Ogunquit and Wells, Maine

OFFICIAL STATEMENT DATED AUGUST 12, 2014

NEW ISSUE

Moody’s: Aa3 Banking & Advisory Group S&P: AA+ In the opinion of Drummond Woodsum & MacMahon of Portland, Maine, Bond Counsel, under existing statutes, regulations, and court decisions, and assuming compliance with certain covenants, interest on the Bonds is excludable from the gross income of the owners thereof for federal income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), 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 the computation of certain taxes that may be imposed with respect to corporations, including, without limitation, adjusted current earnings of a corporation for purposes of computation of the alternative minimum tax and the foreign branch profits tax. Bond Counsel is also of the opinion that interest payable on the Bonds is not subject to State of Maine (the “State”) income taxes imposed upon individuals under existing statutes, regulations, and court decisions. The Bonds will not be designated as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code. See “THE BONDS—TAX MATTERS” and “APPENDIX D”.

WELLS-OGUNQUIT COMMUNITY SCHOOL DISTRICT (Ogunquit and Wells, Maine) $26,850,000 2014 GENERAL OBLIGATION BONDS Dated: Date of Delivery Due: November 1, as shown below Year of Interest Yield or Year of Interest Yield or Maturity Amount Rate Price Maturity Amount Rate Price 2015 $1,345,000 2.00% 0.25 2025 $1,340,000 3.00% 2.60 2016 1,345,000 2.00 0.36 2026 1,340,000 3.00 2.80 2017 1,345,000 2.00 0.70 2027 1,340,000 3.00 100 2018 1,345,000 2.00 0.90 2028 1,340,000 3.00 3.05 2019 1,345,000 2.00 1.25 2029 1,340,000 3.00 3.15 2020 1,345,000 2.00 1.50 2030 1,340,000 3.00 3.25 2021 1,345,000 2.00 1.75 2031 1,340,000 3.125 3.35 2022 1,345,000 3.00 2.00 2032 1,340,000 3.25 3.45 2023 1,345,000 3.00 2.20 2033 1,340,000 3.375 3.50 2024 1,345,000 4.00 2.35 2034 1,340,000 3.375 3.55

The 2014 General Obligation Bonds (the “Bonds”) will be issued as fully-registered certificates without coupons and, when issued, will be registered in the name of Cede & Co., as Bondowner and nominee for The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. Purchases of the Bonds will be made in book- entry form, in the denomination of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their interest in Bonds purchased. See “THE BONDS—BOOK-ENTRY-ONLY SYSTEM” herein. Principal and interest on the Bonds will be paid to DTC by U.S. Bank, National Association, Boston, Massachusetts, as Paying Agent. Interest on the Bonds will be payable on May 1, 2015 and semi-annually on each November 1 and May 1 thereafter until maturity, or redemption prior to maturity.

The legal opinion of Bond Counsel, will be provided to the original purchaser and will indicate that the Bonds are valid general obligations of Wells-Ogunquit Community School District (the “District”) and, unless paid from other sources, are payable as to both principal and interest from ad valorem taxes which may be levied without limit as to rate or amount upon all the property within the territorial limits of the District (which territory includes the towns of Ogunquit and Wells, Maine) and taxable by it, except to the extent that any municipality within the territory of the District may enter into an agreement under Title 30-A, Chapter 223, Subchapter V of the Maine Revised Statutes, as amended, to share its assessed valuation with another municipality; and except to the extent that any municipality within the territory of the District establishes or has established development districts either as tax increment financing districts or affordable housing development districts pursuant to Title 30-A, Chapters 206 and former 207 (now repealed) of the Maine Revised Statutes, as amended, the captured tax increment of which may not be available for payment of debt service on the Bonds. The Treasurer of each municipality within the territory of the District has certified that no agreements under Chapter 223, Subchapter V or Title 30-A, Chapters 206 and former 207 (now repealed) of the Maine Revised Statutes, as amended, now exist. The opinion will indicate that the enforceability of the obligations of the District, including the Bonds, are subject to and may be limited by bankruptcy, insolvency, moratorium and other laws affecting the rights and remedies of creditors generally, and are subject to general principles of equity. The opinion will be dated and given on and will speak as of the date of original delivery of the Bonds to the original purchasers.

Bonds maturing on and after November 1, 2025 are subject to redemption prior to maturity, at the option of the District, on or after November 1, 2024 as more fully set forth herein (see “THE BONDS—OPTIONAL REDEMPTION PRIOR TO MATURITY” herein).

The Bonds are offered when, as and if issued, subject to the approval of legality by Drummond Woodsum & MacMahon of Portland, Maine, Bond Counsel. It is expected that the Bonds in definitive form will be available for delivery to DTC on or about August 28, 2014. No dealer, broker, salesman or other person has been authorized by the Issuer or the Underwriter to give any information or to make any representations, other than those contained in this Official Statement, in connection with the offering of the Bonds, and if given or made, such information or representations must not be relied upon as having been authorized by any of the foregoing. 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. The information set forth herein has been obtained from the Issuer and other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by, any party other than the Issuer. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the condition or affairs of the Issuer since the date hereof.

THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS ANY INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAWS OF THE STATES IN WHICH THE BONDS HAVE BEEN REGISTERED OR QUALIFIED, AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES, CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NONE OF THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.

TABLE OF CONTENTS

CERTIFICATE CONCERNING OFFICIAL INDEBTEDNESS STATEMENT 1 Limitations and Exclusions 38 District Debt Summary 39 THE BONDS Projected Principal Payments of the District, Description of the Bonds 2 by Issue 40 Optional Redemption Prior to Maturity 2 Projected Debt Service Requirements of the General Provisions Regarding Redemption District 40 of the Bonds 3 Debt Ratios 41 Record Date; Payment 4 Overlapping Debt 41 Authorization and Purpose 4 Contingent Debt 41 Source of Payment and Remedies 6 Future Financing 41 Tax Matters 9 Book-Entry-Only System 11 RETIREMENT CUSIP Identification Numbers 13 A. Defined Benefit Pension Plan – Ratings 13 Consolidated Plan 42 Continuing Disclosure 14 B. Defined Benefit Pension Plan – Financial Advisor 14 Teachers Group 42 Statutory References 14 C. Social Security 43 Conditions Precedent to Delivery 14 D. Other Post Employment Benefits 43

ORGANIZATION OF SCHOOL ENVIRONMENTAL MATTERS 43 ADMINISTRATIVE UNITS IN MAINES School Governance Structures in Maine 16 LITIGATION 43 Community School Districts in Maine 17 APPENDIX A: WELLS-OGUNQUIT COMMUNITY DISTRICT FINANCIAL STATEMENTS SCHOOL DISTRICT General 20 APPENDIX B: The Alternative Plan 20 TOWN OF OGUNQUIT, MAINE FINANCIAL The Member Communities 20 STATEMENTS Government 22 Labor Relations 22 APPENDIX C: The Schools 23 TOWN OF WELLS, MAINE FINANCIAL Enrollments 23 STATEMENTS Economic Characteristics 25 APPENDIX D: DISTRICT FINANCES PROPOSED FORM OF LEGAL OPINION Budgetary Process 26 Investment Policy 27 APPENDIX E: Fund Balance 27 PROPOSED FORM OF CONTINUING Financial Statements 29 DISCLOSURE CERTIFICATE Funds 29 Comparative Financial Statements 29 District Comparative Balance Sheet 30 District Comparative Statement of Revenues, Expenditures and Changes in Fund Balances 31 Ogunquit Comparative Financial Statements 32 Wells Comparative Financial Statements 33 Property Taxation 34 Revenues from the State 36 District’s Local Cost Budget and Assessments 36

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CERTIFICATE CONCERNING OFFICIAL STATEMENT

The information contained herein has been prepared by Wells-Ogunquit Community School District (the “District”) with the assistance of Moors & Cabot, Inc., its Financial Advisor, from the District’s records and from various other public documents and sources which are believed to be reliable. There has been no independent investigation of such information by the Financial Advisor or by Drummond Woodsum & MacMahon, its Bond Counsel, and such information is not guaranteed as to accuracy or completeness and is not intended to be a representation by the Financial Advisor or Bond Counsel.

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

To the best of the knowledge and belief of the undersigned, this Official Statement does not contain any untrue statement of a material fact and does not omit to state any material fact necessary to make the statements made herein, in the light of the circumstances under which they were made, not misleading, subject to the condition that while information in the Official Statement obtained from sources other than the District is not guaranteed as to accuracy, completeness or fairness, the undersigned has no reason to believe that such information is materially inaccurate or misleading. A certificate to this effect, with such if any corrections, changes and additions as may be necessary, will be signed by the undersigned and furnished at the closing.

This Official Statement is in a form “deemed final” by the issuer for purposes of Securities and Exchange Commission’s Rule 15c2-12(b) [17 C.F.R. §240.15c2-12(b)] except for the omission from the Preliminary Official Statement of such information as is permitted by such Rule.

Ellen Schneider, Treasurer Wells-Ogunquit Community School District

OFFICIAL STATEMENT WELLS-OGUNQUIT COMMUNITY SCHOOL DISTRICT (OGUNQUIT AND WELLS, MAINE) $26,850,000 2014 GENERAL OBLIGATION BONDS

This Official Statement is provided for the purpose of presenting certain information relating to the sale of the above-referenced Wells-Ogunquit Community School District (the “District”) 2014 General Obligation Bonds in the aggregate principal amount of $26,850,000 (the “Bonds”).

THE BONDS DESCRIPTION OF THE BONDS

The Bonds will be dated the date of delivery and will be issued only as fully-registered bonds without coupons, one certificate per maturity, and, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York City, New York (“DTC” or the “Securities Depository”). DTC will act as the securities depository for the Bonds. Purchases of the Bonds will be made in book-entry form, in the denomination of $5,000 or any integral multiple thereof and will bear interest, payable on May 1, 2015 and semi-annually thereafter on November 1 and May 1 of each year until maturity or redemption prior to maturity. The Bonds will mature annually as follows:

Amount Nov. 1, CUSIP Amount Nov. 1, CUSIP $1,345,000 2015 950078AG0 $1,340,000 2025 950078AS4 1,345,000 2016 950078AH8 1,340,000 2026 950078AT2 1,345,000 2017 950078AJ4 1,340,000 2027 950078AU9 1,345,000 2018 950078AK1 1,340,000 2028 950078AV7 1,345,000 2019 950078AL9 1,340,000 2029 950078AW5 1,345,000 2020 950078AM7 1,340,000 2030 950078AX3 1,345,000 2021 950078AN5 1,340,000 2031 950078AY1 1,345,000 2022 950078AP0 1,340,000 2032 950078AZ8 1,345,000 2023 950078AQ8 1,340,000 2033 950078BA2 1,345,000 2024 950078AR6 1,340,000 2034 950078BB0

It is expected that the Bonds will be available for delivery at DTC on or about August 28, 2014.

Principal of and interest on the Bonds will be payable in Clearing House Funds to DTC, or its nominee, as registered owner of the Bonds by U.S. Bank, National Association, Boston, Massachusetts, as paying agent (the “Paying Agent”). Transfer of principal and interest payments to Participants of DTC will be the responsibility of DTC. Transfer of principal and interest payments to Beneficial Owners (as hereinafter defined) will be the responsibility of such Participants and other nominees of Beneficial Owners. The District will not be responsible or liable for maintaining, supervising or reviewing the records maintained by DTC, its Participants or persons acting through such Participants. See “THE BONDS - BOOK-ENTRY-ONLY SYSTEM” herein.

OPTIONAL REDEMPTION PRIOR TO MATURITY

Bonds maturing on or before November 1, 2024 are not subject to redemption prior to their stated dates of maturity. Bonds maturing on or after November 1, 2025 are subject to redemption prior to their stated dates of maturity, at the option of the District, on and after November 1, 2024, as a whole or in part at any time, in such order of maturity as the District, in its discretion, may determine, at a price of par (100% of the principal amount to be redeemed), together with interest accrued and unpaid to the redemption date, if any (“Optional Redemption”).

GENERAL PROVISIONS REGARDING REDEMPTION OF THE BONDS

Notice of Optional Redemption

In the case of every Optional Redemption of the Bonds, the District shall cause notice of such Optional Redemption to be given to the registered owner of any Bonds designated for Optional Redemption in whole or in part, at such address as shall appear upon the registration books kept by the Paying Agent by mailing a copy of the Optional Redemption notice by first class mail not less than thirty (30) days prior to the Optional Redemption date. Any notice mailed shall be conclusively presumed to have been duly given, whether or not the Bondholder actually receives notice. The failure of the District to give notice to a Bondholder or any defect in such notice shall not affect the validity of the Optional Redemption of any Bond of any other owner.

Each notice of Optional Redemption shall specify the date fixed for Optional Redemption, the place or places of payment, that payment will be made upon presentation and surrender of the Bonds to be redeemed, that interest, if any, accrued to the date fixed for Optional Redemption will be paid as specified in said notice, and that on and after said date interest thereon will cease to accrue. If less than all the Bonds outstanding are to be redeemed, the notice of Optional Redemption shall specify the numbers of the Bonds or portions thereof (in denominations of $5,000 or any integral multiple thereof) to be redeemed.

The District shall notify the Securities Depository (see “THE BONDS - BOOK-ENTRY-ONLY SYSTEM” herein) in the same manner as the Bondholders, with a request that the Securities Depository notify its Participants who in turn notify the beneficial owners of such Bonds. Any failure on the part of the Securities Depository, or failure on the part of a nominee of a Beneficial Owner (having received notice from the District, a Participant or otherwise) to notify the Beneficial Owner so affected, shall not affect the validity of the Optional Redemption of such Bond.

Bonds Due and Payable on Redemption Date; Interest Ceases to Accrue

On any redemption date, the principal amount of each Bond to be redeemed, together with the premium, if any, and accrued interest thereon to such date, shall become due and payable. Funds shall be deposited with the Paying Agent to pay, and the Paying Agent is authorized and directed to apply such funds to the payment of, the Bonds called for redemption, together with accrued interest thereon to the redemption date and redemption premium, if any. After such redemption date, notice having been given in the manner described above, then, notwithstanding that any Bonds called for redemption shall not have been surrendered, no further interest shall accrue on any of such Bonds. From and after such date of redemption (such notice having been given), the Bonds to be redeemed shall not be deemed to be outstanding.

Cancellation

All Bonds that have been redeemed shall be canceled by the Paying Agent and either destroyed by the Paying Agent with counterparts of a certificate of destruction evidencing such destruction furnished by the Paying Agent to the District or returned to the District at its request.

Partial Redemption of Bonds

Bonds or portions of Bonds to be redeemed in part shall be selected when held by a Securities Depository by lot and when not held by a Securities Depository by the District by lot or in such other manner, as the District in its discretion may deem appropriate.

RECORD DATE; PAYMENT

The principal of the Bonds is payable upon surrender thereof at the principal corporate trust office of the Paying Agent. Payment of the interest on the Bonds will be made to the person appearing on the registration books of the Paying Agent as the registered owner thereof at the close of business on the fifteenth day of the month preceding each interest payment date for the Bonds, and if such day is not a regular business day of the Paying Agent the next day preceding which is a regular business day of the Paying Agent, by check, wire or draft mailed to each registered owner at such person’s address as it appears on the registration books, or at another address as is furnished to the Paying Agent in writing by the owner. Interest that is not timely paid or provided for shall cease to be payable to the registered owner as of the regular record date and shall be payable to the registered owner at the close of business on a special record date to be fixed by the Paying Agent.

