$40,000,000 CATOOSA COUNTY SCHOOL DISTRICT (GEORGIA… · The Bonds are not subject to redemption...

NEW ISSUE RATINGS: Enhanced: Standard & Poor’s “AA+” BOOK-ENTRY ONLY Underlying: Standard & Poor’s “AA-” See “MISCELLANEOUS –Ratings” herein. In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings and judicial decisions, and assuming, among other matters, the accuracy of certain representations and the continued compliance with certain covenants and tax law requirements, interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific tax preference item for purposes of the federal alternative minimum tax on individuals and corporations; however such interest is included in adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. Holders of The Bonds could be subject to the consequences of other provisions of the Internal Revenue Code of 1986, as amended. In the opinion of Bond Counsel, interest on the Bonds is exempt from present State of Georgia income taxation. See Appendix B herein for the form of the opinion Bond Counsel proposes to deliver in connection with the issuance of the Bonds. For a more complete discussion of the tax status of the Bonds and certain other tax consequences relating to the Bonds, see “LEGAL MATTERS -Tax Status” herein.

$40,000,000 CATOOSA COUNTY SCHOOL DISTRICT (GEORGIA)

General Obligation Sales Tax Bonds, Series 2016 Dated: Date of Issuance Due: August 1, as shown on inside cover The CATOOSA COUNTY SCHOOL DISTRICT GENERAL OBLIGATION SALES TAX BONDS, SERIES 2016 (the “Bonds”), will be issued in registered form in the name of Cede & Co., as the nominee for The Depository Trust Company (“DTC”), New York, New York. Individual purchases of the Bonds must be made in book-entry form only in authorized denominations of $5,000 or any integral multiple thereof. Individual purchasers (“Beneficial Owners”) of the Bonds will not receive physical delivery of the Bonds. Transfers of the Bonds will be effected through a book-entry system as described herein. Interest on the Bonds will be payable on February 1 and August 1 of each year (each an “Interest Payment Date”) beginning February 1, 2017. So long as Cede & Co., or such other nominee as may be requested by an authorized representative of DTC, is the registered owner of the Bonds, disbursements of payments of principal of and interest on the Bonds to Cede & Co. is the responsibility of Regions Bank, Atlanta, Georgia, as Paying Agent; disbursements of such payments to DTC Participants is the responsibility of DTC; and disbursements of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants as more fully described herein. See “THE BONDS -Book-Entry Only System of Delivery of the Bonds” herein. The Bonds are being issued to provide funds, together with other available funds of the Catoosa County School District (the “School District”), to finance the costs of acquiring, constructing, and equipping certain capital outlay projects of the School District and the costs of issuance of the Bonds, including capitalized interest. See “THE BONDS -Estimated Sources and Uses of Funds; -The Projects” herein. The Bonds are not subject to redemption prior to maturity. The Bonds are general obligations of the School District. Principal of and interest on the Bonds are payable first from the receipts of a special one percent (1%) sales and use tax for educational purposes (the “Educational Sales Tax”, for a period of time not to exceed 20 calendar quarters. The School District reasonably expects that such receipts will be sufficient to pay all debt service on the Bonds. Nevertheless, if such receipts are insufficient, debt service on the Bonds will be paid, to the extent necessary, from the general fund of the School District or from an ad valorem tax to be levied, without limitation as to rate or amount, upon all property in the School District subject to taxation for school bond purposes. Prior to the issuance of the Bonds, the Board of Commissioners of Catoosa County, upon recommendation of the School District, will provide for the assessment and collection of an ad valorem tax on all property in the School District subject to taxation for school bond purposes, which, together with the Educational Sales Tax, will be sufficient to pay the principal of and interest on the Bonds as they become due and payable. As additional security for the Bonds, the School District will participate in the State of Georgia Intercept Program. THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THE BONDS OR THE SECURITY THEREFOR. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. The Bonds are offered when, as and if issued by the School District, subject to the approval of legality by Gray Pannell & Woodward LLP, Savannah, Georgia, Bond Counsel. Certain legal matters will be passed upon for the School District by its counsel, Wiggins Law Office, Ringgold, Georgia. Davenport & Company LLC, Woodstock, Georgia, is serving as Financial Advisor. Gray Pannell & Woodward LLP, Savannah, Georgia, is serving as Disclosure Counsel. The Bonds are expected to be delivered in definitive form through DTC in New York, New York on or about August 24, 2016.

Official Statement dated: July 26, 2016.

MATURITY SCHEDULE

$40,000,000 CATOOSA COUNTY SCHOOL DISTRICT (GEORGIA)

GENERAL OBLIGATION SALES TAX BONDS, SERIES 2016

Maturity Principal Amount Interest Rate Yield CUSIP1

2018 $7,220,000 5.000% 0.640% 149278AL7 2019 7,590,000 5.000 0.720 149278AM5 2020 7,980,000 5.000 0.820 149278AN3 2021 8,390,000 5.000 0.940 149278AP8 2022 8,820,000 5.000 1.100 149278AQ6

____________ 1 CUSIP numbers have been assigned by an organization not affiliated with the School District and are included for the

convenience of the holders of the Bonds. The School District is not responsible for the selection or uses of these CUSIP numbers, nor is any representation made as to their accuracy on the Bonds, as indicated above

CATOOSA COUNTY SCHOOL DISTRICT Elected Officials

Board of Education of Catoosa County Don Dycus, Chairman

David Moeller, Vice-Chair Melvin Edwards

Gloria Hunt Jack Simms

Appointed Officials

Denia D. Reese, Superintendent Dr. Kim Nichols, Assistant Superintendent

SPECIAL SERVICES

Auditors

State of Georgia Department of Audits Atlanta, Georgia

Attorney to the School District

Wiggins Law Office Ringgold, Georgia

Bond Counsel & Disclosure Counsel

Gray Pannell & Woodward LLP Savannah, Georgia

Financial Advisor

Davenport & Company LLC Woodstock, Georgia

Underwriter

J.P. Morgan Securities, LLC New York, New York

TABLE OF CONTENTS Page INTRODUCTION ........................................................................................................................................ 1 The School District ....................................................................................................................................... 1 Security and Sources of Payment for the Bonds ........................................................................................... 1 Purpose of the Bonds .................................................................................................................................... 1 Bond Registrar and Paying Agent ................................................................................................................. 2 Description of the Bonds .............................................................................................................................. 2 Tax Status ..................................................................................................................................................... 2 Professionals Involved in the Offering ......................................................................................................... 3 Terms of the Offering ................................................................................................................................... 3 Continuing Disclosure .................................................................................................................................. 3 Additional Information ................................................................................................................................. 3 THE BONDS ................................................................................................................................................ 4 Description .................................................................................................................................................... 4 Redemption .................................................................................................................................................. 4 Book-Entry Only Systems of Delivery of Bonds ......................................................................................... 4 Authority for Issuance of the Bonds ............................................................................................................. 6 Validation of the Bonds ................................................................................................................................ 7 Estimated Sources and Uses of Funds .......................................................................................................... 7 The Projects .................................................................................................................................................. 7 Investment of Money .................................................................................................................................... 9 Construction Fund Disbursements .............................................................................................................. 11 Change of Use of Bond Proceeds ............................................................................................................... 12 Security and Sources of Payment for the Bonds ......................................................................................... 12 Security from Ad Valorem Taxation .......................................................................................................... 12 Security from Educational Sales Tax .......................................................................................................... 12 Historical Educational Sales Tax Data ........................................................................................................ 14 Additional Security Provided by State of Georgia Intercept Program ........................................................ 14 Enforcement of Remedies ........................................................................................................................... 15 THE SCHOOL DISTRICT ......................................................................................................................... 16 Introduction ................................................................................................................................................. 16 Board of Education ..................................................................................................................................... 16 Administration ............................................................................................................................................ 16 Operations ................................................................................................................................................... 17 Employees, Employee Relations, and Labor Organizations ....................................................................... 18 Enrollment .................................................................................................................................................. 18 Schools, 2015-2016 School Term ............................................................................................................... 18 DEBT STRUCTURE OF THE SCHOOL DISTRICT ............................................................................... 20 Summary of School District Debt by Category .......................................................................................... 20 Indebtedness of Overlapping Governmental Entities ................................................................................. 20 Debt Limitation ........................................................................................................................................... 21 Long and Short-Term Indebtedness ............................................................................................................ 21 Debt Service Schedule ................................................................................................................................ 22 SCHOOL DISTRICT AD VALOREM TAXATION................................................................................. 23 Introduction ................................................................................................................................................. 23

