as soon as they are available. (c) The Annual Report may be provided to the MSRB through EMMA in one document or a set of documents submitted to the MSRB, or may be included by specific reference to documents available to the public on the MSRB’s Internet website or filed with the SEC. The Disclosure Representative shall clearly identify each such other document provided by cross reference. (d) The School District, or the Dissemination Agent, if any shall provide or cause to be provided, in a timely manner, proper submission to the MSRB through EMMA notice of any failure of the School District to timely provide the Annual Report. (e) Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues with respect to which the School District is an “obligated person” (as defined by the Rule), which have been filed through EMMA or the SEC. If the document incorporated by reference is a final official statement, it must be available through EMMA. The School District shall clearly identify each such other document so incorporated by reference. In the event the School District determines to so incorporate by reference any or all of the items listed above, it shall also file a notice through EMMA indicating that all or part of the School District’s financial and operating information for that year is contained in documents filed with the SEC or through EMMA. (f) If information in the Annual Report (other than the School District’s audited financial statements) can no longer be generated because the operations to which such information relates have been materially changed or discontinued, a statement to that effect shall satisfy the obligations of the School District under this Section 2, provided however that the School District shall, to the greatest extent feasible, provide in lieu thereof similar information with respect to any substitute or replacement operations.

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Section 3. Reporting of Events. (a) This Section 3 shall govern the giving of notice of the occurrence of any of the following Events with respect to the Bonds, such notice to be given not later than ten business days after occurrence: (i) principal and interest payment delinquencies; (ii) non-payment related defaults, if material; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on any credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (vii) modifications to rights of the Owners, if material; (viii) optional or unscheduled redemptions of any Bonds, if material; (ix) defeasance of the Bonds or any portion thereof; (x) release, substitution or sale of property securing repayment of the Bonds, if material; (xi) rating changes; (xii) tender offers; (xiii) bankruptcy, insolvency, receivership or similar event of the School District; (xiv) consummation of a merger, consolidation, or acquisition, or certain asset sales, involving the School District, or entry into or termination of a definitive agreement relating to the foregoing, if material; and (xv) appointment of a successor or additional paying agent or the change of name of the paying agent, if material.

The SEC requires the listing of clauses (i) through (xv) above, although some of such events may not be applicable to the Bonds. (b) Whenever the Disclosure Representative obtains knowledge of the occurrence of an Event, the Disclosure Representative shall as soon as possible determine if such Event would constitute material information for Owners; provided, however, that any Event under clauses (i), (iii), (iv), (v), (vi), (ix), (xi), (xii) and (xiii) of paragraph (a) above shall always be deemed to be material. (c) If the Disclosure Representative determines that knowledge of the occurrence of an Event, the Disclosure Representative shall file, in a timely manner, a notice of such occurrence with the MSRB via EMMA; provided, however, that notice of Events described in clauses (viii) and (ix) of paragraph (a) above need not be given under this paragraph any earlier than the notice (if any) of the underlying event is given to the affected Owners pursuant to the Resolution.

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Section 4. Manner of Submission. The Annual Report and notices required to be submitted to the MSRB pursuant to this Disclosure Certificate shall be submitted through EMMA in an electronic format, and shall be accompanied by identifying information, in the manner prescribed by the MSRB. Section 5. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the School District 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 annual information or notice of occurrence of an event which is not an Event, in addition to that which is required by this Disclosure Certificate; provided, however, that the School District shall not be required to do so. If the School District chooses to include any annual information or notice of occurrence of an event in addition to that which is specifically required by this Disclosure Certificate, the School District shall have no obligation under this Disclosure Certificate to update such information or include it in any future annual filing or notice of occurrence of an Event. Section 6. Term. This Disclosure Certificate shall be in effect from and after the initial execution and delivery of the Bonds and shall extend to the earlier of (a) the date all principal and interest on the Bonds shall have been deemed paid pursuant to the terms of the Resolution; (b) the date that the School District shall no longer constitute an “obligated person” within the meaning of the Rule; and (c) the date on which those portions of the Rule that require this Disclosure Certificate are determined to be invalid by a court of competent jurisdiction in a non-appealable action have been repealed retroactively or otherwise do not apply to the Bonds, which determination shall be evidenced by an opinion of nationally recognized municipal bond counsel selected by the Disclosure Certificate. The School District shall file a notice of any termination of this Disclosure Certificate with the MSRB. Section 7. Use of a Dissemination Agent. The School District may, from time to time, appoint or engage a Dissemination Agent to assist the School District in carrying out its obligations under Sections 2, 3 and 4 hereof, and may discharge such dissemination agent with or without appointing a successor dissemination agent. Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the School District may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is otherwise consistent with the Rule. Written notice of any such amendment or waiver shall be provided by the School District to the MSRB through EMMA, and the Annual Report shall explain the reasons for the amendment and the impact of any change in the type of information being provided. If any amendment changes the accounting principals to be followed in preparing financing statements, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The School District shall provide notice of any such amendment or waiver to the MSRB through EMMA. Section 9. Default and Enforcement. If the School District fails to comply with any provision of this Disclosure Certificate, any Owner may take action to seek specific performance by court order to compel such party to comply with its obligations under this Disclosure Certificate; provided, however, that any Owner seeking to require compliance with