AUTHORIZATION AND PURPOSE

Title 20-A, Chapter 609 of the Maine Revised Statutes, as amended, requires District voter referendum approval for school construction bond issues. By referendum election on November 5, 2013 the District’s voters approved notes and bonds, in an amount not to exceed $26,850,000, to provide funds to finance the Project (as defined below). The Bonds are further authorized to be issued pursuant to Chapter 45 of the Private and Special Laws of Maine (1979), as amended by Chapter 93 of the Private and Special Laws of Maine (1985) and by Chapter 83 of the Private and Special Laws of Maine (1999), Sections 1651(2)(E) and 1702 of Title 20-A of the Maine Revised Statutes, as amended; and a resolution of the District School Committee (the “District School Committee”) adopted November 6, 2013 for the purpose of constructing and equipping renovations and additions to the Wells High School, located in the District (the “Project”).

The Project includes construction of a new 81,000 square foot classroom building and 39,000 square foot renovation of the current gym, auditorium and cafeteria section of Wells High School. The classroom building will be built on current land on the High School campus; the Ronco Gym, Olenn Auditorium, cafeteria area and library area will be preserved, but totally renovated.

The State Board of Education has established Rules for Major Capital School Construction Projects, 05-071 C.M.R. Chapter 61 (2013), (the “Rules”) to provide a subsidy for all or a portion of the debt service costs for certain eligible new school construction projects and school addition (including addition plus renovation) projects (i.e., “qualified” for State subsidy). A project that is qualified for State subsidy has its approved debt service costs (which may be all or a portion of the debt service) included in its State local allocation for subsidy purposes. The District does not plan to submit this school construction project to the State for a rating to determine eligibility to be qualified for State subsidy. Accordingly, it is expected that the debt service on the Project will not be eligible for such subsidy inclusion; and debt service on the Project will not be includible in the District’s total allocation for purposes of calculating the State subsidy to the District (the “State Share”).

A portion of the proceeds of the Bonds will be used to refund, on a current basis, the District’s $1,500,000 2013 General Obligation Bond Anticipation Notes dated December 26, 2013 and maturing on October 30, 2014 (the “BANs”). The BANs were used to provide interim funds to finance the Project.

In the event that any proceeds of the Bonds remain unspent upon completion of the Project or the District abandons any or portions of the Project, the District reserves the right to reallocate unspent proceeds to the costs of other eligible projects approved, or to be approved, or to apply unspent proceeds to the payment of debt service on the Bonds.

An architectural view of Wells High School following the Wells High School renovation project. Image courtesy of Lavllee Brensinger Architects.

Wells High School Renovation Project

SOURCE OF PAYMENT AND REMEDIES

Local Assessments

The Bonds are general obligations of the District and their payment is not limited to a particular fund or revenue source. The District comprises the towns of Ogunquit and Wells (the “Member Towns”). The School Committee, in accordance with the budget approved by the voters of the District determines each Member Town’s share of the budget, including the District’s annual debt service obligation, needed to be raised from property taxes, and issues warrants to the assessors of the Member Towns requiring them to assess upon the taxable estates of each Member Town an amount that is that Member Town’s share of the District’s costs. The assessors of each Member Town are required to commit the assessment of the District to the Towns’ tax collectors, who have all the authority to collect the District’s taxes as to collect State of Maine (the “State”), county and municipal taxes. Ad valorem property taxes may be levied without limit as to rate or amount upon all the taxable property within the territorial limits of the District to pay principal and interest on the Bonds, except to any extent that any municipality within the territory of the District may enter into an agreement under Title 30-A, Chapter 223, Subchapter V of the Maine Revised Statutes, as amended, to share its assessed valuation with another municipality, and except to the extent that any municipality within the territory of the District establishes or has established municipal development districts either as tax increment financing districts or affordable housing development districts pursuant to Title 30-A, Chapters 206 and former 207 (now repealed) of the Maine Revised Statutes, as amended, the captured tax increment of which may not be available for payment of debt service on the Bonds. The Treasurer of each municipality within the territory of the District has certified that agreements under Chapter 223, Subchapter V, of the Maine Revised Statutes, as amended, or Title 30-A, Chapters 206 and former 207 (now repealed) of the Maine Revised Statutes, as amended, do not now exist. The municipalities within the territory of the District may establish development districts and elect to retain the tax increment on the captured assessed value of property in each district to pay a portion of costs (including debt service, if any debt is issued by the city or town) to finance certain eligible projects within the districts. There is no statutory provision for a lien on any portion of the tax levy to secure bonds or notes, or judgments thereon, in priority to other claims. The District is, however, subject to suit on the Bonds.

Pursuant to Title 20-A, Section 1702(5) of the Maine Revised Statutes, as amended, the District is a quasi- municipal corporation within the meaning of Title 30-A, Section 5701 of the Maine Revised Statutes, as amended, whereby the personal property of the residents and the real estate within the boundaries of a quasi- municipal corporation may be taken to pay any debt due from the body corporate. However, it is noted that there has been no judicial determination of whether this remedy is constitutional under current due process and equal protection standards. Further, Title 20-A, Section 1703(6) of the Maine Revised Statutes, as amended, provides that if a treasurer of one of the District’s constituent municipalities fails to pay an assessment when due, the District treasurer, following notice and a 60 day cure period from the due date, may initiate an action in Superior Court to compel payment of the delinquent installment. The court shall determine the amount owed by the municipality to the District and shall order the municipal treasurer to pay all delinquent installments and accrued interest (along with court costs and reasonable attorney's fees). To ensure prompt payment of the delinquent installments, the court may require that amounts due to the municipality from the State under Title 30-A, Section 5681 of the Maine Revised Statutes, as amended, and Title 36, Sections 578 and 685 of the Maine Revised Statutes, as amended, be paid to the District until the amount determined by the court is satisfied. The court shall promptly notify the disbursing State agency of the determination and direct the agency to make the required change in payee and the amounts to be paid. If additional funds are needed to satisfy the amount determined by the court to be paid to the District, the court may order the attachment or trustee process and sale of real or personal property owned by the municipality or the attachment of the municipality's bank accounts or require property tax payments to the municipality to be turned over to the court and may pay the amount owed the District from the proceeds and return any excess to the municipality.

The District’s assessments of its Member Municipalities do not include amounts for expenses, including debt service, to the extent the expenses are expected to be paid from budgeted revenues other than revenues from the assessment of taxes. Amounts necessary to repay sums borrowed temporarily in anticipation of bonds or grants are similarly excluded because they would normally be expected to be paid from the anticipated bond proceeds or grants. Enforcement of a claim for payment of principal of or interest on bonds or notes would be subject to the applicable provisions of federal bankruptcy laws and to the provisions of statutes, if any, hereafter enacted by the United States Congress or the State Legislature extending the time for payment or imposing other constraints upon enforcement insofar as the same may be constitutionally applied. The Bonds are not guaranteed by the State.

State Subsidy

The State subsidizes local school administrative units pursuant to Chapter 606-B of Title 20-A of the Maine Revised Statutes, as amended. Chapter 606-B is known as the “Essential Programs and Services Funding Act” (the “Act”). Pursuant to Section 15671 of the Act, Essential Programs and Services (“EPS”) are identified as those educational resources required for all students to meet the standards in the eight-content standard subject areas of the system of learning results established by statute. In order to achieve this system of learning results, school funding based on EPS must be available in all schools on an equitable basis and utilize resources including federal funds that are currently provided or could be adapted to implement a system of learning results, as well as additional resources that are also needed to ensure that these programs and services are available to all students. The objective of school funding is to make adequate provision for staffing and other material resource needs of the essential programs and services identified by the Legislature. Funding is subject to appropriation by the State legislature. The Act and State funding under the Act are subject to amendment by the Legislature.

The State and each local school administrative unit (“SAU”) are jointly responsible for contributing to the cost of the components of EPS. The State contribution to the cost of the components of EPS is proposed by the Commissioner of Education and established by the Legislature. The stated objective is for the State to provide 55% of the statewide EPS costs. However, the State has had difficulty achieving the statutory objective. The State has made a number of changes to the formula, as well as to its recognition of costs under the formula recognized for funding purposes over the years in lieu of additional funding. Even with these amendments, the State has not achieved the 55% statutory funding level objective, and in some years has curtailed its committed funding during the fiscal year. See “THE BONDS – SOURCE OF PAYMENT AND REMEDIES - Uncertainty Regarding School Funding,” below.

Based upon the State’s funding level for a fiscal year, the Act establishes that the Commissioner of Education set a statewide, full-value education mill rate that determines a municipality’s required local contribution. The full-value mill rate is that rate which, if applied to the statewide valuation, would produce a sufficient amount to achieve the statewide total local share of the total State/local allocation. The statewide mill rate applied to a municipality’s property valuation determines the municipality’s required local contribution, also referred to as the “local cost share” expectation for that municipality. The required local contribution is subject to certain adjustments, including, where applicable, a minimum receiver adjustment. In some cases, an SAU’s formula for dividing costs among its member municipalities creates a “re-allocation” of the member municipalities’ contributions towards the SAU’s local allocation.

By each February 1st, the Commissioner of Education notifies each SAU of its local cost share expectation; and each superintendent reports to the municipal officers whenever a SAU is notified of the local cost share expectation or a change made in the local cost share expectation resulting from an adjustment.

The legislative body of a SAU may approve an additional local appropriation that exceeds the SAU’s local allocation for EPS costs only if that action is approved in a separate article by a vote of the SAU’s legislative

body as part of the school budget approval process in that SAU and in accordance the Act. For SAUs whose budget meeting is a meeting of a town or city council, such additional local appropriation requires approval by a majority vote of the full membership of the school board, and approval by a majority of the full membership of the town or city council. For SAUs whose budget meeting is a New England-style open meeting of voters, such additional local appropriation is accomplished by a written ballot, simple majority vote. In almost all cases, following the budget meeting the voters must ratify the school budget by a referendum vote.

Uncertainty Regarding School Funding

State subsidies for SAUs are based upon a number of factors that are subject to change each year. In addition the formula itself is subject to change each year by the Legislature. Furthermore, subsidies for SAUs are an annual item in the State’s budgetary process and are subject to legislative appropriation each year.

The level of State subsidy is subject in any year to approval by the State legislature. Since the State’s establishment of school subsidy programs, in 1969, in some years the State has curtailed its subsidy of EPS costs(1). Also, over the last several fiscal cycles the State has delayed its transitional goals to reach its 55% State share target, and has recently redefined that target to include certain teacher retirement costs as “counting” for determining if the 55% State share target is achieved. The State has also adjusted the costs includible as EPS costs for funding purposes. No assurances can be given that future legislation will not have an adverse impact on school funding in Maine. In addition, no assurances can be given regarding the current, or future, annual appropriation by the Legislature of an amount sufficient to fund the State’s share of EPS allocation as it is currently defined and determined under the Act. Because of the uncertainties involved in the legislative process, it is not possible to predict the level of State subsidy to local units in future years or indeed, whether the State’s subsidy program will continue in its present form.

NOTE: (1) It is noted that in those years where the State has curtailed its subsidy of EPS costs, it has always excluded from curtailment the debt service for school construction projects that the State has approved for inclusion in EPS costs for subsidy services. No assurance can be given, however, that the State will not change this practice in some manner that would affect the level of such debt service subsidy. Unless expressly provided herein, the debt service on the Bonds is not included in EPS costs as State approved debt service for subsidy purposes.

Recent Years’ State General Purpose Aid to Local Schools

For fiscal year 2010/2011 the State target was re-established at 45.84%, fiscal year 2011/2012 at 46.02% (49.47%, including teacher retirement contribution), fiscal year 2012/2013 at 45.87% (49.350%, including teacher retirement contribution); fiscal year 2013/2014 at 47.29%; and fiscal year 2014/2015 and succeeding years thereafter, to be 55.00%. Beginning in fiscal year 2011/2012, the State set targets that include EPS costs plus the State contribution to teacher retirement, retired teacher health insurance and retired teacher life insurance.

In fiscal year 2013/2014 the State target for the total cost of K-12 education as measured by the EPS school funding model, included the total “normal cost” of the teachers’ retirement premium. The appropriation represents approximately $29 million over the distribution of school subsidy for the current fiscal year before that was reduced by $12.6 million through a curtailment order issued by the Governor in December 2012, as an emergency procedure to keep the State Budget in balance. The $29 million funding increase, however, is accompanied by transferring the financial obligation from the State to the schools for the “normal costs” of teachers’ retirement under MainePERS (as defined herein). As seen in the percentages set forth in this section, transferring the State funding of these costs to the EPS formula brings the State closer to its stated 55% funding goal for EPS costs, although it does not otherwise represent a net funding increase.

Neither the future amount nor rate of State subsidy can be calculated on a pro forma basis due to the variable nature of the factors included in the State’s calculation.

State Subsidy for the Bonds

The State Board of Education has established Rules for Major Capital School Construction Projects (the “Rules”) to provide a subsidy for all or a portion of the debt service costs for certain eligible new school construction projects and school addition (including addition plus renovation) projects (i.e., “qualified” for State subsidy). A SAU whose project has qualified for State subsidy has its approved debt service costs for that project (which may be the debt service on all or a portion of the project costs) included in its State local allocation for subsidy purposes. The District does not plan to submit this school construction project to the State for a rating to determine eligibility to be qualified for State subsidy. Accordingly, it is expected that the debt service on the Project will not be eligible for such subsidy inclusion; and debt service on the Project will not be includible in the District’s total allocation for purposes of calculating the State subsidy to the District (the “State Share”).

TAX MATTERS

The Bonds

In the opinion of Drummond Woodsum & MacMahon, Bond Counsel, under existing statutes, regulations, and court decisions, and assuming compliance with certain covenants, interest on the Bonds is excludable from gross income for federal income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), 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 the computation of certain taxes that may be imposed with respect to corporations, including, without limitation, adjusted current earnings of a corporation for purposes of computation of the alternative minimum tax and the foreign branch profits tax.

Bond Counsel’s opinion will state that the Internal Revenue Code of 1986, as amended (the “Code”), establishes certain requirements regarding use, expenditure and investment of the proceeds of the Bonds and timely payment of certain investment earnings to the U.S. Treasury that must be met subsequent to the issuance and delivery of the Bonds in order that interest on the Bonds be and remain excludable from gross income for federal income tax purposes pursuant to Section 103 of the Code. Noncompliance with such requirements may cause interest on the Bonds to be included in the gross income of the owner thereof retroactive to the date of issuance of the Bonds, regardless of when such noncompliance occurs.

The opinion will further state that Bond Counsel has examined and relied upon the Arbitrage and Use of Proceeds Certificate and the General Certificate of the Treasurer of the District (collectively, the “Tax Certificates”) delivered concurrently with the Bonds, which will contain representations, certifications, warranties, provisions, and procedures regarding compliance with the requirements of the Code. The District, in executing the Tax Certificates will certify to the effect that the information therein is true and accurate and that the District will comply with the provisions and procedures set forth therein and do and perform all acts and things necessary or desirable in order to ensure that interest paid on the Bonds shall be excludable from the gross income of the owners thereof for federal income tax purposes. In rendering its opinion Bond Counsel will rely upon the representations of the District set forth in the Tax Certificates and assume that the District will comply with the representations, certifications, warranties, provisions, and procedures set forth in the Tax Certificates.

Ownership of tax-exempt obligations may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies,

certain foreign corporations doing business in the United States, certain S corporations with excess passive income, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations. Prospective purchasers of the Bonds should consult their tax advisors as to applicability of any such collateral consequences.

Exemption of Interest on the Bonds from Taxation by the State of Maine

In the opinion of Bond Counsel, interest payable on the Bonds is not subject to income taxes imposed upon individuals by the State under existing statutes, regulations, and court decisions. See “PROPOSED FORM OF LEGAL OPINION” in APPENDIX D herein.