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Page Property Subject to Taxation ...................................................................................................................... 23 Tax Relief Initiatives ................................................................................................................................... 23 Assessed Value ........................................................................................................................................... 25 Annual Tax Levy ........................................................................................................................................ 26 Property Tax Collections ............................................................................................................................ 26 M&O Tax Digest ........................................................................................................................................ 27 Ten Largest Taxpayers ................................................................................................................................ 28 M&O Tax Levies and Collections .............................................................................................................. 29 Millage Rates .............................................................................................................................................. 30 SCHOOL DISTRICT FINANCIAL INFORMATION .............................................................................. 31 Five-Year General Fund History................................................................................................................. 31 Accounting Policies .................................................................................................................................... 33 Budgetary Process for General Fund .......................................................................................................... 34 Employee Pension Plan ............................................................................................................................... 35 Other Employee Benefits ............................................................................................................................ 36 Governmental Immunity and Insurance Coverage ..................................................................................... 36 CATOOSA COUNTY ................................................................................................................................ 38 Introduction ................................................................................................................................................. 38 Government Format .................................................................................................................................... 38 Government Services and Facilities ............................................................................................................ 38 Population Information ............................................................................................................................... 39 Per Capita Personal Income ........................................................................................................................ 39 Bank Deposits ............................................................................................................................................. 40 Industry and Employment ........................................................................................................................... 40 LEGAL MATTERS .................................................................................................................................... 42 Litigation ..................................................................................................................................................... 42 Legal Proceedings ....................................................................................................................................... 42 Tax Status ................................................................................................................................................... 42 MISCELLANEOUS ................................................................................................................................... 46 Rating .......................................................................................................................................................... 46 Underwriting ............................................................................................................................................... 46 Financial Advisor ........................................................................................................................................ 46 Continuing Disclosure ................................................................................................................................ 46 Financial Statements ................................................................................................................................... 47 Miscellaneous ............................................................................................................................................. 48 Certification ................................................................................................................................................ 48 Appendix A: FINANCIAL STATEMENTS OF THE CATOOSA COUNTY SCHOOL DISTRICT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Appendix B: PROPOSED FORM OF LEGAL OPINION OF BOND COUNSEL Appendix C: FORM OF THE CONTINUING DISCLOSURE CERTIFICATE

No dealer, broker, salesman or other person has been authorized by the School District or J.P.

Morgan Securities, LLC (the “Underwriter”), or any other person to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other

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information or representation must not be relied upon as having been authorized by the School District, the Underwriter, or any other person. Except where otherwise indicated, all information contained in this Official Statement has been provided by the School District. Sources other than the School District are believed to be reliable, but are not guaranteed as to accuracy or completeness by the School District or the Underwriter. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. 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 create, under any circumstances, any implication that there has been no change in any of the information set forth herein since the date hereof or the earlier dates set forth herein as of which certain information contained herein is given.

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 Bonds have not been registered under the Securities Act of 1933, and the Resolution (defined herein) has not been qualified under the Trust Indenture Act of 1939, in reliance on exemptions contained in such Acts.

NO REGISTRATION STATEMENT RELATING TO THE BONDS HAS BEEN FILED WITH

THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) OR ANY STATE SECURITIES AGENCY. THE BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES AGENCY. NEITHER THE SEC NOR ANY STATE SECURITIES AGENCY HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT.

OFFICIAL STATEMENT Relating to $40,000,000 CATOOSA COUNTY SCHOOL DISTRICT (GEORGIA)

GENERAL OBLIGATION SALES TAX BONDS, SERIES 2016 INTRODUCTION The purpose of this Official Statement, which includes the cover page and the appendices hereto, is to furnish information with respect to the proposed issuance and sale by the Catoosa County School District (the “School District”) of its CATOOSA COUNTY SCHOOL DISTRICT GENERAL OBLIGATION

SALES TAX BONDS, SERIES 2016 (the “Bonds”). The information contained in this section entitled “INTRODUCTION” is a brief description of the terms of and security for the Bonds and does not purport to be comprehensive or definitive. A full review of the entire Official Statement, as well as the documents summarized or described herein, should be made. All undefined, capitalized terms used herein shall have the meaning ascribed to such terms in the Resolution (as defined herein) unless the context requires otherwise. The School District The School District is a political subdivision of the State of Georgia (the “State”). The affairs of the School District are managed by the Board of Education of Catoosa County (the “Board of Education”). The School District is coextensive with the territorial limits of Catoosa County (the “County”), which is located in northwest Georgia, approximately 100 miles north of Atlanta, Georgia and 18 miles south of Chattanooga, Tennessee. For more detailed information, see “THE SCHOOL DISTRICT.” Security and Sources of Payment for the Bonds The Bonds are general obligations of the School District and will constitute a pledge of the full faith and credit of the School District. Principal of and interest on the Bonds are payable first from the receipts of a special one percent (1%) sales and use tax for educational purposes (the “Educational Sales Tax”) collected within the territorial limits of the School District, and then, if and to the extent necessary, from ad valorem taxes which may be levied, without limitation as to rate or amount, upon all taxable property subject to taxation for school bond purposes within the territorial limits of the School District. Prior to the issuance of the Bonds, the Board of Commissioners of Catoosa County will provide for the assessment and collection of an ad valorem tax within the School District in an amount which, together with the Educational Sales Tax collections, will be sufficient to pay the principal of and interest on the Bonds as they become due and payable. As additional security for the Bonds, the School District will participate in the State of Georgia Intercept Program. For more detailed information, see “THE BONDS -Security and Sources of Payment for the Bonds” and “SCHOOL DISTRICT AD VALOREM TAXATION.” Purpose of the Bonds The Bonds are being issued to provide funds to finance the cost, in whole or in part, of acquiring, constructing, and equipping certain capital outlay projects of the School District (the “Projects”) and the

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costs of issuance of the Bonds, including capitalized interest. For more detailed information, see “THE BONDS-Estimated Sources and Uses of Funds” and “THE BONDS -The Projects.” Bond Registrar and Paying Agent Regions Bank, Atlanta, Georgia, will act as Bond Registrar (“Bond Registrar”) and Paying Agent (“Paying Agent”) for the Bonds. Description of the Bonds Redemption. The Bonds are not subject to redemption by the School District prior to their respective maturities. Denominations. The Bonds will be issued in the denomination of $5,000 or any integral multiple thereof. Registration and Transfer. The Bonds will be registered in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. Manner of Making Payments. Interest on the Bonds is payable on February 1 and August 1 of each year (each an “Interest Payment Date”), beginning February 1, 2017. The interest so payable on any such Interest Payment Date will be paid to the person in whose name the Bonds are registered at the close of business on the 15th day of the calendar month preceding such Interest Payment Date (the “Record Date”); provided, however, that if and to the extent a default shall occur in the payment of interest due on said Interest Payment Date, such past due interest shall be paid to the persons in whose names outstanding Bonds are registered on a subsequent date of record established by notice given by mail by the Paying Agent (as defined herein) to the holders of the Bonds not less than 30 days preceding such subsequent date of record. The Bonds bear interest at the rates per annum and mature in the amounts and at the times as set forth on the front cover page hereof. So long as DTC or its nominee is the registered owner of the Bonds, principal of and interest on the Bonds are payable by wire transfer by the Paying Agent to Cede & Co., as nominee for DTC which, in turn, will remit such amounts to DTC Participants (as defined herein) for subsequent disbursement to the Beneficial Owners (as defined herein). For more detailed information on the Bonds, see “THE BONDS.” Tax Status In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings and judicial decisions, and assuming, among other matters, the accuracy of certain representations and the continued compliance with certain covenants and tax law requirements, interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific tax preference item for purposes of the federal alternative minimum tax on individuals and corporations; however such interest is included in adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. Holders of The Bonds could be subject to the consequences of other provisions of the Internal Revenue Code of 1986, as amended. In the opinion of Bond Counsel, interest on the Bonds is exempt from present State of Georgia income taxation. See Appendix B herein for the form of the opinion Bond Counsel proposes to deliver in connection with the issuance of the Bonds.

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For a more complete discussion of the tax status of the Bonds and certain other tax consequences relating to the Bonds, see “LEGAL MATTERS -Tax Status” herein.