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this Disclosure Certificate shall first provide to the School District at least 30 days’ prior written notice of the School District’s failure, giving reasonable details of such failure, after which the School District shall have 30 days to comply; and, provided further, that only the Owners of not less than a majority in aggregate principal amount of the outstanding Bonds may take action to seek specific performance in connection with a challenge to the adequacy of the information provided by the School District in accordance with this Disclosure Certificate, after notice and opportunity to comply as provided herein, and such action shall be taken only in a court of jurisdiction in the School District. A DEFAULT UNDER THIS DISCLOSURE CERTIFICATE SHALL NOT BE DEEMED AN EVENT OF DEFAULT UNDER THE RESOLUTION OR THE BONDS, AND THE SOLE REMEDY UNDER THIS DISCLOSURE CERTIFICATE IN THE EVENT OF ANY FAILURE OF THE SCHOOL DISTRICT TO COMPLY WITH THIS DISCLOSURE CERTIFICATE SHALL BE AN ACTION TO COMPEL PERFORMANCE. Section 10. Miscellaneous. (a) The School District acknowledges and understands that other federal and state laws, including, but not limited to, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated there under may apply to the School District, and that under some circumstances compliance with this Disclosure Certificate, without additional disclosures or other action, may not fully discharge all duties and obligations of the School District under such laws. (b) This Disclosure Certificate is made for the benefit of the Owners and in order to allow the Participating Underwriter to comply with the Rule, shall inure solely to the benefit of the Participating Underwriter and Owners from time to time of the Bonds and shall create no rights in any other person or entity. (c) If any provision hereof shall be held invalid or unenforceable by a court of competent jurisdiction, the remaining provisions hereof shall survive and continue in full force and effect. (d) This Disclosure Certificate shall be governed by and interpreted in accordance with the laws of the Commonwealth; provided that, to the extent that the SEC, the MSRB or any other federal or state agency or regulatory body with jurisdiction over the Bonds shall have promulgated any rule or regulation governing the subject matter hereof, this Disclosure Certificate shall be interpreted and construed in a manner consistent therewith.

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IN WITNESS WHEREOF, the School District has caused this Disclosure Certificate be signed in its name by the undersigned officer, thereto duly authorized, all as of the ____th day of ______, 2015.

COLUMBIA BOROUGH SCHOOL DISTRICT Lancaster County, Pennsylvania

By: President

Peck Shaffer draft of 1/6/2012

Signature Page to Continuing Disclosure Certificate

APPENDIX G

Bond Amortization Schedule

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$9,995,000* COLUMBIA BOROUGH SCHOOL DISTRICT Lancaster County, Pennsylvania General Obligation Bonds, Series of 2015

Bonds Dated: Date of Delivery Interest Payable: June 1 and December 1 Principal Due: June 1 as shown below First Interest Payment: June 1, 2015 Denominations: Integral multiples of $5,000 Form: Book-Entry Only

Fiscal Year Payment Semiannual Ended Fiscal Year Date Principal Due Interest Interest Debt June 30 Debt Service Rate Payment Service

June 1, 2015 December 1, 2015 June 1, 2016 December 1, 2016 June 1, 2017 December 1, 2017 June 1, 2018 December 1, 2018 June 1, 2019 December 1, 2019 June 1, 2020 December 1, 2020 June 1, 2021 December 1, 2021 June 1, 2022 December 1, 2022 June 1, 2023 December 1, 2023 June 1, 2024 December 1, 2024 June 1, 2025 December 1, 2025 June 1, 2026 December 1, 2026 June 1, 2027

TOTAL

*Preliminary, subject to change.

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