Not Qualified Tax-Exempt Obligations

The District will not designate the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code.

Original Issue Discount/Premium

Certain maturities of the Bonds (the “Discount Bonds”) may be sold at an initial offering price less than the principal amount payable on the Discount Bonds at maturity. The difference between the initial public offering price at which a substantial amount of each of the Discount Bonds is sold and the principal amount payable at maturity of each of the Discount Bonds constitutes original issue discount. The appropriate portion of the original issue discount allocable to the original and each subsequent owner of the Discount Bonds will be treated for federal income tax purposes as interest not includable in gross income pursuant to section 103 of the Code to the same extent as stated interest on the Discount Bonds. Pursuant to section 1288 of the Code, original issue discount on the Discount Bonds accrues on the basis of economic accrual. The basis of an initial purchaser of a Discount Bond acquired at the initial public offering price of the Discount Bond will be increased by the amount of such accrued discount. Prospective purchasers of the Discount Bonds should consult their tax advisors with respect to the determination for federal income tax purposes of the original issue discount properly accruable with respect to the Discount Bonds and the tax accounting treatment of accrued interest.

Original Issue Premium

Certain maturities of the Bonds (the “Premium Bonds”) may be sold at an initial offering price in excess of the amount payable at the maturity date. The excess, if any, of the tax basis of the Premium Bonds to a purchaser (other than a purchaser who holds such Premium Bonds as inventory, stock in trade or for sale to customers in the ordinary course of business) over the amount payable at maturity is amortizable bond premium, which is not deductible from gross income for federal income tax purposes. Amortizable bond premium, as it amortizes, will reduce the owner’s tax cost of the Premium Bonds used to determine, for federal income tax purposes, the amount of gain or loss upon the sale, redemption at maturity or other disposition of the Premium Bonds. Accordingly, an owner of a Premium Bond may have taxable gain from the disposition of the Premium Bond, even though the Premium Bond is sold, or disposed of, for a price equal to the owner’s original cost of acquiring the Premium Bond. Bond premium amortizes over the term of the Premium Bonds under the “constant yield method” described in regulations interpreting section 1272 of the Code. Prospective purchasers of the Premium Bonds should consult their tax advisors with respect to the calculation of the amount of bond premium which will be treated for federal income tax purposes as having amortized for any taxable year (or portion thereof) of the owner and with respect to other federal, state and local tax consequences of owning and disposing of the Premium Bonds.

Additional Federal Income Tax Consequences

In the case of certain corporate Holders of the Bonds, interest on the Bonds will be included in the calculation of the alternative minimum tax as a result of the inclusion of interest on the Bonds in “adjusted current earnings” of certain corporations.

Prospective purchasers of the Bonds should be aware that ownership of, accrual or receipt of interest on or disposition of tax-exempt obligations, such as the Bonds, may have additional federal income tax consequences for certain taxpayers, including, without limitation, taxpayers eligible for the earned income credit, recipients of certain Social Security and certain Railroad Retirement benefits, taxpayers that may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, financial institutions, property and casualty insurance companies, foreign corporations and certain S corporations. Prospective purchasers of the Bonds should consult their tax advisors with respect to the need to furnish certain taxpayer information in order to avoid backup withholding.

The Internal Revenue Service (the “IRS”) has an ongoing program of auditing state and local government obligations, which may include randomly selecting bond issues for audit, to determine whether interest paid to the Holders is properly excludable from gross income for federal income tax purposes. It cannot be predicted whether the Bonds will be audited. If an audit is commenced, under current IRS procedures Holders of the Bonds may not be permitted to participate in the audit process and the value and liquidity of the Bonds may be adversely affected.

Changes in Federal Tax Law

Federal, state or local legislation, administrative pronouncements or court decisions may affect the tax-exempt status of interest on the Bonds, gain from the sale or other disposition of the Bonds, the market value of the Bonds or the marketability of the Bonds. For example, the President of the United States has submitted proposals to Congress for legislation that would, among other things, limit the value of tax-exempt interest for higher-income taxpayers. No prediction can be made as to the ultimate outcome of these legislative proposals. If enacted into law, such proposals (or any other proposal involving a piecemeal or comprehensive review of the provisions of the Code, including provisions affecting the federal tax treatment of interest on tax-exempt bonds, that Congress might consider) could affect the exclusion from gross income of interest on, or the market price or marketability of, tax-exempt bonds (including the Bonds). Prospective purchasers of the Bonds should consult their tax and financial advisors regarding such matters.

Extent of Opinion

Bond Counsel expresses no opinion regarding any tax consequences of holding the Bonds other than its opinion with regard to (a) the exclusion of interest on the Bonds from gross income pursuant to section 103 of the Code, (b) interest on the Bonds not constituting an item of tax preference pursuant to section 57 of the Code and (c) the exemption of interest on the Bonds from taxation within the State of Maine. Prospective purchasers of the Bonds should consult their tax advisors with respect to all other tax consequences (including but not limited to those described above) of holding the Bonds.

BOOK-ENTRY-ONLY SYSTEM

The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued in fully-registered form 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 each maturity of the Bonds, each in the aggregate principal amount of such maturity, and each such certificate will be deposited with DTC.

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

Purchases of securities deposited with DTC must be made by or through Direct Participants, which will receive a credit for such securities on DTC’s records. The ownership interest of each actual purchaser of each security deposited with DTC (“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 securities deposited with DTC 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 securities deposited with DTC, except in the event that use of the book-entry system for such securities is discontinued.

To facilitate subsequent transfers, all securities 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 securities 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 securities deposited with it; DTC’s records reflect only the identity of the Direct Participants to whose accounts such securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Redemption notices shall be sent to DTC. If less than all of a maturity is 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 such other DTC nominee) will consent or vote with respect to securities deposited with it unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the issuer of such securities or its paying agent 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 securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal and interest payments on securities deposited with DTC 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 issuer of such securities or its paying agent, on the 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 (nor its nominee), the issuer of such securities or its paying agent, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the issuer of such securities or its 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 securities held by it at any time by giving reasonable notice to the issuer of such securities or its paying agent. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered to Beneficial Owners. The District may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, physical certificates will be printed and delivered to Beneficial Owners. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the District believes to be reliable, but the District takes no responsibility for the accuracy thereof.

CUSIP IDENTIFICATION NUMBERS

It is anticipated that CUSIP numbers will be printed on the Bonds. All expenses in relation to the printing of CUSIP numbers on the Bonds will be paid for by the District provided, however, that the District assumes no responsibility for any CUSIP Service Bureau charge or other charge that may be imposed for the assignment of such numbers.

RATINGS

The Bonds are rated “Aa3” by Moody’s Investors Service (“Moody’s”) and “AA+” by Standard & Poor’s, Public Finance Ratings (“S&P” and, collectively, with Moody’s, the “Rating Agencies” and, individually, each a “Rating Agency”). The District has furnished the Rating Agencies certain information and materials, some of which may not have been included in this Official Statement. Generally, a Rating Agency bases any rating established by it on such information and materials and also on such investigations, studies and assumptions as it may undertake or establish independently. Each rating reflects only the view of the Rating Agency which published it at the time such rating is assigned and will be subject to revision or withdrawal, which could affect the market price of the Bonds. A Rating Agency should be contacted directly for its rating on the Bonds and its explanation of such rating. A rating is not a recommendation to buy, sell or hold the Bonds, and such rating should be evaluated independently.

Except as set forth in the Continuing Disclosure Certificate set forth in APPENDIX E and referred to under “THE BONDS – CONTINUING DISCLOSURE’ herein, the District has not undertaken any responsibility either to bring to the attention of the owners of the Bonds any proposed change in, or withdrawal of, any rating of the Bonds or to oppose any such change or withdrawal.

CONTINUING DISCLOSURE

In order to assist the underwriter in complying with the Securities Exchange Commission’s Rule 15c2-12 (the “Rule”), the District will covenant for the benefit of the owners of the Bonds to provide certain financial information and operating data relating to the Rule by not later than 270 days after the end of each fiscal year (the “Annual Report”) and to provide notices of the occurrence of certain enumerated events, if material, which material events are more specifically described herein. The covenants will be contained in a “Continuing Disclosure Certificate” (the “Certificate”), the proposed form of which is provided in APPENDIX E. The Certificate will be executed by the Treasurer of the District, and incorporated by reference in the Bonds.

The District’s first issuance of debt subject to continuing disclosure requirements of the Rule was issued on August 15, 2013. In its undertaking under the Rule, at that time, the District’s obligation for annual financial disclosure was “not later than 270 days after the end of each fiscal year, commencing with the fiscal year ending June 30, 2014”. Nevertheless, the District posted its annual financial disclosure for the fiscal year ending June 30, 2013 on March 19, 2014, or 262 days following the end of that fiscal year. The District has never failed to comply in all material respects with any previous undertakings to provide financial information or notices of material events in accordance with the Rule.

Additionally, for each issue of debt the District Treasurer establishes and implements post-issuance compliance procedures that, among other items, will provide for timely filings with EMMA or its successor repository, if any, with respect to its existing and future continuing disclosure undertakings; and is currently reviewing its procedures that it believes will provide prompt compliance with the undertaking on a going forward basis. Furthermore, the District has registered with the EMMA reminder system to receive email reminders to help ensure timely filing of disclosure requirements.

FINANCIAL ADVISOR

Moors & Cabot, Inc. has acted as Financial Advisor to the District with respect to the issuance of the Bonds pursuant to Municipal Securities Rulemaking Board Rule G-23. Moors & Cabot, Inc. does not intend to submit its bid on, or participate in an underwriting syndicate for the public distribution of, the Bonds.

STATUTORY REFERENCES

All quotations from and summaries and explanations of laws herein do not purport to be complete, and reference is made to said laws for full and complete statements of their provisions.

CONDITIONS PRECEDENT TO DELIVERY

The following, among other things, are conditions precedent to the delivery of the Bonds to the original purchasers thereof.

Certification

The Bonds will be certified as to their genuineness by U.S. Bank, National Association, Boston, Massachusetts, which certificate will appear on the Bonds.

Approval of Legality

The legality of the Bonds will be approved by Drummond Woodsum & MacMahon of Portland, Maine, Bond Counsel. The legal opinion of Bond Counsel with respect to the Bonds will be delivered at the time of original delivery of the Bonds to the Underwriter. The opinion will be dated and given on and will speak only as of the date of original delivery of the Bonds to the Underwriter. The scope of engagement of Bond Counsel does not extend to passing upon or assuming responsibility for the accuracy or adequacy of any statements made in this Official Statement other than matters expressly set forth as their opinion and they make no representation that they have independently verified the same. See also “PROPOSED FORM OF LEGAL OPINION” in APPENDIX D herein.

Certificate With Respect to Debt Limits

At the time of the original delivery of and payment for the Bonds, the District will deliver a certificate of the Treasurer of the District which certifies that the District has not exceeded its debt limitations and that issuance of the Bonds will not cause the District to exceed the debt limit.

Certificate With Respect to Official Statement

At the time of the original delivery of and payment for the Bonds, the District will deliver a certificate of the Treasurer to the effect that she has examined this Official Statement and the financial and other data contained therein and that, to the best of her knowledge and belief, both as of its date and as of the date of delivery of the Bonds, the Official Statement does not contain any untrue statement of a material fact and does not omit to state any material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading, subject to the condition that while information in the Official Statement obtained from sources other than the District is not guaranteed as to accuracy, completeness or fairness, she has no reason to believe that such information is materially inaccurate or misleading.

Certificate With Respect to Treasurers of Constituent Towns

At the time of the original delivery of and payment for the Bonds, the District will deliver a certificate of the Treasurer of each of the municipalities within the territory of the District which certifies that no agreements now exist under Title 30-A, Chapter 223, Subchapter V of the Maine Revised Statutes, as amended, to share its assessed valuation with another municipality.

No Litigation

Upon delivery of the Bonds, the District shall deliver or cause to be delivered a certificate of the Treasurer, and attested to by its Secretary, dated the date of delivery of the Bonds, to the effect that there is no litigation pending or, to the knowledge of the Treasurer, threatened, affecting the validity of the Bonds or the power of the District to levy and collect taxes to pay them, and that neither the corporate existence nor boundaries of the District, nor the title of any of said officers to their respective offices, is being contested.

ORGANIZATION OF SCHOOL ADMINISTRATIVE UNITS IN MAINE

SCHOOL GOVERNANCE STRUCTURES IN MAINE

Maine's School Administrative Units (“SAUs”) use the following school governance structures:

Cities or Towns with Individual Supervision

An individual city or town may provide public education for all or some grades through an elected municipal school committee. If the municipality supervises only some grades, the municipality may also be a member of a district for purposes of supervision of its other grades. The municipal school committee administers education for the city or town through a superintendent of schools. Assuming the city or town has adopted a charter and is not a “town meeting town,” the city or town charter usually determines the method of budget approval in the first instance, except to the extent that the charter process may be superseded by State law. Generally, the school budget is proposed by the school committee, as the governing body, and is then submitted to the municipal council for legislative body approval, although the municipal charter in some cases requires submission to the voters. In town meeting towns, the proposed budget is submitted to voters at a town meeting. However, in each of these cases, the school budget approved by the legislative body must then be submitted to a statutory referendum validation vote, unless the municipality has adopted a referendum vote to discontinue the statutory referendum validation step.

Regional School Units

A regional school unit (“RSU”) is a combination of two or more member municipalities (although at least one RSU has only one member town, the other members having withdrawn) that pool their educational resources to educate students in grades kindergarten through 12. One school board administers the education of grades K-12 through a superintendent of schools. The budget proposed by the school board is submitted to a New England town meeting-style meeting of the RSU voters for approval. The approved budget is the submitted to a validation vote and a RSU referendum, unless the RSU has adopted a referendum vote to discontinue the statutory referendum validation step. The member municipalities share the RSU costs based on a formula that factors in State valuation and/or number of pupils and/or other factors as specified in the RSU’s approved cost sharing formula.

Regional School Units Doing Business as School Administrative Districts

A SAU doing business as a school administrative district (“RSU/SAD”) is a combination of two or more member municipalities (although a small number of RSU/SADs have only one member town) that pool their educational resources to educate all students (although at least one RSU/SAD has fewer than all grades). One school board administers the education through a superintendent of schools. Budget approval is in the same manner as for RSUs. See “ORGANIZATION OF SCHOOL ADMINISTRATIVE UNITS IN MAINE - SCHOOL GOVERNANCE STRUCTURES IN MAINE - Regional School Units” above. The member municipalities share the RSU/SAD costs based on a formula that factors in State valuation and/or number of pupils and/or other factors as specified in the RSU/SAD’s approved cost sharing formula.

Community School Districts

The District is a community school district (“CSD”). A CSD is a combination of two or more member municipalities (and in a few instances, member school administrative districts) that pools their educational resources. A CSD generally educates fewer than all grades, but in some instances, including in the District, a CSD may educate all grades from kindergarten through grade 12. In many instances, a CSD has a single elected governing body, the district school committee, which administers education through a superintendent of schools. In some instances, a separately elected board of trustees acts as the governing body for purposes

of issuing capital debt to build or renovate the schools operated by the district school committee. Budget approval is in the same manner as for RSUs. See “ORGANIZATION OF SCHOOL ADMINISTRATIVE UNITS IN MAINE - SCHOOL GOVERNANCE STRUCTURES IN MAINE - Regional School Units” above. The member municipalities share the CSD costs based on a formula that factors in State valuation and/or number of pupils and/or other factors as specified in the CSD’s approved cost sharing formula.