Professionals Involved in the Offering Certain legal matters pertaining to the School District and its authorization and issuance of the Bonds are subject to the approving opinion of Gray Pannell & Woodward LLP, Savannah, Georgia, Bond Counsel. See Appendix B for the proposed form of opinion of Bond Counsel to be delivered in connection with the issuance of the Bonds. Certain legal matters will be passed upon for the School District by its counsel, Wiggins Law Office, Ringgold, Georgia. The general purpose financial statements of the School District as of June 30, 2015 and for the year then ended, attached hereto as Appendix A, have been audited by the State of Georgia Department of Audits, Atlanta, Georgia, to the extent and for the period indicated in its report thereon which appears in Appendix A hereto. Terms of the Offering Authority for Issuance. The Bonds are to be issued under authority of the Constitution of the State of Georgia, the general laws of the State of Georgia, and a bond resolution adopted by the Board of Education on July 28, 2016 (the “Resolution”). The issuance of the Bonds was approved by a majority of the votes cast in Catoosa County in the Educational Sales Tax and general obligation bond election held on March 1, 2016. Offering. The Bonds are offered when, as, and if issued by the School District and accepted by J.P. Morgan Securities, LLC (the “Underwriter”), subject to prior sale and to withdrawal or modification of the offer without notice, to approval of legality by Gray Pannell & Woodward LLP, Bond Counsel. Delivery. The Bonds in definitive form are expected to be delivered through DTC in New York, New York on or about August 24, 2016. Continuing Disclosure The Board of Education will sign a Continuing Disclosure Certificate on the date of the sale of the Bonds, which will allow the Underwriter of the Bonds to comply with Securities and Exchange Commission Rule 15c2-12(b)(5). See “MISCELLANEOUS -Continuing Disclosure” and “Appendix C: FORM OF THE CONTINUING DISCLOSURE CERTIFICATE.” Additional Information This Official Statement and the Appendices hereto contain brief descriptions of, among other matters, the School District, the Bonds, the Resolution, and the security and sources of payment for the Bonds. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to, or summaries of, the Resolution or any other document or any constitutional provision or statute are qualified in their entirety by the exact terms of such documents or constitutional provision or statute. All references herein to, or summaries of, the Bonds are qualified in their entirety by the definitive form thereof and the provisions with respect thereto included in the Resolution. Copies of all documents described herein are available upon request, upon payment to the Board of Education of a charge for copying, mailing and handling, from the Board of Education of Catoosa County, 307 Cleveland Street, PO Box 130, Ringgold, Georgia 30736, telephone (706) 965-2297. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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THE BONDS Description The Bonds, dated as of the date of issuance and delivery thereof, will bear interest at the rates per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months, and mature on August 1 in the years and amounts, set forth on the cover page hereof. Interest shall be payable on February 1 and August 1 of each year beginning February 1, 2017. Redemption The Bonds are not subject to redemption prior to maturity. Book-Entry Only System of Delivery of Bonds DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee), or such other name as may be requested by an authorized representative of DTC. One fully-registered bond certificate will be issued for each maturity of the Bonds in the principal amount of such maturity, and will be deposited with DTC. DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 85 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, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. 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 Standard & Poor’s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (a “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 confirmation providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the

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Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co, or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co., or such other DTC nominee, do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bond are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, defaults, and proposed amendments to the documents pertaining to the Bonds. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Bond Registrar and request that copies of notices be provided directly to them. Redemption notices will be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the 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 Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy). Payments with respect to the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the School District or the 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 Paying Agent, or the School District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments with respect to the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Paying Agent or the School District, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursements of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

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DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the School District or the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered. The School District may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered to DTC. The foregoing information concerning DTC and its book-entry system has been obtained from DTC. The School District and the Underwriter do not make any representation or warranty or take any responsibility for the accuracy or completeness of such information. SO LONG AS CEDE & CO. OR SUCH OTHER DTC NOMINEE, AS NOMINEE FOR DTC, IS THE SOLE

BONDHOLDER, THE SCHOOL DISTRICT AND THE BOND REGISTRAR WILL TREAT CEDE & CO. OR SUCH

OTHER NOMINEE AS THE ONLY OWNER OF THE BONDS FOR ALL PURPOSES UNDER THE RESOLUTION, INCLUDING RECEIPT OF ALL PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THE BONDS, RECEIPT

OF NOTICES, VOTING, AND REQUESTING OR DIRECTING THE SCHOOL DISTRICT OR THE PAYING AGENT TO

TAKE OR NOT TO TAKE, OR CONSENTING TO, CERTAIN ACTIONS UNDER THE RESOLUTION. THE SCHOOL

DISTRICT HAS NO RESPONSIBILITY OR OBLIGATION TO THE DIRECT OR INDIRECT PARTICIPANTS OR THE

BENEFICIAL OWNERS WITH RESPECT TO (A) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR

ANY DIRECT OR INDIRECT PARTICIPANT; (B) THE PAYMENT OR ANY DIRECT OR INDIRECT PARTICIPANT OF

ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THE BONDS; (C) THE DELIVERY OR TIMELINESS OF DELIVERY BY ANY DIRECT OR

INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED

UNDER THE TERMS OF THE RESOLUTION TO BE GIVEN TO BONDHOLDERS; OR (D) OTHER ACTION TAKEN BY

DTC OR CEDE & CO. OR SUCH OTHER DTC NOMINEE, AS OWNER. Beneficial Owners of the Bonds may experience some delay in their receipt of distributions of principal and interest on the Bonds since such distributions will be forwarded by the Paying Agent to DTC, and DTC will credit such distributions to the accounts of Direct Participants which will thereafter credit them to the accounts of Beneficial Owners either directly or indirectly through Indirect Participants. Authority for Issuance of the Bonds The Board of Education adopted a resolution on November 3, 2015, imposing the Educational Sales Tax within Catoosa County and authorizing the issuance of general obligation debt of the School District in the maximum principal amount of $49,000,000, conditioned upon approval by a majority of the qualified voters residing within Catoosa County voting in an election thereon called for March 1, 2016 (the “Election”). The resolution of November 3, 2015, calling the Election and the notice of Election stipulated an interest rate for the Bonds not exceeding seven percent (7.0%) per annum. The Election was held in accordance with Article 14 of Chapter 2 of Title 21 of Official Code of Georgia Annotated (“O.C.G.A.”). The canvass of the Election showed 8,390 “Yes” votes and 4,581 “No” votes, a 64.68% approval by those who voted in the Election. Subsequent to such approval, the Board of Education adopted the Resolution authorizing and regulating the issuance of the Bonds. The Bonds are being issued pursuant to the authority granted by (i) the Constitution of the State of Georgia, particularly Article VIII, Section VI, Paragraph IV of the Constitution, (ii) the general laws of the State of Georgia, particularly the Sales Tax for Educational Purposes, codified in O.C.G.A. §§ 48-8-140, et seq., (iii) the results of the Election, and (iv) the Resolution.

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Validation of the Bonds On May 18, 2016, the Superior Court of Catoosa County confirmed and validated the general obligation debt of the School District authorized to be issued pursuant to the results of the Election in the maximum aggregate principal amount of $49,000,000, and the security therefor, in accordance with the procedures of Article 2 of Chapter 82 of Title 36 of Official Code of Georgia Annotated. Estimated Sources and Uses of Funds

Sources of Funds: Proceeds from Sale of Bonds1 ........................................................................ $46,446,498.70 Total: .............................................................................................................. $46,446,498.70 Uses of Funds: Costs of Projects2 ........................................................................................... $44,095,388.48 Capitalized Interest ........................................................................................ 1,872,222.22 Costs of Issuance3 .......................................................................................... 478,888.00 Total: .............................................................................................................. $46,446,498.70 ______________ 1 Includes original issue premium of $6,446,498.70. 2 See “THE BONDS -The Projects.” 3 Includes Underwriter’s Discount and expenses, estimated legal and accounting fees, printing costs,

validation court costs, rating agency fees, and other fees and expenses associated with the issuance of the Bonds.

Concurrently with the issuance and delivery of the Bonds, the Underwriter’s Discount shall be

paid, all costs and expenses in connection with the issuance and sale of the Bonds, including without limitation the fees and expenses of accountants, attorneys, and the cost of printing, validation fees, and other miscellaneous fees and expenses shall be paid to those persons entitled to receive the same, and the balance of the proceeds from the sale of the Bonds shall be deposited in the CATOOSA COUNTY SCHOOL

DISTRICT GENERAL OBLIGATION SALES TAX BONDS, SERIES 2016 CONSTRUCTION FUND (the “Construction Fund”), created by the Board of Education pursuant to the terms of the Resolution.

The Projects Description of the Projects. The proceeds from the sale of the Bonds will fund in part the following capital outlay projects: acquiring, adding-on, constructing, installing, painting, refurbishing and replacing existing buildings, classrooms, ceilings, flooring, walls, hallways, roofs, lunchrooms, media centers, loading areas, stages, specialty rooms, windows, restrooms, gyms, sporting fields and complexes, playground equipment, parking lots, sidewalks, water and sewage systems and components, HVAC systems and components, piping and ductwork; acquiring, replacing and/or refreshing instructional and technological materials and devices, including but not limited to textbooks, student learning and student response devices, smartboards, projector/projection devices, scanners, e-books, printers, screens, teaching devices and systems, wired and wireless electronic devices, internet books, charging stations or carts, software and licenses, desktop computers, laptop and tablet computers, intercoms, phones systems, servers, fiber-optics, wireless access points, networks, as well as acquiring the component or non-component infrastructure or accessories reasonable or necessary to accommodate the use of such

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materials and devices; acquiring safety and security materials and devices in the attempt to secure the safety of students, employees and property, including locks, still and video cameras, alarms, door jam security devices, door replacements, security doors, sprinklers, sensors, re-keying of locks, and medically-related devices or items; acquiring tools, machines and heavy equipment, as well as apparatus for the purpose of installing, repairing, refurbishing or manufacturing capital improvements funded from this and prior capital expenditures; repairing, refurbishing, remodeling or renovating existing schools or structures owned or operated by the school district; acquiring land and buildings for schools, school campuses, maintenance facilities, training, and sports fields and facilities; acquiring, constructing and installing, erecting, lighting, paving, signage, fencing, grading, clearing, dozing, or otherwise improvements of real property by new interior and new exterior construction at new and existing school premises or structures operated by the school district; acquiring or purchasing of motor vehicles, busses, vans, or other transportation apparatus, as well as equipment to enhance, improve or repair such apparatus; purchasing and replacing furniture, kitchen equipment and machines, sinks, lab equipment, cabinetry, electronic equipment or communication devices, electronic systems, and other educationally-related or construction-related personalty; acquiring, constructing or improving covers, bleachers, tracks, sports fields and courts, facilities which will be jointly used for instructional sports and physical education, accessory buildings, drive-under canopies for all purposes and other energy-efficient or weather-protective structures or improvements to install or store instructional materials, instructional machines or devices, construction tools, construction machinery, or other sporting personalty, and paying for the expenses incident to accomplish the foregoing purposes (collectively, the “Projects”). The Board of Education will require contractors engaged in the construction of the Projects to obtain performance and payment bonds, a certificate of insurance for general liability, a certificate of insurance for workers’ compensation, a certificate of insurance for automobile liability and excess liability, and evidence of property insurance for builder’s risk.

The Board of Education has selected Derthick, Henley, and Wilkerson, Architects, Chattanooga, Tennessee, to serve as the design and inspecting architect for the Projects. After the architect completes and the Board of Education approves a set of plans and specifications for the Projects, the School District will submit the plans and specifications to the State of Georgia Department of Education for approval. After the plans and specifications are approved by the State of Georgia Department of Education, it is anticipated that the Projects will be advertised for bids from general contractors on the School District website and in construction publications. After the advertisements have run for 28 days, the School District will award the construction contract to the low bidder.

The Board of Education anticipates that all Projects financed with proceeds from the sale of the Bonds will be completed no later than June 30, 2021. Although the Board of Education believes that it can achieve this schedule, unforeseen circumstances can occur, which may delay completion of the Projects.

Plan of Financing. The School District has developed a plan to finance the Projects with proceeds from the sale of the Bonds and investment earnings thereon, proceeds of the Educational Sales Tax above the amount required for payment of principal of and interest on the Bonds, together with investment earnings thereon, and funds earned through the State capital outlay program administered by the Georgia Department of Education, the aggregate amount of which is expected to be sufficient to provide funding for the Projects. See “THE BONDS, -Estimated Sources and Uses of Funds” herein.

The Georgia Department of Education disburses capital outlay earnings to the School District as the School District incurs capital expenditures if certain requirements are met. Currently, the School District has four planned projects that will qualify for partial reimbursement under the State capital outlay program.

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Investment of Money Construction Fund Money. The money in the Construction Fund will be held by Branch Banking and Trust Company as the Construction Fund Depository (the “Construction Fund Depository”) and will be disbursed by the Construction Fund Depository to pay the costs of the Projects. Money in the Construction Fund which are not needed at the time to pay current obligations during the construction and equipping of the Projects may be invested, upon direction to the Construction Fund Depository from the Board of Education, in any of the following investments allowed by O.C.G.A. § 36-82-7, and no others: (a) Investments and reinvestments in the local government investment pool created in O.C.G.A. § 36-83-8; or (b) Investment in the following securities and no others:

(1) Bonds or other obligations of the issuer, or bonds or obligations of the State of Georgia or other states or other counties, municipal corporations, and political subdivisions of the State of Georgia;

(2) Bonds or other obligations of the United States or of subsidiary corporations of the

United States government, which are fully guaranteed by such government; (3) Obligations of and obligations guaranteed by agencies or instrumentalities of the

United States government, including those issued by the Federal Land Bank, Federal Home Loan Bank, Federal Intermediate Credit Bank, Bank for Cooperatives, and any other such agency or instrumentality now or hereafter in existence; provided, however, that all such obligations shall have a current credit rating from a nationally recognized rating service of at least one of the three highest rating categories available and have a nationally recognized market;

(4) Bonds or other obligations issued by any public housing agency or municipal

corporation in the United States, which such bonds or obligations are fully secured as to payment of both principal and interest by a pledge of annual contributions under an annual contributions contract or contracts with the United States government, or project notes issued by any public housing agency, urban renewal agency or municipal corporation in the United States which are fully secured as to payment of both principal and interest by a requisition, loan or payment agreement with the United States government;

(5) Certificates of deposit of national or state banks located within the State of Georgia

which have deposits insured by the Federal Deposit Insurance Corporation and certificates of deposit of federal savings and loan associations and state building and loan or savings and loan associations located within the State of Georgia which have deposits insured by the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation or the Georgia Credit Union Deposit Insurance Corporation, including the certificates of deposit of any bank, savings and loan association, or building and loan association acting as depository, custodian or trustee for any proceeds of the Bonds; provided, however, that the portion of such certificates of deposit in excess of the amount insured by the Federal Deposit Insurance Corporation, the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation, or the Georgia Credit Union Deposit Insurance Corporation, if any, shall be secured by deposit with the Federal Reserve Bank of Atlanta, Georgia, or with any national or state bank or federal savings and loan association or state building and loan or savings and loan association located within the State of Georgia or with a trust office within the State of Georgia, of one or more of the following securities in an aggregate principal amount equal at least to the amount of such excess: direct and

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general obligations of the State of Georgia or other states or any county or municipal corporation in the State of Georgia, obligations of the United States or subsidiary corporations included in paragraph (2) above, obligations of the agencies and instrumentalities of the United States government included in paragraph (3) above, or bonds, obligations, or project notes of public housing agencies, urban renewal agencies, or municipalities included in paragraph (4) above;

(6) Securities of or other interests in any no-load, open-end management type investment

company or investment trust registered under the Investment Company Act of 1940, as from time to time amended, or any common trust fund maintained by any bank or trust company which holds such proceeds as trustee or by an affiliate thereof so long as:

(A) the portfolio of such investment company or investment trust or common trust

fund is limited to the obligations referenced in paragraphs (2) and (3) above and repurchase agreements fully collateralized by any such obligations;

(B) such investment company or investment trust or common trust fund takes

delivery of such collateral either directly or through an authorized custodian; (C) such investment company or investment trust or common trust fund is managed

so as to maintain its shares at a constant net asset value; and (D) securities of or other interests in such investment company or investment trust or

common trust fund are purchased and redeemed only through the use of national or state banks having corporate trust powers and located within the State of Georgia; and

(7) Interest-bearing time deposits, repurchase agreements, reverse repurchase

agreements, rate guarantee agreements, or other similar banking arrangements with a bank or trust company having capital and surplus aggregating at least $50 million or with any government bond dealer reporting to, trading with, and recognized as a primary dealer by the Federal Reserve Bank of New York having capital aggregating at least $50 million or with any corporation which is subject to registration with the Board of Governors of the Federal Reserve System pursuant to the requirements of the Bank Holding Company Act of 1956, provided that each such interest-bearing time deposit, repurchase agreement, reverse repurchase agreement, rate guarantee agreement, or other similar banking arrangement shall permit the money so placed to be available for use at the time provided with respect to the investment or reinvestment of such money.

Other Money.

(a) Pursuant to the Resolution it is authorized to be established, prior to or concurrently with the issuance and delivery of the Bonds, two special accounts designated the CATOOSA COUNTY SCHOOL

DISTRICT GENERAL OBLIGATION SALES TAX BONDS, SERIES 2016 DEBT SERVICE ACCOUNT (the “Debt Service Account”) and the CATOOSA COUNTY SCHOOL DISTRICT GENERAL OBLIGATION SALES TAX

BONDS, SERIES 2016 PROJECTS ACCOUNT (the “Projects Account”). Money in each of said accounts shall be held and kept separate and apart from all other funds of the School District and shall not in any manner be commingled with other funds of the School District. The Debt Service Account and the Projects Account will be maintained and held in trust by the School District with the custodian of each of said accounts and the owners of the Bonds shall have a beneficial interest therein.