Alternative Organizational Structures

An alternative organizational structure (“AOS”) is a combination of two or more SAUs joined together pursuant to a reorganization plan approved by the respective voters for the purpose of providing administrative and, sometimes, educational services. Administrative services provided by the AOS may include system administration (a superintendent and the superintendent's office), special education administration, transportation administration and the business functions of accounting, reporting, payroll, financial management, purchases and audit.

Each member SAU of an AOS maintains its own budget, has its own school board, and is operated in every way as a separate unit, except for those services indicated in the AOS reorganization plan. AOS budget approval is by majority vote of those present and voting at AOS district budget meetings. The member SAUs share the AOS costs based on a formula specified in the AOS reorganization plan. In addition, the AOS school committee is comprised of representatives from each of the member entity school boards and conducts the business of the AOS. All votes of the AOS school committee are cast in accordance with voting procedures specified in the AOS reorganization plan.

School Unions

A School Union is a combination of two or more SAUs joined together for the purpose of sharing the costs of a superintendent and the superintendent's office. Each member SAU maintains its own budget, has its own school board, and operates in every way as a separate unit except for the sharing of superintendent services and costs. In addition, a union school committee, which comprises representatives from each member unit school committee, conducts the business of the union. All votes of the union committee are cast on a weighted basis in proportion to the population of the municipalities involved. The school union committee approves the school union budget, and the school union members share those costs in accordance with a school union agreement.

COMMUNITY SCHOOL DISTRICTS IN MAINE

Organization of a Community School District

A CSD is a body politic and corporate of the State of Maine and is a quasi-municipal corporation within the meaning of Title 30-A, Section 5701 of the Maine Revised Statutes, as amended, pursuant to Chapter 105, Section 1702(5) of Title 20-A of the Maine Revised Statutes, as amended. A CSD may be organized by a private and special law, or it may have been organized by a process under the general statutes, which has since been repealed.

Operation of a Community School District

A CSD may be governed by a board of trustees for purposes of certain representational matters and for purposes of borrowing, and by a district school committee for all other operational purposes. Alternatively, either through private and special legislation or through a process under the general statutes, a CSD may be governed solely by a district school committee, whose authority includes the statutory powers and duties of the board of trustees. The district school committee hires a superintendent and may authorize the superintendent to serve as its secretary and the treasurer.

Authority of a District School Committee

A district school committee shall have the powers and duties with respect to the CSD as are conferred upon school boards under Maine statute, except those powers and duties which are expressly reserved for the CSD board of trustees, as applicable. Specifically, pursuant to Section 1703 of Title 20-A of the Maine Revised Statutes, as amended, a district school committee is responsible, as of the start of the school year after organization, for the operation of the authorized grades; may issue bonds and notes and borrow money as authorized; may acquire and hold property for the purpose of operating schools within the authorized grade levels and for other purposes; to share costs in the manner authorized by the CSD’s voters; and may acquire, construct and operate related recreational and athletic facilities, which may also meet other community needs. The district school committee also has the powers and duties provided by a private and special law creating the CSD, if any.

Budget and Assessments

Notwithstanding any other law, pursuant to Title 20-A, Section 1701C of the Maine Revised Statutes, as amended, CSD budgets developed after January 1, 2008 must conform to the format and referendum procedures for RSUs and are deemed to be a RSU solely for the purpose of developing a budget as set forth in Title 20-A, Sections 1485 and 1486 of the Maine Revised Statutes, as amended.

Until a CSD votes to discontinue the statutory budget process (i.e., Title 20-A, Section 1486(1) “every 3 years, the voters in a regional school unit shall consider continued use of the budget validation referendum process”), a CSD’s summary budget must be approved at a New England town meeting-style budget meeting and by a budget validation referendum. The budget validation referendum must be held on or before the 30th calendar day following the scheduled date of the regional school unit budget meeting. If the voters do not validate the budget at the budget validation referendum vote, the district school committee shall hold another budget meeting at least 10 days and not more than 45 days after the referendum to vote on a new budget approved by the district school committee. The new budget approved at the budget meeting must again be submitted to the voters for validation at referendum. The process must be repeated until a budget is approved at a budget meeting and validated at referendum.

If a budget is not approved prior to July 1st, the latest budget approved at a budget meeting is automatically considered the budget for operational expenses for the ensuing year until a final budget is approved, except that, when the district school committee delays the budget meeting, the operating budget must be approved within 30 days of the date the Commissioner notifies the district school committee of the amount allocated to the CSD, or the latest budget submitted by the district school committee becomes the interim operating budget for the next school year until a budget is approved.

In accordance with the approved budget, the district school committee issues warrants to the Assessors of each member municipality for its share of the CSD’s costs. The Assessors commit the assessment to the respective Tax Collectors, who have the authority and powers to collect the CSD’s taxes as is vested in them by law to collect state, county and municipal taxes. The district school committee also notify the member municipalities of the monthly installments that will become payable during the CSD’s fiscal year, due on or before the 20th of each month. In accordance with Title 20-A, Section 1489(6) of the Maine Revised Statutes, as amended, if a treasurer of one of the CSD’s constituent municipalities fails to pay an assessment when due, the CSD treasurer, following notice and a 60-day cure period from the due date, may initiate an action in Superior Court to compel payment of the delinquent installment. The court shall determine the amount owed by the municipality to the CSD and order the municipal treasurer to pay all delinquent installments and accrued interest (along with court costs and reasonable attorney’s fees). To ensure prompt payment of the delinquent installments, the court may require that amounts due to the municipality from the State be paid to the CSD until the amount determined by the court is satisfied, promptly notifying the disbursing State agency of the determination and directing the agency to make the required change in payee

and the amounts to be paid; or if additional funds are needed the court may order the attachment or trustee process and sale of real or personal property owned by the municipality or the attachment of the municipality's bank accounts or require property tax payments to the municipality to be turned over to the court and may pay the amount owed the CSD from the proceeds and return any excess to the municipality.

Power to Borrow Money

Pursuant to Title 20-A, Section 1702 of the Maine Revised Statutes, as amended, a CSD board of trustees may borrow money to pay for current operating expenses, minor capital costs, and, subject to prior voter referendum approval under section 15904(3) of Title 20-A, school construction. The district school committee holds this borrowing authority when so provided by private and special law, if any, creating the CSD, or when the CSD voters have merged the authority of the board of trustees into the district school committee. The aggregate principal amount of outstanding debt issued or assumed by a CSD for major and minor capital costs (i.e., school construction purposes and renovation, improvement, and repair purposes), shall not exceed 10% of the total of the last preceding State valuation of all of the municipalities within the CSD.

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WELLS-OGUNQUIT COMMUNITY SCHOOL DISTRICT

GENERAL

Wells-Ogunquit CSD began operating on July 1, 1980, and is organized pursuant to Chapter 45 of the Private and Special Laws of Maine (1979) “An Act to separate Ogunquit Village Corporation from the Town of Wells,” as amended by Chapter 93 of the Private and Special Laws of Maine of 1985 and by Chapter 83 of the Private and Special Laws of Maine of 1999 (collectively, the “Enabling Act”). The District is governed by the Enabling Act and the provisions of general law, including Title 20- A, Chapter 105 of the Maine Revised Statutes, as amended.

The District’s territory includes towns of Ogunquit and Wells (collectively, the “Member Communities”). The District serves the public educational needs for grades Kindergarten (“K”) through 12 for all of the residents of the Member Communities.

The District’s administrative offices and its multi-school campus are located at 1460 Post Road (US Route 1) in Wells.

THE ALTERNATIVE PLAN

Prior to the School Consolidation Act enacted in 2007 (the “Act”), the District’s October 1, 2006 consolidated enrollment was 1,415 students, or less than the 2,500 resident students’ threshold to be exempt from consolidation by the Act. At the Commissioner of Education’s request the District pursued various consolidation possibilities, in June 2008, the District explored consolidation into the newly-formed RSU 21 (being the former MSAD No. 71, comprised of Kennebunk and Kennebunkport, and Arundel, under its individual supervision); in September 2008, in combination with Kittery as a RSU; in November 2008, with Acton as an AOS, all with no success. The District then submitted an Alternative Plan (the “Alternative Plan”) on April 2, 2009, accepted by the Commissioner.

While remaining with the same Member Communities only, the Alternative Plan provides various cost savings initiatives and collaborative arrangements, such as sharing some transportation with RSU 21, RSU 21 undertaking all of the District’s printing costs, to collaborate with RSU 21 for adult education, joining York County’s Best Bid Purchasing Portal, to collaborate with Sanford for the Great Works Project, an integrated career and technical center, and by establishing a dual enrollment program with York County Community College, located in Wells, to sustain the District’s Early College Program. Because the Commissioner accepted the Alternative Plan, the District was exempt from being required to consolidate with another SAU into a larger unit of school administration.

THE MEMBER COMMUNITIES

The towns of Wells and Ogunquit are located on the coast of the State of Maine in the southeastern section of the County of York, the State’s southernmost county. Wells is approximately 32.7 miles and Ogunquit approximately 38.3 miles, respectively, southwest of Portland, Maine the State’s largest city. Wells is separated from the Town of Kennebunk by Branch Brook as the northeast border; the City of Sanford and

Town of North Berwick form the western sides, with the towns of South Berwick and York comprising its southern border. The Gulf of Maine, in the Atlantic Ocean, is the eastern boundary for both Wells and Ogunquit, with the Ogunquit River as the towns’ southern/northern boundary, respectively; Ogunquit being contiguous to York as its southwestern line. Access to the towns is provided by Exit 7 (formerly Exit 1) of the Maine Turnpike (U.S. Interstate Route 95) at York or Exit 19 (formerly Exit 2) of the Maine Turnpike (U.S. Interstate Route 95) in Wells, U.S. Route 1 and State Routes 9, 9A, 9B and 109, all of which intersect the Wells from various directions; US Route 1being the primary corridor for Ogunquit along its eastern, coastal area.

The towns of Kennebunk and Ogunquit, were included as part of the present Town of Wells, named from Wells in Somersetshire, England (named after the English cathedral city in Somersetshire, the county being the home of the explorer Sir Ferdinando Georges from whom the land was conveyed) on August 10, 1622 by the Plymouth Company in England. Thomas Gorges, his young cousin, granted the lands from northeast of the Ogunquit River to the southwest of the Kennebunk River to agents from Exeter, New Hampshire on September 27, 1641 for the purpose of settling the plantation of Wells and the area was first settled in 1642 or 1643. After the death of Sir Ferdinando Gorges and with political upheaval in England, the Massachusetts Bay Colony took advantage of the situation and laid claim to all of Maine. In July of 1653 Wells submitted to the control of the Massachusetts Bay Colony and the Town was incorporated on August 30, 1653 as the third town in the District of Maine.

On June 24, 1820, Kennebunk set off and incorporated as its own town. A long-time village in a section of Wells, on March 31, 1913 an act of the State Legislature created the Ogunquit Village Corporation(1). On June 22, 1979, Chapter 45 of the Private and Special Laws of Maine (1979) “An Act to separate Ogunquit Village Corporation from the Town of Wells” was approved by the Governor, and Ogunquit became incorporated as a separate town, effective July 1, 1980.

The barrier beaches of Wells were discovered by wealthy inland businessmen by the late 1840s. Although tourism did not flourish until the 20th century, this was the beginning of the awareness of its cool summer climate and many natural resources. Wells and Ogunquit are now renowned as tourist communities with attractions that include miles of waterfront distinguished by beautiful beaches covered with fine, clean sand, picturesque rocky coastlines and snug harbors and a wide range of shopping opportunities. Accommodations include campgrounds, bed and breakfasts, inns, cottages, motels and restaurants. The settlements of the towns include Wells, Wells Beach, Wells Corner, Drake’s Island and Moody Beach in Wells; Perkins Cove, Ogunquit Beach and the Marginal Way’s walkway along an ocean-side rocky cliff.

The towns are located at the base of a geographic triangle which points are comprised of the Portland metropolitan/Saco-Biddeford area to the north, Portsmouth-Kittery (to Boston) at its south, and the Sanford area to its west. This has lead to residential development in the communities due to their accessibility to these labor markets. The suburban coastal communities have primarily single family, owner occupied dwellings,

NOTE: (1) Pursuant to Title 30-A, Chapter 241, of the Maine Revised Statutes, as amended, a “Village Corporation” in Maine is established to provide a separate corporate and municipal entity but remaining within a town, for purposes of rendering specific services thus allowing a certain amount of self-determination to the specific the portion of the town of which it is comprised. During its existence, the Ogunquit Village Corporation functioned essentially as a town of its own, supporting its own police, fire, highway and sewer departments.

the land area including large tracts of farm and forest lands, open space and coastal areas, as well as residential developments and is comprised of residential, beach business, general business, resource protection and aquifer protection, quarry manufacturing, light industrial and harbor district zones. The towns’ area is comprised of approximately 94.06 square miles, including approximately 27.13 square miles of water approximately 66.93 square miles of land.

GOVERNMENT

The Enabling Act provides that “The duties of the trustees of the community school district and the school committee … shall be carried out by a school committee”. Pursuant The Enabling Act and Section 1651 of Title 20-A of the Maine Revised Statutes, as amended, the District’s governance body is its District School Committee, comprised of six members, three being residents from each municipality, who serve for three-year staggered terms as the “District School Committee Members”. However, under the 1985 amendment to the Enabling Act, the Legislature waived the statutory percentage of voting power restriction under “Method B: weighted votes,” under the general laws. Consequently, respective District School Committee Members’ votes are weighted, as follows:

Municipality Population Board Members Votes per Member Votes Wells 9,589 3 276 828 Ogunquit 892 3 57 171 10,481 6 314 999

NOTE: Title 20-A, Section 1472(2)(C) of the Maine Revised Statutes, as amended, provides “Under the method of representation referred to as “Method B:, directors cast weighted votes. … C. A plan may not permit the voting power of any director to exceed by more than 5% the percentage of voting power the director would have if all 1,000 votes were apportioned equally among the directors.” However, Section 1752 of Title 20-A of the Maine Revised Statutes, as amended, clarifies that conflicting provisions of the general statutes and of private and special laws creating CSDs are controlled by the private and special law provision.

LABOR RELATIONS

The District has 254 full-time and various part-time employees. District employees (other than managerial and confidential employees) are entitled to join unions and to bargain collectively on questions of wages, hours and other terms and conditions of employment.

Teachers are represented by the Wells-Ogunquit Teachers Association (“WOTA”) and School Secretaries, Educational Technicians, and Custodians are represented by the Wells-Ogunquit Support Staff Association (“WOSSA”), each through their affiliation with the Maine Education Association (“MEA”), as separate bargaining units. The 11 other District employees are not represented by a union.

Date of Contract Union Members Bargaining Unit Effective Expiration WOTA 111 Teachers Sept. 1, 2013 Aug. 31, 2016 Secretaries, Ed. Tech. and WOSSA 49 Custodians Sept. 1, 2013 Aug. 31, 2016

THE SCHOOLS

School Grade Estimated Capacity Enrollment (1) Wells Elementary School K – 4 600 455 Wells Junior High School 5 – 8 750 426 Wells High School 9 – 12 700 448

NOTE: (1) October 1, 2013 Public Resident Enrollment, State of Maine, Department of Education.