Money in the Debt Service Account and the Projects Account shall be invested pursuant to O.C.G.A. § 36-80-3 and O.C.G.A. § 36-83-4.

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O.C.G.A. § 36-80-3 provides that the governing body of the School District, or the financial officer of the School District to whom investment authority is delegated pursuant to O.C.G.A. § 36-80-4, in addition to other legal investments, may invest and reinvest money subject to its control and jurisdiction in:

(a) obligations of the United States and of its agencies and instrumentalities, or obligations fully insured or guaranteed by the United States government or by one of its agencies;

(b) bonds or certificates of indebtedness of the State of Georgia and of its agencies and instrumentalities; and

(c) certificates of deposit of banks which have deposits insured by the Federal Deposit Insurance Corporation (“FDIC”); provided, however, that portion of such certificates of deposit in excess of the amount insured by the FDIC must be secured by direct obligations of the State of Georgia or the United States which are of a par value equal to that portion of such certificates of deposit which would be uninsured.

O.C.G.A. § 36-83-4 provides that the governing body of the School District, or the financial officer of the School District to whom investment authority is delegated, may invest and reinvest money subject to its control and jurisdiction in:

(a) obligations of the State of Georgia or of other states;

(b) obligations issued by the United States government;

(c) obligations fully insured or guaranteed by the United States government or by one of its agencies;

(d) obligations of any corporation of the United States government;

(e) prime bankers’ acceptances;

(f) the local government investment pool established by O.C.G.A. § 36-83-8;

(g) repurchase agreements; and

(h) obligations of other political subdivisions of the State of Georgia.

Construction Fund Disbursements Disbursements from the Construction Fund shall be made only upon the execution and filing with the Board of Education of a requisition and certificate signed by the project superintendent (the person or persons typically the school superintendent or chief financial officer of the School District so designated by the Board of Education) certifying (i) the amount to be paid and the name of the person, firm or corporation to whom payment is due, (ii) that an obligation has been incurred by the Board of Education, that the same is a proper charge and has not been paid, and that the project superintendent has a copy of the invoice for the obligation, (iii) that the project superintendent has no notice of any liens or rights to liens which should be satisfied before such payment is made, (iv) that such requisition contains no item representing retained percentages which the Board of Education is entitled to retain, and (v) that the materials, supplies or equipment invoiced were actually installed in or about the construction site or delivered at the site for that purpose.

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Change of Use of Bond Proceeds O.C.G.A § 36-82-4.2 allows the Board of Education, subsequent to the issuance of the Bonds, to expend the proceeds of the Bonds, including interest earnings thereon, for purposes of a nature substantially similar to the purpose stated in the election notice or to reduce the bonded indebtedness of the School District, provided certain conditions are met. First, the Board of Education must adopt a resolution by a two-thirds majority vote declaring that (1) a portion of the proceeds of the Bonds remains after the purpose stated in the election notice has been accomplished, (2) the purpose stated in the election notice is no longer necessary, or (3) circumstances have changed such that expenditure of all or part of the proceeds of the Bonds is no longer practicable or feasible and setting forth the reason the proceeds of the Bonds were not expended for the purpose stated in the election notice and stating the purpose for which the proceeds of the Bonds will be expended. Second, the Board of Education, not earlier than ten days prior to expending such Bond proceeds, must publish the resolution described above once in the official Catoosa County newspaper. In addition, a copy of the resolution described above must be sent by registered or certified mail to the Paying Agent for the Bonds. Security and Sources of Payment for the Bonds Security from Ad Valorem Taxation. The Bonds will constitute general obligation debt of the School District within the meaning of Article IX, Section V, Paragraph I of the Constitution of Georgia and shall count against the limitation on debt contained therein. See “DEBT STRUCTURE OF THE SCHOOL DISTRICT -Debt Limitation.” Said limitation requires that the debt of the School District shall never exceed 10% of the assessed value of taxable property within the territorial limits of the School District. Any liability on such debt which is not satisfied from the proceeds of the Educational Sales Tax shall be satisfied from the general fund of the School District, in which event the principal of and interest on the Bonds will be payable from ad valorem taxes levied, without limitation as to rate or amount, upon all taxable property within the School District which is subject to taxation for school bond purposes, in an amount sufficient to pay the principal of and interest on the Bonds. Prior to the issuance of the Bonds, the Board of Commissioners of Catoosa County, upon the recommendation of the Board of Education, as required by Article IX, Section V, Paragraph VI of the Constitution of Georgia, will provide for the assessment and collection of an ad valorem tax on all taxable property within the territorial limits of the School District subject to taxation for school bond purposes in an amount, which, together with the Educational Sales Tax collections, will be sufficient to pay the principal of and interest on the Bonds as the same become due and payable. The proceeds of the ad valorem tax assessed to pay the principal of and interest on the Bonds, together with any other money collected for such purpose, shall be placed, pursuant to Article IX, Section V, Paragraph VI of the Constitution of the State of Georgia, in a sinking fund to be used exclusively for paying the principal of and interest on the Bonds. Such money shall be held and kept separate and apart from all other revenues collected by the School District. Security from Educational Sales Tax. Payment of the principal of and interest on the Bonds will be secured by, and will be first payable from, the Educational Sales Tax. Said tax will be levied in Catoosa County at the rate of 1% for a period of time not to exceed five years, beginning upon the termination of the sales and use tax for educational purposes presently in effect, which is anticipated to cease to be collected on June 30, 2017. The Educational Sales Tax will be used for the purpose of paying the principal of and interest on the Bonds and may be used to pay certain costs of the Projects. The School District has pledged its total receipts of the Educational Sales Tax to the payment of the Bonds, and, pursuant to the Resolution, will cause the proceeds of the Educational Sales Tax received by it to be deposited to the Debt Service Account. The Board of Education has covenanted to pay to the

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Paying Agent on or before each Interest Payment Date, amounts sufficient to pay the interest, or principal and interest, on the Bonds on such dates. The Board of Education estimates that the receipts of the Educational Sales Tax will be sufficient to meet debt service requirements on the Bonds. All funds provided by the Educational Sales Tax and any amount required from any ad valorem tax levied and collected for payment of the Bonds are pledged irrevocably to and appropriated for the payment of the principal of and interest on the Bonds so that all of the Bonds, as to both principal and interest, shall be fully paid as the same mature and become due. The costs of the Projects may be paid from proceeds of the Educational Sales Tax and not from proceeds of the Bonds; provided, however, that no part of the proceeds from the Educational Sales Tax received by the School District in any year shall be used to pay costs of such purposes until all debt service requirements of the Bonds for that year have been satisfied from the Debt Service Account. Pursuant to Article VIII, Section VI, Paragraph IV of the Constitution of Georgia and Part 2 of Article 3 of Chapter 8 of Title 48 of the Official Code of Georgia Annotated (collectively, the “Educational Sales Tax Act”) and the Election, the imposition of the Educational Sales Tax has been authorized upon the retail purchase, retail sale, rental, storage, use, and consumption of tangible personal property, and upon the services described and set forth in the Georgia Retailers’ and Consumers’ Sales and Use Tax Act (O.C.G.A §§ 48-8-1, et seq.) (the “State Sales Tax Act”) within Catoosa County, subject to numerous exemptions. The Educational Sales Tax is to correspond as nearly as practicable, except as to rate, with the four percent (4%) State of Georgia sales and use tax (the “State Sales Tax”) levied pursuant to the State Sales Tax Act, except that the Educational Sales Tax applies to sales of motor fuels, food and beverages, and except that sales of tangible personal property ordered by and delivered to a purchaser outside Catoosa County shall not be subject to the Educational Sales Tax regardless of the point at which title passes, and building and construction materials are not subject to the Educational Sales Tax when the contract pursuant to which the materials are purchased or used was advertised for bid prior to the voters’ approval of the imposition of the tax and the contract was entered into as a result of a bid actually submitted in response to the advertisement prior to approval of the imposition of the tax. A reciprocal credit is also allowed against the Educational Sales Tax for any amounts paid pursuant to any local sales and use tax on tangible personal property purchased outside Catoosa County. The Educational Sales Tax shall be administered and collected by the Department of Revenue, Sales and Use Tax Division (the “Collection Agent”) of the State of Georgia in the same manner as the State Sales Tax. On or before the 20th day of each month, Educational Sales Tax proceeds collected by retailers are required to be paid for the preceding month, except for retailers or providers of services with a very small tax liability who remit taxes to the Collection Agent quarterly. Retailers or providers of services are allowed, as a collection fee, a percentage of the amount of Educational Sales Tax receipts due to the Department of Revenue in the form of a deduction in paying the amount due, if said receipts are not delinquent at the time of payment to the Department of Revenue. The rate of the deduction shall be the same as the rate from time to time authorized for deductions under the State Sales Tax. The following deductions are allowed: (1) 3% of the first $3,000 of Educational Sales Tax reported due on each monthly return (other than Educational Sales Tax on motor fuel), (2) 0.50% of Educational Sales Tax in excess of $3,000 reported due on each monthly return (other than Educational Sales Tax on motor fuel), and (3) 3% of Educational Sales Tax on motor fuel reported due on each monthly return. The proceeds of the Educational Sales Tax collected by the Collection Agent are required to be disbursed as soon as practicable after collection. One percent of the amount collected is retained by the Collection Agent and paid into the general fund of the state treasury to defray the costs of administration. Pursuant to the Educational Sales Tax Act, excess proceeds of the Educational Sales Tax which remain following expenditure of proceeds for the Projects or purposes for education as described in the

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notice of the Election shall be used solely for the purpose of reducing any indebtedness of the School District. In the event there is no indebtedness, such excess proceeds shall be used for the purpose of reducing the maintenance and operations millage rate of the School District in an amount equivalent to the amount of such excess proceeds. Historical Educational Sales Tax Data. The School District intends to make the principal and interest payment on the Bonds from the Educational Sales Tax, which is expected to begin being levied on July 1, 2017, and which is scheduled to end on June 30, 2021. The School District shall, to the extent necessary, have the power to levy an ad valorem tax, beginning with calendar year 2017 and from year-to-year thereafter, on all taxable property located within the School District. The School District’s obligation to make such payments is absolute and unconditional and shall constitute a general obligation and pledge of the full faith and credit of the School District. An educational sales tax has been collected continuously in Catoosa County since July 1, 1997. The educational sales tax has been renewed by the voters four times. The current educational sales tax was approved by the majority of the voters of Catoosa County voting in an election held for such purposes on March 15, 2011. The current educational sales tax was imposed beginning July 1, 2012, and is expected to cease being collected on June 30, 2017.

Set forth below is the total amount of the sales and use tax for educational purposes distributed by the Collection Agent to the School District as of December 31 in the years 2011 through May of 2016.

Year Amount1 Percentage Change

2011 $9,262,396.47 --- 2012 9,591,908.62 3.56% 2013 8,978,619.85 (6.39) 2014 9,249,147.94 3.01 2015 9,877,782.58 6.80 2016 4,032,512.74 0.702

_____________ 1 Net of deductions allowed to dealers and net of commission allowed to the Revenue Commissioner.

2 Percentage change compares January through May 2015 to January through May 2016.

Source: State of Georgia Department of Revenue. The historical sales tax data presented above should not be considered to represent future results that may be obtained by the School District from collections of the Educational Sales Tax. Although the Board of Education believes that future financial results will be comparable to, or exceed, those set forth above, certain of the assumptions upon which it presently is relying may not materialize, and unanticipated events and circumstances, such as a recession, may occur that may adversely affect such results. Additional Security Provided by State of Georgia Intercept Program. Prior to the issuance of the Bonds, the Board of Education, pursuant to O.C.G.A § 20-2-480, will notify the State of Georgia Board of Education (the “State Board”) of the proposed issuance of the Bonds and authorize and direct the State Board to withhold and transfer School District funds as hereinafter set forth. Under the terms of the Resolution, the Debt Service Account Custodian is required to transfer to the Paying Agent for the Bonds such amounts of money as are necessary to provide for the payment of the interest, or principal and interest, on the Bonds coming due each Interest Payment Date. Under the terms of the Resolution, if on the 15th day of the calendar month preceding each Interest Payment Date (or, if such 15th day is not a

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business day, the next succeeding business day) there shall not be on deposit in the Debt Service Account an amount sufficient to pay in full the interest, or principal and interest, coming due on the Bonds on such Interest Payment Date, as the case may be, and the Board of Education does not immediately remedy the deficiency, the Debt Service Account Custodian shall notify the State Board of the amount of any such deficiency. Upon such notification, the State Board will withhold such amount from any State appropriation to which the School District may be entitled and thereafter transfer the amount so withheld to the Debt Service Account Custodian not less than two business days prior to such payment date, for immediate deposit into the Debt Service Account. Enforcement of Remedies The realization of value from the pledge of the taxing power of the School District to the payment of the Bonds upon any default will depend upon the exercise of various remedies specified by Georgia law. These remedies may require judicial actions, which are often subject to discretion and delay and which may be difficult to pursue. The enforceability of rights or remedies with respect to the Bonds may be limited by state and federal laws, rulings, and decisions affecting remedies and by bankruptcy, insolvency, or other laws affecting creditors’ rights or remedies heretofore or hereafter enacted. O.C.G.A. § 36-80-5 provides that no school district created under the Constitution or laws of the State of Georgia shall be authorized to file a petition for relief from payment of its debts as they mature or a petition for composition of its debts under any federal statute providing for such relief or composition or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities. O.C.G.A. § 36-80-5 also provides that no chief executive or other governmental officer, governing body, or organization shall be empowered to cause or authorize the filing by or on behalf of any school district created under the Constitution or laws of the State of Georgia of any petition for relief from payment of its debts as they mature or a petition for composition of its debts under any federal statute providing for such relief or composition or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities.

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THE SCHOOL DISTRICT Introduction The Catoosa County School District is a political subdivision of the State of Georgia, the boundaries of which are coextensive with the territorial limits of Catoosa County. See “CATOOSA COUNTY.” The School District is separate from and legally and fiscally independent of the Board of Commissioners of Catoosa County and all other political subdivisions of the State. The School District is the only public school system in Catoosa County and is vested, pursuant to constitutional authority, with the power to conduct a system of public education within its boundaries. The School District operates public schools in unincorporated portions of Catoosa County and in the incorporated cities of Ringgold and Fort Oglethorpe, Georgia.

Board of Education Each county in the State is composed of one school district (exclusive of independent, charter or private schools) for purposes of operating and managing the elementary and secondary public schools within the geographical boundaries of the county. The legal entity in Catoosa County is known as the Catoosa County School District, which is under the control and management of the Board of Education pursuant to O.C.G.A. § 20-2-50. Beginning in approximately 1930, the members of the Board of Education were appointed by the Catoosa County grand jury. However, by a state-wide constitutional amendment and pursuant to subsequent state-wide legislation in the early 1990s, its members are now elected by the voters of the County. By an Act of the Georgia General Assembly of local application (applying solely to Catoosa County), there are five members of the Board of Education, with one of the members elected from all of the county voters at-large and with the other four elected from four election districts that, together, comprise the entire geographical area of Catoosa County. The Board of Education has the responsibility to maintain a reasonably uniform system of public schools providing quality education for all young people of Catoosa County. With the advice of the Superintendent, it must determine the policies and prescribe the rules and regulations for the management of the school system. Information as of June 1, 2016, regarding the members and officers of the Board of Education is set forth below:

Name

Expiration Date of Current Term

Years in Office

Principal Occupation

Don Dycus, Chairman December 31, 2016 17 Retired David Moeller, Vice-Chair December 31, 2018 9 Whitfield County Schools Melvin Edwards December 31, 2016 20 Retired Gloria Hunt December 31, 2018 2 Retired Jack Simms December 31, 2018 1 Retired

Administration School Superintendent. The Board of Education appoints the Superintendent of Schools (the “School Superintendent”) who is the executive officer of the School District and the Secretary of the Board of Education. Denia Reese has been the School Superintendent since October 1, 2005. Ms. Reese is responsible for the day-to-day operations of the School District’s school system. She has been employed in various positions by the Catoosa County School District since 1984. Ms. Reese received her