ENROLLMENTS

The following tables show the student population of each community within the District’s territory and its respective percentage of the District’s total student population over the last 10 years, based upon the State of Maine Department of Education’s October 1st Annual Census; and then school enrollments over the last ten years, consolidated for the District and then by community within the District:

Wells-Ogunquit CSD Resident Student Population

Total Ogunquit Wells Resident Oct. 1, Students % Students District Students 2013 55 4.15% 1,271 95.85% 1,326 2012 57 4.30% 1,265 95.70% 1,322 2011 58 4.30% 1,300 95.70% 1,358 2010 55 3.90% 1,340 96.10% 1,395 2009 54 3.90% 1,339 96.10% 1,393 2008 48 3.30% 1,393 96.70% 1,441 2007 65 4.50% 1,395 95.50% 1,460 2006 51 3.60% 1,359 96.40% 1,410 2005 49 3.30% 1,435 96.70% 1,484 2004 54 3.60% 1,442 96.40% 1,496

Wells-Ogunquit CSD Consolidated Enrollments, School Enrollment Trend

Grades Total Oct. 1, K-4 5-8 9-12 Other Enrollment 2013 460 419 447 3 1,329 2012 446 451 425 3 1,325 2011 477 449 432 1 1,359 2010 501 458 436 2 1,397 2009 495 440 458 1 1,394 2008 520 438 483 3 1,444 2007 528 453 479 5 1,465 2006 493 448 469 7 1,417 2005 517 474 493 0 1,484 2004 521 493 482 0 1,496

SOURCE: State of Maine, Department of Education, “October 1 Census of Students Educated at Public Expense”. NOTE: “Other” includes: Tuition or Post-Graduate Students.

Town of Ogunquit, School Enrollment Trend

Grades Total Oct. 1, K-4 5-8 9-12 Other Enrollment 2013 21 17 17 0 55 2012 20 21 16 0 57 2011 27 14 17 0 58 2010 26 16 13 0 55 2009 23 13 18 0 54 2008 19 13 16 0 48 2007 25 22 18 0 65 2006 17 17 17 0 51 2005 15 19 15 0 49 2004 14 21 19 0 54

Town of Wells, School Enrollment Trend

Grades Total Oct. 1, K-4 5-8 9-12 Other Enrollment 2013 439 402 430 0 1,271 2012 426 430 409 0 1,265 2011 450 435 415 0 1,300 2010 475 442 423 0 1,340 2009 472 427 440 0 1,339 2008 501 425 467 0 1,393 2007 503 431 461 0 1,395 2006 476 431 452 0 1,359 2005 502 455 478 0 1,435 2004 507 472 463 0 1,442

Technical Education

Title 20-A, Chapter 313 of the Maine Revised Statutes, as amended, provides for “applied technology education” or a course or program of education which is designed to create or improve job-related skills that are part of a secondary school curriculum. The programs may be offered via an applied technology center (a “Center”). A Center is generally governed and operated by a SAU and its obligations are those of the unit or may have participating members who share access to, and pay costs of, the Center based upon a cooperative agreement (a “Cooperative Agreement”).

The City of Sanford owns and operates the Sanford Regional Technical Center (“SRTC”). Pursuant to a Cooperative Agreement, SRTC is attended by secondary students residing in the City of Sanford, as well as in the former M.S.A.D. No. 35 (Eliot and South Berwick) now RSU 35, former M.S.A.D. No. 57 (Alfred, Limerick, Lyman, Newfield, Shapleigh and Waterboro) now RSU 57, former M.S.A.D. No. 60 (Berwick, Lebanon and North Berwick) now RSU 60, former M.S.A.D. No. 71 (Kennebunk and Kennebunkport) now, with the addition of Arundel, RSU 21, the District and the towns of Kittery and York (collectively the “Member Units”). While the SRTC is owned, operated and maintained by the of the City of Sanford the Cooperative Agreement provides for an Advisory Board, made up of representatives from the Member Units, to plan, develop, coordinate and recommend educational services for vocational students enrolled by the Member Units. The school first opened for secondary students for grades 10 to 12 in 1970. The District currently sends 17 students to SRTC.

ECONOMIC CHARACTERISTICS

Member Community ------% Change------Town of Town of Population Ogunquit Wells District State USA 1970 NA 4,448 NA 2.4% 13.4% 1980 1,492 8,211 NA 13.4 11.4 1990 974 7,778 (9.8%) 9.2 9.8 2000 1,226 9,400 21.4 9.2 9.8 2010 892 9,589 (1.4) 4.2 8.9

Town of Town of York State of Population Characteristics Ogunquit Wells County Maine USA Median age (years) 61.7 48.5 43.0 42.7 37.2 % school age 5.5% 17.3% 16.1% 18.2% 20.4% % working age 50.0% 58.1% 59.8% 63.4% 62.9% % 65 and over 41.4% 21.0% 15.4% 15.9% 13.0% Persons/household 1.79 2.30 2.40 2.32 2.58

Town of Town of York State of Income Ogunquit Wells County Maine USA Median family income $73,462 $68,768 $65,077 $58,185 $62,982 % below poverty level 6.8% 5.3% 8.5% 12.6% 13.8% Per capita income $42,935 $29,401 $27,137 $25,385 $27,334

Town of Town of York State of Housing Ogunquit Wells County Maine USA % owner occupied 71.4% 86.6% 75.2% 73.1% 66.6% % Built before 1939 25.0% 16.1% 23.7% 28.1% 14.1% % Built since 2000 5.6% 12.7% 11.5% 8.9% 12.8% Owner occupied med. value $551,900 $276,500 $233,300 $176,200 $188,400 Median gross rent $1,205 $798 $814 $707 $841 Occupied housing units 549 4,019 80,299 551,125 -

SOURCE2010 Census, U.S. Department of Commerce, Bureau of the Census.

Town of Town of York State of Unemployment Ogunquit Wells County Maine USA 2013 7.9% 6.4% 6.2% 6.7% 7.4% 2012 7.9 6.4 6.6 7.3 8.1 2011 8.3 6.7 6.8 7.5 8.9 2010 8.8 7.8 7.6 7.9 9.6 2009 8.2 7.6 7.6 8.0 9.3 2008 7.1 4.9 4.9 5.4 5.8 2007 6.3 4.1 4.1 4.6 4.7 2006 6.0 3.9 3.7 4.6 4.6 2005 7.0 4.2 4.1 4.8 5.1 2004 5.9 4.1 3.9 4.6 5.5

SOURCE: State of Maine, Department of Labor, Division of Economic Analysis and Research.

DISTRICT FINANCES

BUDGETARY PROCESS

Pursuant to Title 20-A, Section 1701(C) of the Maine Revised Statutes, as amended, the District’s budgets developed after January 1, 2008 must conform to the format and referendum procedures for RSUs and the District is deemed to be a RSU solely for the purpose of developing a budget as set forth in Title 20-A, Sections 1485 and 1486 of the Maine Revised Statutes, as amended. Accordingly, Title 20-A, Sections 1482- 1489 provides for a budget process for the District. The fiscal year (or “budget year”) of the District begins on the first day of July and ends on the 30th day of June of the following year. Pursuant to statute, the District School Committee annually prepare a budget for: (a) operational costs; (b) bonds falling due; (c) interest on bonds or other obligations; (d) rentals and other charges in a contract; and (e) temporary loans. The District’s budget must be approved at a budget meeting and by a budget validation referendum. The School Committee calls a budget meeting at a time it determines. At least seven days before the budget meeting the School Committee makes available to the legislative body responsible for final budget approval and residents of the District a detailed budget document, which includes a summary of anticipated revenues and estimated expenditures. The budget meeting is held, whereby a majority vote of the voters present and voting approve the annual budget. Following development of the annual budget and approval at the budget meeting, a budget validation referendum (the “Budget Validation Referendum”) must be held to allow the voters to validate or reject the total budget. The Budget Validation Referendum must be held on or before the 30th calendar day following the scheduled date of the budget meeting.

Failure to Approve Budget

If the voters do not validate the budget approved in the District budget meeting at the Budget Validation Referendum vote, the District School Committee holds another District budget meeting, in accordance with Sections 1486 and 1485 of Title 20-A of the Maine Revised Statutes, as amended, at least 10 days after the referendum, to vote on a budget approved by the District School Committee. The budget approved at the District budget meeting must be submitted to the voters for validation at referendum in accordance with this Section 1486. The process must be repeated until a budget is approved at a District budget meeting and validated at referendum. If a budget is not approved and validated before July 1st of each year, the latest budget approved at a District budget meeting, and submitted to the voters for validation at a referendum, is automatically considered the budget for operational expenses for the ensuing year until a final budget is approved at a District budget meeting and validated at a referendum.

Special Budget Meeting

Section 1488 of Title 20-A of the Maine Revised Statutes, as amended, provides that the District School Committee may call a special budget meeting when it declares that an emergency exists. The voters of the District may authorize the District School Committee, at a special District budget meeting, to expend additional funds from the District’s Unassigned Fund Balance or to pledge the credit of the District to obtain additional money for the operation of schools.

The District School Committee then issues its warrants to the assessors of each member municipality, requiring them to assess upon the taxable estates within the municipality an amount which is that municipality’s share of the District’s costs. Each municipal treasurer will pay the District amounts set by the District, in monthly installments on or before the 20th day of each month. The following table sets forth trends in the District’s General Fund budgets for the last four years and for the current fiscal year:

The District’s Budgets Fiscal Year Ending June 30,

2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 Revenues Municipal assessment $19,918,400 $20,617,861 $20,503,247 $20,956,631 $22,261,370 Charges for services 31,680 10,524 299,832 115,001 147,624 State shared revenues 624,928 753,690 790,647 550,357 726,441 Miscellaneous 37,529 29,500 39,500 517,000 527,782 Total Revenues 20,612,537 21,411,575 21,633,226 22,138,989 23,663,217 Expenditures Instructions 11,385,260 11,365,883 11,670,142 12,063,521 13,255,240 Debt Service 1,809,118 1,625,990 1,552,627 1,528,051 2,360,339 Instructional support 1,272,104 1,344,438 1,372,041 1,483,081 1,404,676 School administration 932,639 947,725 1,008,711 1,068,438 1,060,896 Operation and maint. 2,032,748 2,464,747 2,341,079 2,553,526 2,599,423 Student support 866,036 897,359 916,612 854,959 695,421 General administration 569,674 571,817 564,033 588,568 601,099 Other public programs 547,750 721,354 687,741 705,454 166,091 Capital improvement 31,000 0 0 0 200,000 Contingency 75,000 75,000 107,674 0 0 Student transportation 1,087,087 1,075,081 1,112,733 1,038,701 1,051,983 Adult education 308,121 273,181 299,833 254,690 268,049 Total Expenditures 20,916,537 21,362,575 21,633,226 22,138,989 23,663,217

Excess of Revenues (304,000) 49,000 200,000 220,143 390,500 Other Sources (Uses) 304,000 (49,000) (200,000) 0 (390,500) Total Other Sources $0 $0 $0 $220,143 $0

INVESTMENT POLICY

The District has, and adheres to, a formal “Revenue from Investments” policy, adopted by the School Committee on December 10, 2010, which addresses administration of an investment program. Furthermore, pursuant to applicable Maine law [Title 30-A, Section 5706 et seq. of the Maine Revised Statutes, as amended (the “Act”)] all investments of the District must be made with the judgment and care that persons of prudence, discretion and intelligence, under circumstances then prevailing, exercise in the management of their own affairs, not for speculation but for investment considering (i) safety of principal and maintenance of capital, (ii) maintenance of sufficient liquidity to meet all operating and cash requirements with which a fund is charged, that is reasonably expected, and (iii) return of income commensurate with avoidance of unreasonable risk. The District’s investment practice is to maintain a cash and investment pool that is available for use by all funds and consists of short-term investments. The District is invested principally in direct obligations of the United States government and its agencies. The District is not invested in any obligations typically referred to as derivatives, meaning obligations created from, or whose value depends on or is derived from the value of one or more underlying assets or indexes of asset values in which the municipality owns no direct interest.

FUND BALANCE

The District is compelled to maintain an unallocated fund balance in an amount not to exceed 3% each year due to the 3% law, as discussed below:

The 3% Law

Pursuant to Title 20-A, Section 15689-B(6) of the Maine Revised Statutes, as amended:

“Notwithstanding any other public or private statute, general operating fund balances at the end of a school administrative unit’s fiscal year must be carried forward to meet the school’s needs in the next year or over a period not to exceed 3 years. Unallocated balances in excess of 3% of the previous year’s school budget must be used to reduce the state and local share of the total allocation for the purpose of computing state subsidy. School boards shall have the discretion of carrying forward unallocated balances in excess of 3% of the previous year’s school budget and disbursing these funds in the next year or over a period not to exceed 3 years” (the “3% law”).

For fiscal years 2008/2009 through 2014/2015 only, SAUs may not be limited to 3% of the previous fiscal year's school budget. The 3% law applies only to “unallocated” fund balances. A SAU’s “allocated” balances are not subject to this limitation. A SAU’s legislative body may “allocate” its fund balance to the next year’s budget or into a reserve account through their annual budget process and/or a special article. The following is a worksheet that the State Department of Education (“DOE”) provides to SAUs to calculate its “unallocated” fund balance.

Unallocated Fund Balance Calculation

1) Prior Fiscal Year (“Prior FY”) Operating Budget (Prior FY EF-M-46, page 2, column 6, line 22) = $ ______2) 3% of Operating Budget (3% x $ ______) = $ ______3) Actual ending balance (Prior FY EF-M-45, page 12, column 1, line 13) = $ ______4) Balance used for budget purposes (allocated) (Current Fiscal Year EF-M-46, page 3, line 30) = $ ______5) Unallocated ending balance (3. minus 4.) = $ ______6) 3% X prior year's budget (2.) = $ ______7) Amount in excess of 3% (5. minus 6. or zero if less than zero) = $ ______

Typically the State DOE assumes that some or all excess is used to reduce any amounts raised locally without State participation. If some or all of the excess remains, then the State DOE will assume that the State share of the EPS allocation should have been reduced and prorate the State share accordingly.

Fund Balance as % Budgeted Expenditures

Fiscal Year Ended June 30, 2009 2010 2011 2012 2013 GAAP Unassigned(1) General Fund Balance ($980,223) ($517,997) ($79,079) $680,794 $155,624 Total Budgeted Expenditures 20,475,793 20,700,927 20,916,537 21,362,575 23,350,423 Fund Balance as % Expenditures (4.79%) (2.50%) (0.38%) 3.19% 0.67%

Budgetary Unassigned General Fund Balance(2) $978,825 $1,783,589 $2,202,739 $680,794 $155,624 Total Budgeted Expenditures 20,475,793 20,700,927 20,916,537 21,362,575 23,350,423 Fund Balance as % Expenditures 4.78% 8.62% 10.53% 3.19% 0.67%

NOTE: (1) The District implemented GASB 54 in FY 2011. Prior year amounts represent balances previously reported as “Undesignated”. (2) Generally accepted Accounting principles (“GAAP”) require that the cost of teachers’ summer salaries and benefits be recorded as a liability in the governmental activities which would reduce the net assets of the governmental activities and the fund balance of the General Fund by that amount. In conformity with GAAP, this accrual caused an Unassigned Fund Balance deficit versus on a Budgetary Basis.

Since the FY 2012, and going forward, the District, budgeted, and will budget, teachers’ summer salaries. Therefore there will be no difference between the Unassigned General Fund Balances determined under GAAP and a Budgetary Basis.

FINANCIAL STATEMENTS

Title 20-A, Chapter 221, Subchapter 2 and Title 30-A, Chapter 223, Subchapter 8 of the Maine Revised Statutes, as amended, provides for independent annual audits of the District’s accounts and establishes procedures for such audits. The District, in conformance with this statute, currently engages the services of Berry Talbot Royer, Certified Public Accountants (“Berry Talbot Royer”). The District’s fiscal year 2013 Annual Report, audited by Berry Talbot Royer, is presented as APPENDIX A to this Official Statement. The consent of Berry Talbot Royer for the incorporation of the Financial Statements included in APPENDIX A has not been requested by the District, nor has it been received.