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B.A. in Elementary Education and her M.Ed. in Elementary Education Curriculum from the University of Tennessee in Chattanooga and her Ed. S. in Educational Leadership from the University of Tennessee at Knoxville. Ms. Reese is also a graduate of the Georgia Leadership Institute for School Improvement, the Governor’s Leadership Institute, and she is a Dale Carnegie graduate. She serves as a Core Knowledge Trainer. Ms. Reese began her career with the Catoosa County School District as an Elementary School teacher at Graysville Elementary School, a position which she held from 1984 until 1988. From 1988 to 1994, she was Assistant Principal at Graysville Elementary. In 1994 she became Principal of Graysville Elementary and served in that capacity until she became Superintendent of Catoosa County Schools. Assistant School Superintendent and Director of Finance. The Board of Education appoints the Assistant Superintendent of Schools and the Chief Financial Officer. Dr. Kim Nichols has been Assistant Superintendent and Director of Finance since July 1, 2012. Dr. Nichols is responsible for the financial affairs of the School District. Dr. Nichols entered the Catoosa County School District also as an elementary school teacher in 1985, after serving two years in Alabama. She served as the Assistant Principal and Principal of West Side Elementary for nine years. In July, 2001, Dr. Nichols was appointed to the Central Office Administrative staff as Curriculum Specialist, Curriculum Director, and presently Assistant Superintendent. Dr. Nichols holds a B.S. in Elementary Education from the University of Hawaii, a M.A. in Elementary Education from the University of Alabama at Birmingham, and Ed.D. in Educational Leadership from the University of Tennessee. Operations The School District serves all of the area within Catoosa County. Funds for the general maintenance and operation (“M&O”) of the School District are derived from local, state, and federal sources. Local revenues consist primarily of ad valorem property taxes. The Board of Education adopts an annual operating and capital budget and determines the rate of tax levy necessary to support the budget. The Board of Education then certifies the rate of levy to the Board of Commissioners of Catoosa County, which is required to collect taxes for the Board of Education based upon the ad valorem property tax certified by the Board of Education. See “SCHOOL DISTRICT AD VALOREM TAXATION, -Annual Tax Levy.” Funds received from the State are determined by certain formulas, generally based upon the number of students served and the relative wealth of the School District in relation to other school districts in the State, as established by the State of Georgia Department of Education. Funds received from the federal government are primarily for programs for disadvantaged and handicapped students and for the school food service program. During the fiscal years 2010-2015, approximately 40% of the School District’s revenues were derived from local sources, approximately 51% from State sources (including State of Georgia lottery proceeds), and approximately 9% from federal sources.


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Employees, Employee Relations, and Labor Organizations The School District had approximately 1,619 employees as of June 1, 2016, in the following categories:

Classroom teachers…………………………………………... 782 Administrators and Supervisors……………………………... 94 Media Specialists, Guidance Counselors, and Psychologists.. 53 Aides and Clerical Personnel………………………………... 326 Transportation and Maintenance Personnel…………………. 165 Food Service Personnel and Custodians…………………….. 132 Other………………………………………………………… 67 Total…………………………………………………... 1,619

No employees of the School District are represented by labor organizations or are covered by collective bargaining agreements, and the Board of Education is not aware of any union organizing efforts at the present time. The Board of Education believes that employee relations are good. Enrollment Set forth below is information concerning enrollment in the School District over the past five school years:

School Year (PK) (K) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) Total 2011-2012 243 783 840 802 803 814 811 884 831 840 902 850 854 758 11,0152012-2013 237 841 771 805 813 813 807 805 892 839 889 823 852 749 10,9362013-2014 236 799 832 766 799 815 831 800 814 870 884 846 818 742 10,8522014-2015 270 792 777 836 754 800 826 798 811 799 970 837 846 744 10,8602015-2016 272 747 780 786 840 757 811 820 816 838 859 941 826 730 10,823

(PK) = Preschool; (K) = Kindergarten. Special education students are mainstreamed throughout K – 12th grades.

Schools, 2015 - 2016 School Term The major capital improvements planned by the School District for the next five years and the anticipated sources of funds for these improvements are described in “THE BONDS, -The Projects.” During the 2015-2016 School Term, there were approximately 863 certificated personnel serving 10,767 students in the various schools. Specialists are available in the fields of speech, hearing, vision, learning disabilities, emotionally disturbed, physically handicapped, mentally retarded, hospital/homebound, and gifted children. The 2015-2016 estimated pupil-classroom teacher ratio for all schools is 15.7:1 (this does not include non-teaching personnel such as counselors and librarians). All teachers in the school system hold Bachelor’s degrees, most have Master’s degrees, and many have Specialist’s or Doctoral degrees. Most have a continuing interest in professional and personal growth through formal study and staff development workshops and through meeting professional learning standards. All schools in the School District are “Accredited With Quality” by the Georgia Accrediting Commission, and have met the requirements for Standard Schools as set forth by the State of Georgia

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Department of Education. All are accredited by the Southern Association of Colleges and Schools. Criteria for accreditation include qualification of personnel, adequacy of instructional supplies, equipment and buildings, and libraries and media centers. The School District has ten elementary schools, three middle schools, three high schools, and one alternate school, all located on 16 separate campuses. In addition, the School District has one maintenance/transportation facility and one office facility. Set forth below is information concerning the schools in the school system during the present school term:

________________ 1 Dates given refer to the earliest construction. Classrooms and/or buildings may have been added in subsequent years. 2 Special Rooms include cafeterias, media centers, gymnasiums, art and music, and vocational rooms. 3 Battlefield Primary and Elementary are both on the same 29.0 acre site.

4 Ringgold Elementary and Ringgold Primary School share the same 40.9 acre site.

5 Ringgold High School and Ringgold Middle School share the same 61.6 acre site.


Schools

Grades

Enrollment

Site (Acres)

Year Occupied1

Number of Classrooms

Special Rooms2

Portable Rooms

Elementary Schools Battlefield Elementary 3-5 486 29.0 1977 27 3 0 Battlefield Primary PK-2 560 3 2002 38 5 0 Boynton PK-5 549 12.0 1950 40 4 0 Cloud Springs K-5 415 10.5 1963 34 4 0 Graysville K-5 497 13.1 1950 32 4 3 Ringgold Elementary 3-5 485 40.9 1990 31 4 0 Ringgold Primary PK-2 555 4 1999 46 4 0 Tiger Creek PK-5 504 7.2 1985 39 6 0 Westside PK-5 494 15.0 1954 32 4 0 Woodstation K-5 503 76.9 2004 43 5 0 Middle Schools Lakeview 6-8 745 25.0 1956 53 9 0 Heritage 6-8 936 64.3 2005 50 12 0 Ringgold 6-8 788 61.6 1955 54 8 3 High Schools Lakeview-Fort Oglethorpe 9-12 885 128.0 1972 51 14 3 Ringgold 9-12 1,008 4 1972 52 15 13 Heritage 9-12 1,285 114.5 2008 72 20 0 Special Entities Catoosa Learning Ctr 6-12 99 8.0 1952 20 3 0 TOTALS: 10,767 491.5 642 104 22

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DEBT STRUCTURE OF THE SCHOOL DISTRICT Summary of School District Debt by Category Set forth below is information concerning debt of the School District as of June 1, 2016, and as of the anticipated date of issuance of the Bonds. The information set forth below should be read in conjunction with the School District’s financial statements included as Appendix A hereto.

Category of Obligation1

Amount Authorized or Issued

Amount Outstanding

as of June 1, 2016

Amount to be Outstanding Upon

Issuance of the Bonds General Obligation Debt The Bonds $49,000,000 -0- $40,000,000 Series 2011 Bonds 40,000,000 $17,425,000 17,425,000 TOTAL $89,000,000 $17,425,000 $57,425,000 ________________ 1

The Bonds and Series 2011 Bonds are general obligations of the School District to which its full faith and credit and taxing power are pledged. Debt service on the Bonds and the Series 2011 Bonds are payable first from the Educational Sales Tax and the current educational sales tax, respectively.

Indebtedness of Overlapping Governmental Entities Property owners in the School District are responsible for both the School District’s debt obligations and any debt obligations of other taxing entities (“Overlapping Entities”) in the proportion to which the jurisdiction of the School District overlaps such entities. Set forth below are the estimated overlapping general obligation debt and overlapping property tax supported contractual obligations as of June 1, 2016. Although the School District has attempted to obtain accurate information as to the overlapping debt, it does not guarantee its completeness or accuracy. Information regarding overlapping debt is based on information supplied by others, as there is no central reporting entity which has this information available.

Category of Obligation

Amount Outstanding as of June 1, 2016

Catoosa County Intergovernmental Contracts Series 2014A Bonds Series 2014B Bonds

$ 1,756,300

2,725,800 City of Ringgold General Obligation Bonds 7,401,000 TOTAL $11,883,100

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Debt Limitations State Law. Article IX, Section V, Paragraph I(a) of the Constitution of the State of Georgia provides that the School District may not incur long-term obligations (other than refunding obligations) payable out of general property taxes without the approval of a majority of the qualified voters of the School District voting at an election called to approve the obligations. In addition, under the Constitution of the State of Georgia, the School District may not incur long-term obligations payable out of general property taxes in excess of 10% of the assessed value of all taxable property within the School District. Short-term obligations (those payable within the same calendar year in which they are incurred), lease and installment purchase obligations subject to annual appropriation, and intergovernmental obligations are not subject to the legal limitations described above. As computed in the table below, based upon assessed values as of January 1, 2015, the School District could incur, upon necessary voter approval, immediately after the issuance of the Bonds, approximately $72,678,045 of long-term obligations payable out of general property taxes.