The Member Communities’ most recent audited fiscal year’s Financial Statements are presented as APPENDIX B (Town of Ogunquit, Maine) and APPENDIX C (Town of Wells, Maine) to this Official Statement. Being of public record, the consent of the Member Communities or of its respective auditors has not been requested by the District, nor has it been received, for the incorporation as appendices to this Official Statement.

FUNDS

The accounts of the District are organized on the basis of funds or account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts which comprise its assets, liabilities, equities, revenues and expenditures or expenses. The following fund types and account groups are used by the District:

Governmental Funds

The General Fund is the general operating fund of the District. It is used to pay the general operating expenditures, the fixed charges and the capital improvement costs that are not paid through other funds.

Fiduciary Funds focuses on net assets held by the District in a trustee capacity or as an agent for individuals, private organizations and/or other funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations.

COMPARATIVE FINANCIAL STATEMENTS

The District

Displayed on the following pages are the comparative financial statements of the District’s Combined Balance Sheet – General Fund and the District’s Comparative Statement of Revenues, Expenditures and Changes in Fund Balances – General Fund for its five most recent audited fiscal periods.

The Member Communities

Also displayed on the following pages, are the comparative financial statements of the Member Communities’ Combined Balance Sheet – General Fund and Comparative Statement of Revenues, Expenditures and Changes in Fund Balances – General Fund, for its respective most recent three audited fiscal periods.

WELLS –OGUNQUIT COMMUNITY SCHOOL DISTRICT

COMPARATIVE BALANCE SHEET General Fund (As of June 30,)

2013 2012 2011 2010 2009 ASSETS Cash/investments $1,759,316 $3,102,643 $2,362,400 $1,832,413 $1,363,173 Accounts receivable 396,106 200 16,403 18,540 31,084 Prepaid expenses 0 560 0 0 0 Due from other 789,163 356,013 126,821 16,054 10,521 Inventories 36,048 56,506 34,619 46,778 55,060 TOTAL ASSETS 2,980,633 3,515,922 2,540,243 1,913,785 1,459,838

LIABILITIES & FUND EQUITY Liabilities: Accounts payable 100,546 110,145 200,327 51,356 56,168 Accrued wages & benefits 1,673,984 2,141,058 2,195,549 2,103,154 1,753,775 Accrued expenses 272,904 254,952 127,467 75,115 421,178 Deferred revenues 6,665 7,264 9,710 3,725 3,667 Total Liabilities 2,054,099 2,513,419 2,533,053 2,233,350 2,234,788

Fund Equity(1): Reserved - - - 198,432 205,273 Unreserved - - - (517,997) (980,223) Non-spendable 36,048 57,066 0 - - Restricted 49,670 64,496 86,122 - - Committed 205,192 Assigned 480,000 200,147 147 - - Unassigned 155,624 680,794 (79,079) - - Total Fund Equity 926,534 1,002,503 7,190 (319,565) (774,950)

TOTAL LIABILITIES AND EQUITY $2,980,633 $3,515,922 $2,540,243 $1,913,785 $1,459,838

Prepared from Audited Financial Statements NOTE: (1) Redefined, pursuant to GASB 54.

WELLS –OGUNQUIT COMMUNITY SCHOOL DISTRICT

COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES General Fund (For the Years Ended June 30,) 2013 2012 2011 2010 2009 REVENUES Taxes $20,673,300 $20,617,861 $19,918,400 $19,544,183 $19,318,352 Intergovernmental 766,141 770,269 659,112 947,103 1,378,617 Charges for services 34,297 37,348 25,055 34,996 35,495 Interest earned 9,210 6,750 5,393 7,736 11,869 On behalf payments 1,833,416 1,720,098 1,860,691 1,847,854 1,894,272 Miscellaneous 34,059 33,561 62,698 30,022 28,683 TOTAL REVENUES 23,350,423 23,185,887 22,531,349 22,411,894 22,667,288

EXPENDITURES Instructions 11,405,646 10,816,104 11,010,658 10,930,008 11,006,128 Debt service 1,552,837 1,620,990 1,743,171 1,847,929 1,907,347 Instructional support 1,316,521 1,252,970 1,207,384 1,202,515 1,262,010 School administration 1,008,601 982,887 929,012 903,701 909,518 Operation and Maintenance 2,355,257 2,356,781 2,085,472 1,908,545 1,986,535 Student support 934,737 859,415 847,232 806,011 913,874 General administration 673,696 556,219 565,328 566,092 619,205 Other public programs 694,722 665,063 530,472 512,280 500,325 Capital improvements 200,097 0 182,843 351,668 164,935 Contingency 0 0 67,302 0 0 Student transportation 1,037,145 989,021 957,875 1,001,161 927,235 Adult education 285,177 287,026 286,998 288,325 276,508 MainePERS 1,833,416 1,720,098 1,860,691 1,847,854 1,894,272 TOTAL EXPENDITURES 23,297,852 22,106,574 22,274,438 22,166,089 22,367,892

EXCESS REVENUES OVER (UNDER) EXPENDITURES 52,571 1,079,313 256,911 245,805 299,396 OTHER FINANCING Operating transfers in (out) (128,540) (84,000) (82,000) (80,000) (97,342) Capital lease 0 0 151,844 289,581 53,767 TOTAL OTHER (128,540) (84,000) 69,844 209,581 (43,575)

NET CHANGES (75,969) 995,313 326,755 455,386 255,821 FUND BALANCE, JULY 1 1,002,503 7,190 (319,565) (774,951) (1,030,771) FUND BALANCE, JUNE 30 $926,534 $1,002,503 $7,190 ($319,565) ($774,950)

NOTE: GAAP requires that the cost of teachers’ summer salaries and benefits be recorded as a liability in the governmental activities which would reduce the net assets of the governmental activities and the fund balance of the General Fund by that amount. In conformity with GAAP, this accrual caused an Unassigned Fund Balance deficit in fiscal years prior to 2011/2012 as follows:

2010/2011 2009/2010 2008/2009 2007/2008 Budgetary Fund Balance: $2,202,739 $1,783,589 $978,825 $509,413 Accrued Teachers Summer Salaries & Benefits: (2,195,549) (2,103,154) (1,753,775) (1,540,184) GAAP Unassigned Fund Balance: $7,190 ($319,565) ($774,950) ($1,030,771)

TOWN OF OGUNQUIT, MAINE

COMPARATIVE BALANCE SHEET COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES GENERAL FUND AND CHANGES IN FUND BALANCES (As of June 30,) GENERAL FUND (For the Years Ended June 30,) 2013 2012 2011 2013 2012 2011 ASSETS REVENUES Cash $3,366,409 $2,187,507 $2,557,065 Taxes $9,984,425 $9,834,925 $9,306,764 Taxes receivable 426,425 509,981 391,718 Intergovernmental 61,189 70,857 66,298 Tax liens receivable 77,323 55,104 119,726 Licenses, permits & fees 2,105,739 1,935,696 1,927,108 Accounts receivable 41,015 58,658 80,670 Charges for services 154,840 162,625 209,231 Due from other 0 0 0 Investment income 104 7,059 6,982 TOTAL ASSETS 3,911,172 2,811,250 3,149,179 Miscellaneous 65,356 69,999 85,908 TOTAL REVENUES 12,371,653 12,081,161 11,602,291 LIABILITIES EXPENDITURES Accounts payable 0 0 0 Current: Accrued expenses 900 1,621 120 General government 1,163,677 1,107,644 1,087,086 Deferred revenues 361,000 456,000 460,000 Public works 1,591,300 1,446,524 1,442,451 Due to other 951,587 171,356 472,652 Protection 2,668,301 2,674,204 2,457,401 TOTAL LIABILITIES 1,313,487 628,977 932,772 Culture & recreation 526,309 491,599 409,343 General assistance 2,183 494 1,327 EQUITY(1) Debt service 681,500 699,286 554,147 Fund balances: - - - Health & social 7,300 7,260 19,550 Designated - - - Education 4,606,996 4,568,861 4,407,158 Unreserved - - - Fixed charges 702,773 684,574 678,035 Non-spendable 0 0 0 Capital outlay 68,902 186,849 65,755 Restricted 0 0 0 TOTAL EXPENDITURES 12,019,241 11,867,295 11,122,253 Committed 0 0 350,000 EXCESS OF REVENUES Assigned 0 0 0 OVER EXPENDITURES 352,412 213,866 480,038 Unassigned 2,597,685 2,182,273 1,866,407 TOTAL EQUITY 2,597,685 2,182,273 2,216,407 OTHER FINANCING Operating transfers/Bonds 63,000 (248,000) (777,000) TOTAL LIABILITIES TOTAL OTHER 63,000 (248,000) (777,000) AND EQUITY $3,911,172 $2,811,250 $3,149,179 NET CHANGE 415,412 (34,134) (296,962) Prepared from Audited Financial Statements FUND BALANCE, JULY 1, 2,182,273 2,216,407 2,513,369 NOTE: (1) Redefined, pursuant to GASB 54. FUND BALANCE, JUNE 30, $2,597,685 $2,182,273 $2,216,407

TOWN OF WELLS, MAINE

COMPARATIVE BALANCE SHEET COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES AND GENERAL FUND CHANGES IN FUND BALANCES (As of June 30,) GENERAL FUND (For the Years Ended June 30,) 2013 2012 2011 2013 2012 2011 ASSETS REVENUES Cash $14,232,354 $15,375,245 $15,014,797 Taxes $28,220,897 $27,827,401 $26,824,091 Investments 177,244 194,300 193,249 Intergovernmental 590,064 866,115 893,779 Accounts receivable: Charges for services 840,035 1,341,357 1,467,268 Taxes receivable 1,273,321 1,132,346 1,093,081 Investment income 66,252 48,781 50,399 Tax liens receivable 267,040 301,328 316,535 Other 262,605 280,593 448,349 Other receivable 111,756 9,787 23,168 TOTAL REVENUES 29,979,853 30,364,247 29,683,886 Tax acquired property 43,531 68,051 68,743 EXPENDITURES Restricted cash 0 166,738 80,022 General government 3,686,835 3,540,960 3,568,029 Due from other funds 210,143 0 32,759 Public safety 3,729,639 3,544,405 3,748,222 TOTAL ASSETS 16,315,389 17,247,795 16,822,354 Health and sanitation 274,388 405,443 504,357 LIABILITIES Recreation and culture 427,243 510,428 466,654 Accounts payable 198,891 91,969 466,901 Education 16,065,941 16,049,000 15,511,240 Accrued expenses 133,685 28,153 62,034 Public works 1,124,215 866,027 1,615,677 Prepaid taxes 6,142 4,314 5,944 Beach & harbors 215,270 244,805 228,236 Due to other funds 6,195,985 7,293,504 6,857,456 Library 346,658 333,982 347,598 Deferred revenues 1,018,499 1,051,078 1,065,898 County tax 1,521,817 1,505,502 1,488,326 Escrows 387,392 326,626 268,403 Unclassified 240,057 177,452 194,202 Other 0 0 80,022 Debt service 670,831 742,420 749,530 TOTAL LIABILITIES 7,940,594 8,795,644 8,806,658 TOTAL EXPENDITURES 28,302,894 27,920,424 28,422,071 FUND EQUITY(1) EXCESS OF REVENUES Unreserved (Desig.) - OVER EXPENDITURES 1,676,959 2,443,823 1,261,815 Unreserved (Undesig.) - OTHER: Non-spendable 43,531 68,051 68,743 Operating transfers in (out) (2,348,152) 19,472 0 Restricted 0 240,991 232,391 Sale of property 593,837 (2,026,840) (807,962) Committed 0 0 0 TOTAL OTHER (1,754,315) (2,007,368) (807,962) Assigned 184,149 275,024 266,610 NET CHANGE (77,356) 436,455 453,853 Unassigned 8,147,115 7,868,085 7,447,952 FUND BALANCE, JULY 1 8,452,151 8,015,696 7,561,843 TOTAL EQUITY 8,374,795 8,452,151 8,015,696 FUND BALANCE, JUNE 30 $8,374,795 $8,452,151 $8,015,696 TOTAL LIABILITIES AND FUND EQUITY $16,315,389 $17,247,795 $16,822,354 NOTE: Prepared from Audited Financial Statements (1) Redefined, pursuant to GASB 54.

PROPERTY TAXATION

The principal tax of the municipalities within the territory of the District is the tax on real and personal property. There is no limit as to rate or amount. A single tax applies for each fiscal year to the assessed value of the taxable real or personal property. Each Member Communities’ Tax Collector receives the tax commitment from the Member Communities’ Assessor, with assessed values as of April 1 of each year, after which time the tax bills are mailed. The tax due date(s) for fiscal year 2014/2015 for Ogunquit will be November 1, 2014 and May 1, 2015; fiscal year 2013/2014 for Wells is November 4, 2013, and May 4, 2014. All taxes paid after the due date will be subject to interest, at the rate of 7.0%, respectively, per annum.

Real Estate Taxes

Collection of real estate taxes is ordinarily enforced in a municipality by the “tax lien” procedure as provided in the Maine Revised Statutes, as amended, to the collection of delinquent real estate taxes. Real Estate Tax Liens are recorded against the individual property at the County Registry of Deeds. This lien has priority over all mortgages, liens, attachments and encumbrances of any nature, subject to any paramount federal tax lien and subject to bankruptcy and insolvency laws. If the account is not satisfied within 18 months, the property becomes tax acquired and may be disposed of by a municipality.

Business Personal Property Taxes

In 2006 the Maine Legislature enacted LD 2056, codified as Title36, Chapter 105, Subchapter 4-C of the Maine Revised Statutes, as amended, which exempts from taxation, beginning with the April 1, 2008 tax year, various types of tangible business personal property subject to an allowance for depreciation and some specialty types of real property improvements. The exemption does not apply to: Office furniture; Lamps and lighting fixtures used to provide general purpose office or worker lighting; Property owned or used by public utilities and persons providing certain television/telecommunications services; Telecommunications personal property subject to the tax imposed by section 457 of Title 36; Gambling machines or devices and associated equipment; Property located at a retail sales facility unless such facility is more than 100,000 square feet in size and owned by a business whose Maine-based operations derive less than 30% of their total annual revenue from sales in the State.

Through the Business Equipment Tax Exemption Program (“BETE”) the State will reimburse municipalities with respect to the lost property taxes associated with this new exemption. For the purposes of identifying the municipality’s valuation for determining the local property tax rate, the value of all property made exempt by this legislation in the municipality must be considered part of that municipality’s local valuation to the extent the municipality is being reimbursed for its lost property taxes by the State other than property located in, and the assessed value of which is retained in, a tax increment financing district.

The value of all property made exempt by this law in the municipality will also be considered part of that municipality’s equalized State Valuation to the extent the municipality is being reimbursed for its lost property taxes by the State with an additional adjustment for property in a tax increment financing district.

The law provides some additional security for the municipal reimbursement system by funding the reimbursements described above directly from State Income Tax receipts before those receipts are deposited into the State’s General Fund, rather than as an annual General Fund appropriation.

Member Communities’ Largest Taxpayers

As of April 1, 2013 Taxpayer Town Business Assessed Property % of Town’s Total Tax Levy Shaws Realty Co & PP Wells Food Distribution $22,938,777 $209,202 0.79% Lafayetts Wells, Inc. Wells Motel/Lodging 20,426,262 186,288 0.71% Amio, LLC Ogunquit Lodging 23,982,250 179,866 1.83% Layfayette Ogunquit Ogunquit Lodging 15,078,300 113,087 1.15% Central Maine Power Co Wells Elec. Dist. 12,300,730 112,183 0.43% JRS Realty Trust of ME Wells Industrial Factory 11,527,750 105,133 0.40% Pike Industries Inc. Wells Mineral Extraction 9,576,754 87,340 0.33% Beachmere Ltd Ogunquit Lodging 11,404,700 85,535 0.87% Moores Sparhawk Ogunquit Lodging 10,772,600 80,794 0.82% Maritimes & NE Pipeline Wells Natural Gas 8,789,581 80,161 0.30% Griffin, Wayne Ogunquit Residence 9,360,300 70,202 0.71% Philip Cavaretta Ogunquit Lodging 9,096,600 68,179 0.69% Kletjian, Donna Ogunquit Residence 7,772,300 58,292 0.59% Eagle Development LLC Wells Condo 6,038,060 55,067 0.21% Wells Hotel LLC Wells Lodging 5,881,650 53,641 0.20% Jean, Gerald Wells Lodging 5,838,160 53,244 0.20% Juniper Hill Inn, LLC Ogunquit Lodging 6,264,600 46,984 0.48% Gorges Grant LLC Ogunquit Lodging 6,026,800 45,201 0.46% Amio LLC Ogunquit Lodging 5,358,000 40,185 0.41%

Member Communities’ Tax Levy and Collections

Town of Ogunquit, Maine

Equalized Collections Fiscal State Assessed Tax Tax (after Supplements and Abatements) Yr. End Valuation Valuation Rate Levy June 30, (000) (000) (000) (000) Year End % of % of Levy (000) Levy A/O 6/30/14 2014 $1,256,200 $1,312,786 $7.50 $9,846 --- In Process --- 2013 1,272,150 1,301,390 7.31 9,513 $9,461 95.50% 99.5% 2012 1,282,500 1,294,277 7.31 9,461 8,943 94.49 99.99 2011 1,297,600 1,292,431 6.88 8,884 8,487 95.59 99.99 2010 1,327,550 1,298,316 6.76 8,748 8,099 93.16 99.99

Town of Wells, Maine

Equalized Collections Fiscal State Assessed Tax Tax (after Supplements and Abatements) Yr. End Valuation Valuation Rate Levy Year End % of % of Levy June 30, (000) (000) (000) (000) (000) Levy A/O 6/30/14 2014 $2,773,550 $2,890,663 $9.12 $26,363 --- In Process --- 2013 2,800,800 3,039,040 8.63 26,227 $24,975 95.23% 99.08% 2012 2,874,800 3,006,525 8.63 25,946 24,840 95.73 97.79 2011 2,810,250 2,976,033 8.43 25,088 24,030 95.78 99.10 2010 2,934,900 2,929,174 8.33 24,400 23,275 95.38 99.88

REVENUES FROM THE STATE

The State subsidizes most local school administrative units through the EPS model of calculating and distributing state education aid. EPS utilizes a number of factors that are subject to change each year. In addition, the EPS model itself is subject to change by the Legislature. Furthermore, subsidies for SAUs are an annual item in the State’s budgetary process and are subject to legislative appropriation in that process.

Fiscal General State Yr. End Revenue & Agency Medicaid Adult Total State June 30, Debt Service Client Reimbursement Education Revenues 2013 $677,698 $0 $22,079 $66,364 $766,141 2012 660,196 0 31,711 78,362 770,269 2011 549,267 1,126 23,719 85,000 659,112 2010 747,644 16,627 101,509 81,323 947,103 2009 1,172,244 10,968 123,396 72,009 1,378,617

DISTRICT’S LOCAL COST BUDGET AND ASSESSMENTS

The Member Communities’ Equalized State Valuation

The following is a list of the Member Communities’ last ten years Equalized State Valuation filed by the State Tax assessor to the Secretary of State pursuant to Title 36, Sections 208 and 305 of the Maine Revised Statutes, as amended:

Consolidated Equalized State Valuation for Member Communities

Town of Town of Total Year Ogunquit Wells District ESV (000) % ESV (000) % ESV 2014 $1,256,200 31.17% $2,773,550 68.83% $4,029,750 2013 1,272,150 31.23% 2,800,800 68.77% 4,072,950 2012 1,297,600 31.10% 2,874,800 68.90% 4,172,400 2011 1,282,500 31.30% 2,810,250 68.70% 4,092,750 2010 1,327,550 31.10% 2,934,900 68.90% 4,262,450 2009 1,312,150 30.30% 3,012,150 69.70% 4,324,300 2008 1,241,450 30.40% 2,843,750 69.60% 4,085,200 2007 1,312,550 33.00% 2,670,200 67.00% 3,982,750 2006 1,210,300 34.40% 2,309,200 65.60% 3,519,500 2005 1,040,600 33.60% 2,053,900 66.40% 3,094,500

Cost Sharing in the District

The Member Communities share that part of the District’s budget not funded from State Aid, other budgeted revenues or carry forwards (all defined terms as defined herein; see “DISTRICT FINANCES - DISTRICT’S LOCAL COST BUDGET AND ASSESSMENTS – Cost Sharing in the District”). Since fiscal year 2002/2003, according to Chapter 83, Section 3 of the Private and Special Laws of Maine (1999) 66.7% of the total assessment is assessed in the same proportion of the Equalized State Valuation of each Member Community, for the year preceding the year to which the budget applies, to the total Equalized State Valuation of the Member Communities; and 33.3% of the total assessment is assessed in the same proportion as the average number of resident students of each Member Community for the year

preceding the year to which the budget applies, to the total number of resident students of each of the Member Communities. The following table displays various characteristics, some of which may have been considered in the formula to calculate Local Cost assessments; and the assessments paid to the District over the three most recent fiscal years:

Characteristics for Allocation of District’s Local Costs

Ogunquit Wells Total Enrollment 55.5 1,270.0 1,325.5 Population 892 9,589 10,481 2013 ESV $1,277,325,000 $2,805,525,000 $4,082,850,000 Enrollment 4.19% 98.81% 100.00% Population 8.51% 91.49% 100.00% 2013 ESV 31.17% 68.83% 100.00%

As % ESV 20.87% 45.83% 66.67% As % Enrollment 1.39% 31.91% 33.33% % Total Assessment 22.26% 77.74% 100.00%

NOTE: Pursuant to Title 36, §208 of the Maine Revised Statutes, as amended, the State Tax Assessor equalizes and adjusts the assessment list of each municipality to its just value as of April 1st of each year (the “Equalized State Valuation” or “ESV”). Title 36, §305 of the Maine Revised Statutes, as amended, provides that the State Tax Assessor must certify to the Secretary of State before the first day of February the equalized just value of all real and personal property in each municipality.

Historical Allocation for District’s Local Costs

2012/2013 Assessment Ogunquit Wells Total Valuation $4,253,078 31.10% $9,422,588 68.90% $13,675,666 100.00% Enrollment 301,144 4.41% 6,526,437 95.59% 6,827,581 100.00% Wgt’d.Total $4,554,222 22.21% $15,949,025 77.79% $20,503,247 100.00%

2013/2014 Assessment Ogunquit Wells Total Valuation $4,350,958 31.34% 9,533,942 68.66% $13,884,900 100.00% Enrollment 299,244 4.32% 6,632,798 95.68% 6,932,042 100.00% $4,650,202 22.34% 16,166,740 77.66% $20,816,942 100.00% Wgt’d.Total 2014/2015 Assessment Ogunquit Wells Total Valuation $4,645,321 31.17% $10,023,013 68.83% $14,848,334 100.00% Enrollment 310,391 4.19% 7,102,645 98.81% 7,413,036 100.00% Wgt’d. Total $4,955,712 22.26% 17,305,658 77.74% $22,261,370 100.00%

INDEBTEDNESS

LIMITATIONS AND EXCLUSIONS

The District’s Debt Limitations

Pursuant to the Enabling Act, the District School Committee is vested with the authority of a board of trustees under the general laws to borrow, and may borrow money to pay for current operating expenses, school construction projects, and minor capital costs. Referendum approval is required to borrow for school construction costs. Accordingly, the District voters approved the issuance of the Bonds at referendum on November 5, 2013. The aggregate principal amount of outstanding debt issued or assumed by a District for major capital and minor capital purposes (i.e., school construction and renovation, improvement and repair of facilities), shall not exceed 10% of the total of the last preceding Equalized State Valuation of all of the municipalities within the District.

The consolidated 2014 Equalized State Valuation for the Member Communities is $4,029,750,000. The District’s 10% debt limitation is $402,975,000. As of June 30, 2014, the District’s long-term debt outstanding is estimated to be $7,772,743 (unaudited) or 0.19% of the consolidated 2014 Equalized State Valuation of the Member Communities. The District will certify on the date of issue of the Bonds that the CSD has not exceeded the foregoing debt limits and that issuance of the Bonds will not cause the District to exceed the debt limit.

The Member Communities’ Debt Limitations

Although the indebtedness of the Bonds are the indebtedness of the District, and not directly of the Member Communities, the tax base of the District is the same as the tax base of the Member Communities. Therefore, the current indebtedness of the Member Communities is included in the below discussions.

Member Communities’ Statutory Limitations

In accordance with Title 30-A, Section 5702 of the Maine Revised Statutes, as amended, “No municipality may incur debt which would cause its total debt outstanding at any time, exclusive of debt incurred for school purposes, for storm or sanitary sewer purposes, for energy facility purposes or for municipal airport purposes to exceed 7 1/2% of its last full state valuation, or any lower percentage or amount that a municipality may set. A municipality may incur debt for school purposes to an amount outstanding at any time not exceeding 10% of its last full state valuation, or any lower percentage or amount that a municipality may set, for storm and sanitary sewer purposes to an amount outstanding at any time not exceeding 7 1/2% of its last full state valuation, or any lower percentage or amount that a municipality may set, and for municipal airport and special district purposes to an amount outstanding at any time not exceeding 3% of its last full state valuation, or any lower percentage or amount that a municipality may set; provided, however, that in no event shall any municipality incur debt which would cause its total debt outstanding at any time to exceed 15% of its last full state valuation, or any lower percentage or amount that a municipality may set.” Title 30-A, Section 5703 of the Maine Revised Statutes, as amended, provides that the limitations on municipal debt contained in Section 5702 do not apply “... to any funds received in trust by any municipality, any loan which has been funded or refunded, notes issued in anticipation of federal or state aid or revenue sharing money, tax anticipation loans, notes maturing in the current municipal year, indebtedness of entities other than municipalities, indebtedness of any municipality to the Maine School Building Authority, debt issued under chapter 235 and Title 10, chapter 110, subchapter IV, obligations payable from revenues of the current municipal year from other

revenues previously appropriated by or committed to the municipality, and the state reimbursable portion of school debt.”

Ogunquit, Maine

On January 1, 2014 Ogunquit’s Equalized State Valuation is $1,256,200,000. The 15% debt limit is $188,430,000. As of June 30, 2014 the Town’s long-term debt is projected to be $7,065,979 (unaudited) or 0.56% of the Equalized State Valuation.

Wells, Maine

On January 1, 2014 Wells’ Equalized State Valuation is $2,773,550,000. The 15% debt limit is $416,032,500. As of June 30, 2012 the Town’s long-term debt is projected to be $4,150,000 (unaudited) or 1.49% of the Equalized State Valuation.

County of York, Maine

The Member Communities are subject to an annual assessment of its proportional share of the County of York’s (the “County”) expenses, including debt repayment, as determined by the percentage of the Member Community’s Equalized State Valuation to the County’s Equalized State Valuation. At January 1, 2014 the Member Communities consolidated Equalized State Valuation of $4,029,750,000 is 14.04% of the County’s Equalized State Valuation of $28,703,250,000. The Member Communities’ share is 14.04%, or $1,109,109, of the County’s $7,900,000 long-term debt projected to be outstanding as of June 30, 2014 (unaudited).

DISTRICT DEBT SUMMARY

Balance as of Balance as of Balance as of Year Amount Date of Final June 30, 2013 June 30, 2014 June 30, 2015 Issued Purpose Issued Maturity (Audited) (Projected) (Projected) 2002 School(1) $14,000,000 11/01/2022 $6,961,743 $6,261,743 $5,561,743 2004 School 5,000,000 11/01/2014 1,000,000 500,000 0 2004 SRRF(2) 1,000,000 11/01/2015 240,000 160,000 80,000 2013 Fields 851,000 11/01/2018 0 851,000 680,000 Sub-totals $8,201,743 $7,772,743 $6,321,743 2014 High School 26,850,000 1/01/2034 0 0 26,850,000 Totals $8,201,743 $7,772,743 $33,171,743

NOTES: (1) Effective May 1, 2011, the original annual interest amounts and portions of the principal payments, due November 1, 2021 and 2022, were reduced by the Maine Municipal Bond Bank (the “MMBB”).

(2) $1,000,000 was borrowed under the SRRF Program to finance a portion of the costs of the School Projects. $200,000 was forgiven by the State, and need not be repaid. The balance of $800,000 is paid in ten equal annual installments, at 0% interest.

PROJECTED PRINCIPAL PAYMENTS OF THE DISTRICT, BY ISSUE

Fiscal Due 2002 2004 2004 2013 2014 Total Year Nov. 1, Issue Issue SRRF Issue Issue Debt 2014/2015 2014 $700,000 $500,000 $80,000 $171,000 $0 $1,451,000 2015/2016 2015 700,000 80,000 170,000 1,345,000 2,295,000 2016/2017 2016 700,000 170,000 1,345,000 2,215,000 2017/2018 2017 700,000 170,000 1,345,000 2,215,000 2018/2019 2018 700,000 170,000 1,345,000 2,215,000 2019/2020 2019 700,000 1,345,000 2,045,000 2020/2021 2020 700,000 1,345,000 2,045,000 2021/2022 2021 690,794 1,345,000 2,035,794 2022/2023 2022 670,949 1,345,000 2,015,949 2023/2024 2023 1,345,000 1,345,000 2024/2025 2024 1,345,000 1,345,000 2025/2026 2025 1,340,000 1,340,000 2026/2027 2026 1,340,000 1,340,000 2027/2028 2027 1,340,000 1,340,000 2028/2029 2028 1,340,000 1,340,000 2029/2030 2029 1,340,000 1,340,000 2030/2031 2030 1,340,000 1,340,000 2031/2032 2031 1,340,000 1,340,000 2032/2033 2032 1,340,000 1,340,000 2033/2034 2033 1,340,000 1,340,000 2034/2035 2034 1,340,000 1,340,000 $6,261,743 $500,000 $160,000 $851,000 $26,850,000 $34,622,743

PROJECTED DEBT SERVICE REQUIREMENTS OF THE DISTRICT

Fiscal Current Debt Projected Debt Projected Yr. End Total Total Total June 30, Principal Interest Debt Principal Interest Debt Debt 2015 $1,451,000 $290,792 $1,661,792 $0 $499,416 $499,416 $2,161,207 2016 950,000 240,856 1,110,856 1,345,000 726,425 2,071,425 3,182,281 2017 870,000 201,386 1,071,386 1,345,000 699,525 2,044,525 3,115,911 2018 870,000 161,451 1,031,451 1,345,000 672,625 2,017,625 3,049,076 2019 870,000 121,535 991,535 1,345,000 645,725 1,990,725 2,982,260 2020 700,000 83,221 783,221 1,345,000 618,825 1,963,825 2,747,046 2021 700,000 46,191 746,191 1,345,000 591,925 1,936,925 2,683,116 2022 690,794 18,375 709,169 1,345,000 565,025 1,910,025 2,619,194 2023 670,949 0 670,949 1,345,000 531,400 1,876,400 2,547,349 2024 1,345,000 491,050 1,836,050 1,836,050 2025 1,345,000 443,975 1,788,975 1,788,975 2026 1,340,000 396,975 1,736,975 1,736,975 2027 1,340,000 356,775 1,696,775 1,696,775 2028 1,340,000 316,575 1,656,575 1,656,575 2029 1,340,000 276,375 1,616,375 1,616,375 2030 1,340,000 236,175 1,576,175 1,576,175 2031 1,340,000 195,975 1,535,975 1,535,975 2032 1,340,000 154,938 1,494,938 1,494,938 2033 1,340,000 112,225 1,452,225 1,452,225 2034 1,340,000 67,838 1,407,838 1,407,838 2035 1,340,000 22,613 1,362,613 1,362,613 Totals $7,772,743 $1,163,806 $8,776,549 $26,850,000 $8,622,378 $35,472,378 $44,248,927

DEBT RATIOS

Ogunquit, Maine

Fiscal Equalized Debt Per Yr. End State as % Capita June 30, Population Valuation Debt Eq. Val. Debt 2014 892 $1,256,200 $7,065,979 0.56% $7,921.50 2013 892 1,272,150 7,584,864 0.60 8,503.21 2012 892 1,297,600 6,828,749 0.53 7,655.55 2011 892 1,282,500 7,277,634 0.57 8,158.78 2010 892 1,327,550 5,388,169 0.41 6,040.55

Wells, Maine

Fiscal Equalized Debt Per Yr. End State as % Capita June 30, Population Valuation Debt Eq. Val. Debt 2014 9,589 $2,773,550 $4,150,000 0.15% $432.79 2013 9,589 2,800,800 1,765,000 0.06 184.07 2012 9,589 2,874,800 2,360,000 0.08 246.12 2011 9,589 2,810,250 3,005,000 0.11 313.38 2010 9,589 2,934,900 3,635,000 0.12 379.08

Member Communities and the District

Fiscal Consolidated Total Debt Consolidated Ratios Yr. End Eq. Val. Member Total Debt % Debt Per June 30, Pop. (000) Communities District Debt Eq. Val. Capita 2014 10,481 $4,029,750 $11,215,979 $34,622,743 (1) $45,838,722 1.14% $4,373.51 2013 10,481 4,072,950 9,349,864 8,201,743 17,551,607 0.43 1,674.61 2012 10,481 4,172,400 9,188,749 9,481,743 18,670,492 0.45 1,781.37 2011 10,481 4,092,750 10,282,634 10,800,000 21,082,634 0.52 2,011.51 2010 10,481 4,262,450 9,023,169 12,080,000 21,103,169 0.50 2,013.47

NOTE: (1) While not incurred until after June 30, 2014 the Bonds, in the amount of $26,850,000, are added to the fiscal year end total of $7,772,743 for illustrative purposes.

OVERLAPPING DEBT

The District does not have any obligations for which it is responsible for on an overlapping basis.

CONTINGENT DEBT

The District does not have any obligations for which it is responsible for on a contingent basis.

FUTURE FINANCING

Following the issuance of the Bonds of this financing, the District has no authorized but unissued debt outstanding.

RETIREMENT

A. DEFINED BENEFIT PENSION PLAN – CONSOLIDATED PLAN

Description of the Plan

The District, contributes to the Maine Public Employees Retirement System’s (“MainePERS”) Consolidated Plan, a cost-sharing multiple-employer defined benefit pension plan. MainePERS is successor to the Maine State Retirement System (“MSRS”). The MSRS was established in 1942, and effective September 20, 2007, by virtue of Chapter 58 of the Public Laws of 2007, MSRS was renamed MainePERS. MainePERS was established and is administered under the Maine State Retirement System Laws, Title 5, Chapters 421, 423 and 425 of the Maine Revised Statutes, as amended. MainePERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to its members and which include employees of participating local districts. Information concerning the pension plan benefit obligation for public teachers is available from MSRS, which issues a publicly available financial report. This report may be obtained by writing the Maine State Retirement System, 46 State House Station, Augusta, ME 04333-0046 or by calling 1 (800) 451-9800.

Funding Policy

Plan members are required to contribute 6.5% of their annual covered salary and the District is required to contribute at actuarially determined rate. The contribution requirements of the plan members and the District are established by and may be amended by the MainePERS Board of Trustees. The District’s contributions to the Consolidated Plan for the fiscal years ending June 30, 2013was $63,160.

Employer Contribution Rates

The MainePERS Board of Trustees has increased employer contribution rates for the PLD Consolidated Plan based upon actuarial recommendations. The following table shows the rates for fiscal year ended June 30, 2013, new rates for fiscal year ended June 30, 2014 and for fiscal year ended June 30, 2015:

Plan FY 2013 FY 2014 FY 2015 Regular AC 5.3% 6.5% 7.8%

B. DEFINED BENEFIT PENSION PLAN – TEACHERS GROUP

Description of the Plan

Teachers, and other qualified District employees, participate in MainePERS through the Teachers Retirement Plan (the “Teachers Group”), an “Agent, Multiple-Employer, Defined Benefit Pension Plan”. MainePERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to its plan members and beneficiaries. The authority to establish and amend benefit provisions rests with the State legislature. Information concerning the pension plan benefit obligation for public teachers is available from MSRS, which issues a publicly available financial report. This report may be obtained by writing the Maine State Retirement System, 46 State House Station, Augusta, ME 04333- 0046 or by calling 1 (800) 451-9800.

Funding Policy

Plan members are required to contribute 7.65% of their compensation to the retirement system. The State of Maine Department of Education had been required, by statute, to contribute the employer contribution,

which amounted to $1,833,416 (or 16.33%) for the fiscal year ended June 30, 2013. There was no contribution required by the District, except for federally funded teachers, for which the District contributed 16.33% of their compensation which was charged to the applicable grant. Beginning on July 1, 2013, as a result of the State Biennial budget, the District will be responsible for approximately half of the normal cost of the Teachers Group. This approximates 2.65% of compensation.

C. SOCIAL SECURITY

The District provides full social security coverage to certain full-time, all part-time, seasonal and temporary employees under the Omnibus Budget Reconciliation Act of 1990, and Internal Revenue Service regulations, which became effective July 1, 1991. Non-teaching, eligible District employees are covered under Social Security, and may participate in the MSRS. The District’s contribution to Social Security for this period ended June 30, 2013 was $279,603.

D. OTHER POST EMPLOYMENT BENEFITS

The Governmental Accounting Standards Board (“GASB”) recently promulgated its Statement 45 which addressed the reporting and disclosure requirements for other post employment benefits (“OPEB”). GASB Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, (“GASB 45”) was implemented, as required, by the District for the year ended June 30, 2009. GASB 45requires that the long-term cost of retirement health care and obligations for other postemployment benefits be determined on an actuarial basis and reported similar to pension plans.

The District’s heath insurance carrier is Anthem/Blue Shield for its active employees. The District is not obligated to, and does not, provide its retired employees with health care or other post employment benefits and, therefore, has no OPEB obligation or liability.

ENVIRONMENTAL MATTERS

Securities and Exchange Commission Regulation 229.103 (the “Regulation”) requires that issuers subject to the disclosure requirements of the Securities Exchange Act of 1934 disclose, among other things, any material pending legal proceedings, including without limitation, legal proceedings involving environmental issues. That Regulation states that no information need be given with respect to any proceeding that involves primarily a claim for damages if the amount involved, exclusive of interest and costs, does not exceed ten percent (10%) of the current assets of the issuer, and, if a governmental authority is a party to such proceeding and such proceeding involves potential monetary sanctions, unless the issuer reasonably believes that such proceeding will result in no monetary sanctions, or in monetary sanctions, exclusive of interest and costs, of less than $100,000. Although the District, as an issuer of municipal securities, is not subject to the provisions of the Regulation or the Securities Exchange Act of 1934, the District is voluntarily making the disclosure required by the Regulation with respect to environmental liabilities: The District is not subject to any pending legal proceedings involving environmental matters that would require disclosure under the Regulation were the District subject to its provisions. LITIGATION

In the opinion of District officials there is no litigation pending against the District which, either individually or in the aggregate, would result in judgments that would have a materially adverse effect on the District’s financial position or its ability to meet its debt service obligations.

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APPENDIX A

WELLS-OGUNQUIT COMMUNITY SCHOOL DISTRICT ANNUAL FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES FOR THE YEAR ENDED JUNE 30, 2013

(With Report of Independent Auditors Thereon)

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APPENDIX B

TOWN OF OGUNQUIT, MAINE ANNUAL FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES FOR THE YEAR ENDED JUNE 30, 2013

(With Report of Independent Auditors Thereon)

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APPENDIX C

TOWN OF WELLS, MAINE ANNUAL FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES FOR THE YEAR ENDED JUNE 30, 2013

(With Report of Independent Auditors Thereon)

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APPENDIX D

PROPOSED FORM OF LEGAL OPINION

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APPENDIX E

PROPOSED FORM OF CONTINUING DISCLOSURE CERTIFICATE

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WELLS-OGUNQUIT COMMUNITY SCHOOL DISTRICT, MAINE PROPOSED FORM OF CONTINUING DISCLOSURE CERTIFICATE

In connection with the issuance by the Wells-Ogunquit Community School District (the “Issuer”) of its $26,850,000 2014 General Obligation Bonds, dated as of August 28 (the “Bonds”) and with reference to the continuing disclosure requirements of Rule 15c2-12 under the Securities and Exchange Act of 1934, as amended, and officially interpreted from time to time (the “Rule”), the Issuer hereby covenants that it will engage in the undertakings described in Paragraphs 1, 2 and 3 herein for the benefit of the beneficial owners of the Bonds, subject to the conditions and limitations specified herein. The Issuer reserves the right to incorporate by reference its Official Statement dated August 12 relating to the Bonds (the “Official Statement”), which will be submitted to the MSRB, as hereinafter defined, at the time of delivery of the Bonds, in any future disclosure provided hereunder. 1. The Issuer will provide to the Municipal Securities Rulemaking Board established under the Securities and Exchange Act of 1934, as amended, or any successor thereto (“MSRB”): (a) not later than 270 days after the end of each fiscal year, commencing with the fiscal year ending June 30, 2015, financial information and operating data relating to the Issuer for the preceding fiscal year of the type presented in the Official Statement prepared in connection with the Bonds regarding (i) revenues and expenditures of the Issuer relating to its operating budget, (ii) capital expenditures, (iii) fund balances, (iv) property tax rate information, (v) outstanding indebtedness and overlapping debt of the Issuer, (vi) pension and other post employment benefit obligations of the Issuer, and (vii) such other financial information and operating data as may be required to comply with the Rule; and (b) promptly upon their public release, the audited financial statements of the Issuer, prepared in accordance with generally accepted accounting principles. The Issuer reserves the right to modify from time to time the specific types of information provided under clause (a) above or the format of the presentation of such information to reflect changed circumstances, provided that any such modification will be done in a manner consistent with the Rule. 2. The Issuer will provide in a timely manner not in excess of ten (10) business days after the occurrence of an event listed in this Section 2 to the MSRB notice of the occurrence of any of the following events with respect to the Bonds: a. Principal and interest payment delinquencies; b. Non-payment related defaults, if material; c. Unscheduled draws on debt service reserves reflecting financial difficulties; d. Unscheduled draws on credit enhancements reflecting financial difficulties; e. Substitution of credit or liquidity providers, or their failure to perform; f. Adverse tax opinions , the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices of determinations with respect to the tax status of the Bonds, or other material events affecting the tax-exempt status of the Bonds; g. Modifications to the rights of securities holders, if material; h. Bond calls, if material, and tender offers; i. Defeasances; j. The release, substitution, or sale of property securing repayment of the Bonds, if material; k. Rating changes; l. Bankruptcy, insolvency, receivership or similar event of the Issuer; (Note: For the purposes of the event identified in paragraph l, the event is considered to occur when any of the following occur: The appointment of a receiver, fiscal agent or similar officer for the Issuer in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business

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of the Issuer, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Issuer.) m. The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and n. Appointment of a successor or additional trustee or the change of name of a trustee, if material.

The Issuer from time to time may choose to provide notice of the occurrence of certain other events, in addition to those listed above, but the Issuer does not undertake to commit to provide any such notice of the occurrence of any material event except those listed above. 3. The Issuer will provide, in a timely manner to the MSRB notice of a failure to satisfy the requirements of Paragraph 1 herein. 4. The intent of the Issuer’s undertaking in this Continuing Disclosure Certificate is to provide on a continuing basis the information described in the Rule. The provisions of the Continuing Disclosure Certificate may be amended by the Issuer without the consent of, or notice to, any beneficial owners of the Bonds, (a) to comply with or conform to the provisions of the Rule or any amendments thereto or authoritative interpretations thereof by the Securities and Exchange Commission or its staff (whether required or optional), (b) to add a dissemination agent for the information required to be provided by such undertakings and to make any necessary or desirable provisions with respect thereto, (c) to add to the covenants of the Issuer for the benefit of the beneficial owners of the Bonds, (d) to modify the contents, presentation and format of the financial information from time to time as a result of a change in circumstances that arises from a change in legal requirements, or (e) to otherwise modify the undertakings in a manner consistent with the requirements of the Rule concerning continuing disclosure; provided, however, that in the case of any amendment pursuant to clause (d) or (e), (i) the undertaking, as amended, would have complied with the requirements of the Rule at the time of the offering of the Bonds, after taking into account any amendments or authoritative interpretations of the Rule, as well as any change in circumstances, and (ii) the amendment does not materially impair the interests of the beneficial owners of the Bonds, as determined either by a party unaffiliated with the Issuer (such as bond counsel), or by the vote or consent of beneficial owners of a majority in outstanding principal amount of the Bonds affected thereby at or prior to the time of such amendment. Furthermore, to the extent that the Rule, as in effect from time to time, no longer requires the issuers of municipal securities to provide all or any portion of the information the Issuer has agreed to provide pursuant to the Continuing Disclosure Certificate, the obligation of the Issuer to provide such information also shall cease immediately. 5. The purpose of the Issuer’s undertaking is to conform to the requirements of the Rule and, except for creating the right on the part of the beneficial owners of the Bonds, from time to time, to specifically enforce the Issuer’s obligations hereunder, not to create new contractual or other rights for any beneficial owner of the Bonds, any municipal securities broker or dealer, any potential purchaser of the Bonds, the Securities and Exchange Commission or any other person. The sole remedy in the event of any actual or alleged failure by the Issuer to comply with any provision herein shall be an action for the specific performance of the Issuer’s obligations hereunder and not for money damages in any amount. Any failure by the Issuer to comply with any provision of this undertaking shall not constitute an event of default with respect to the Bonds. 6. Unless otherwise required by law, all notices, documents and information provided to the MSRB shall be provided in electronic format as prescribed by the MSRB and shall be accompanied by

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identifying information as prescribed by the MSRB to: http://emma.msrb.org/submission or such other location or address as the MSRB shall require. 7. The Issuer has never failed to comply in any material respect with any previous undertakings in regard to continuing or material events disclosure in connection with the Rule. The Issuer’s Treasurer, or such official’s designee from time to time, shall be the contact person on behalf of the Issuer from whom the foregoing information, data and notices may be obtained. The name, address and telephone number of the initial contact person is: Rick Kusturin, Director of Finance and Operations, Wells-Ogunquit Community School District, 1460 Post Road, Wells, ME 04090, Telephone: (207) 646- 8331or [email protected].

WELLS-OGUNQUIT COMMUNITY SCHOOL DISTRICT

By:______

Its:______Dated: ______, 2014

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