Computation of Legal Debt Margin Gross Tax Digest for the School District as of January 1, 2015 ............................................ $1,733,720,750 Less M&O Exemptions1 ......................................................................................................... (252,690,295) Net M&O Tax Digest................................................................................................ $1,481,030,455 Debt Limit (10% of Net M&O Tax Digest) .............................................................................. $148,103,045 Less Amount of Debt Outstanding, after Issuance of the Bonds, Applicable to Debt Limit ........................................................................................ (57,425,000) Legal Debt Margin ...................................................................................................................... $72,678,045 ________________ 1

Based on M&O exemptions. Actual bond exemptions are not available because in 2015 it was not necessary for the School District to levy a tax for general obligation debt; debt service on outstanding debt has been paid by proceeds of the existing educational sales

tax. It is not expected that the amount of bond exemptions would be materially higher than the amount of M&O exemptions. Source: State of Georgia Department of Revenue.

O.C.G.A. § 20-2-506(a)(4) provides that lease and installment purchase contracts subject to annual appropriation must contain provisions limiting the total combined annual payments for such contracts and intergovernmental contracts in any calendar year to an amount equal to 7.5% of the total local revenue collected for M&O of the School District in the most recently completed fiscal year. 7.5% of the total local revenue collected for maintenance and operation of the School District in fiscal year 2015 was $2,708,973 ($36,119,644 x 7.5%), and the School District’s total combined annual payments for lease and installment purchase contracts and intergovernmental contracts in calendar year 2016 is $65,046. Long and Short-Term Indebtedness The School District has no plans to issue any other short term obligations and no plans to issue any long term indebtedness other than the Bonds.

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Debt Service Schedule Set forth below are the principal and estimated interest payment requirements of the School District with respect to the Bonds.

Period Ending Principal Interest Debt Service

Fiscal Year Annual Debt

Service

2/1/2017 $872,222.22 $872,222.226/30/2017 $872,222.22

8/1/2017 $1,000,000.00 $1,000,000.002/1/2018 1,000,000.00 1,000,000.00

6/30/2018 2,000,000.00 8/1/2018 $7,220,000.00 1,000,000.00 8,220,000.002/1/2019 819,500.00 819,500.00

6/30/2019 9,039,500.00 8/1/2019 7,590,000.00 819,500.00 8,409,500.002/1/2020 629,750.00 629,750.00

6/30/2020 9,039,250.00 8/1/2020 7,980,000.00 629,750.00 8,609,750.002/1/2021 430,250.00 430,250.00

6/30/2021 9,040,000.00 8/1/2021 8,390,000.00 430,250.00 8,820,250.002/1/2022 220,500.00 220,500.00

6/30/2022 9,040,750.00 8/1/2022 8,820,000.00 220,500.00 9,040,500.00

6/30/2023 9,040,500.00

$40,000,000.00 $8,072,222.22 $48,072,222.22 $48,072,222.22


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SCHOOL DISTRICT AD VALOREM TAXATION Introduction Ad valorem property taxes accounted for an annual average of approximately 27.3% of the general fund revenues of the School District for the fiscal years ended June 30, 2011, through June 30, 2015, and are budgeted to account for approximately 27.1% of general fund revenues for the year ending June 30, 2016. Ad valorem property taxes are levied annually in mills (one tenth of one percent) upon each dollar of assessed property value. The School District uses county-assessed valuations for real and personal property. Property Subject to Taxation Ad valorem property taxes are levied, based upon value, on real and personal property within the School District subject to taxation for school bond purposes. The boundaries of the School District are coextensive with the territorial limits of Catoosa County. There are, however, certain classes of property which are exempt from taxation, including public property, religious property, charitable property, property of nonprofit hospitals, nonprofit homes for the aged, and nonprofit homes for the mentally handicapped, college and certain educational property, public library property, certain farm products, certain air and water pollution control property, and personal effects. For the purposes of reducing the burden of ad valorem taxation for property owned by a taxpayer and occupied as his or her legal residence (“homesteads”), the State has granted several types of homestead exemptions and Catoosa County has enacted several types of homestead exemptions specific to the County. In addition, the School District allows exemptions from ad valorem taxation for school purpose for the following: (1) homesteads of persons 75 years of age or older, a total deduction of the assessed value of the homestead for general purposes (this exemption is inapplicable to taxes levied to pay bonded indebtedness); (2) homesteads of disabled persons with an income of the applicant and spouse which does not exceed $20,000 for the immediately preceding taxable year – a maximum $30,000 deduction from the assessed value of the homestead (this exemption is inapplicable to taxes levied to pay bonded indebtedness); and

(3) homesteads of all persons up to $2,000 of assessed value (this exemption is inapplicable to taxes levied to pay bonded indebtedness). Additionally, the following types of commercial and industrial inventory are 100% exempt from ad valorem taxation: (1) raw materials and goods in process of manufacture, (2) finished goods produced in Georgia within the last 12 months, and (3) finished goods stored in Georgia within the last 12 months and destined for shipment out-of-state. Tax Relief Initiatives The State Property Taxpayer’s Bill of Rights, which took effect on January 1, 2000, calls for a mandatory rollback in the millage rate whenever the tax digest increases. The stated aim is to prevent creeping tax bills. If elected officials propose to increase the millage rate, they must hold three public meetings, at times when the most constituents can attend, to explain why the tax hike is necessary and vote publically for or against it. The law also shifts the burden of proof from the homeowner to the local

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government in the appeals process; requires the county assessor’s office to provide a written explanation to homeowners as to why their taxes went up; and allows taxpayers going through appeal to name the time of their hearing before the Board of Equalization. The law also calls on taxing bodies to cover the legal fees of any homeowner who receives a 15% reduction or greater in their assessment and allows taxpayers going through appeals process the right to record the hearing.

Property Tax Reform Bill. On June 4, 2010, the Governor of Georgia signed into law Senate Bill 346, in order to minimize undue hardship and confusion to property owners without having to implement the use of caps on assessments. This comprehensive tax reform bill contains numerous changes to the assessment and appeals process, several of which are as follows: (a) requires that all property owners receive an annual assessment notice that contains an estimate of their tax liability, regardless of whether the property value has changed; (b) requires the sales price of the most recent arm’s length bona fide sale in any year to be the maximum allowable fair market value for the next taxable year; (c) grants appeal rights to a new property owner who makes a purchase before assessment notices are sent; (d) grants all property owners 45 days, instead of 30, to file an appeal of the assessed value after receipt of their annual assessment notice; (e) ensures the determination of fair market value of real property shall not include the value of intangible assets; (f) authorizes non-residential properties exceeding $1 million in value to have their appeal heard by a hearing officer who must be either a state certified general real property appraiser or a state certified residential real property appraiser and be approved by the Georgia Real Estate Commission and the Georgia Real Estate Appraisers Board; (g) authorizes installment billing and allows cities and counties, by resolution or ordinance, to elect to receive payment for ad valorem taxes in any form of payment; (h) authorizes two or more counties to establish a regional board of equalization if they enter into an intergovernmental agreement to do so; and (i) requires the Department of Revenue to create a uniform appeal form and to update their training for tax officials.

Tax Reform Act of 2012 (Georgia). On April 19, 2012, the Governor of Georgia signed into law

House Bill 386, an omnibus tax reform bill. It is uncertain at this time what the fiscal impact will be to local governments as the Act is implemented. The new law provides several changes to existing tax laws that will affect local governments including:

Birthday Tax - replaces sales tax and local ad valorem tax on vehicles with a new 7% title fee that

is paid on the value of the vehicle whenever the vehicle is initially purchased or changes ownership;

Energy Exemption in Manufacturing - removes the state and local sales tax on energy used in

manufacturing by phasing in an exemption over a four year period (25% per year until fully implemented in 2016); however, the legislation allows for local governments to pass a local ordinance to collect an excise tax on the energy used in manufacturing to make up for the sales tax revenues lost through the exemption;

E-Fairness - expands the number of out-of-state companies required to collect local and state

sales tax on internet transactions that have previously been exempt from taxation because the business did not have a physical presence in the State;

Conservation Property Exemption - includes comprehensive revision of the income tax credit for

the qualified donation of conservation real property and prohibits counties, cities and consolidated governments from holding a conservation easement unless the encumbered property is located at least partly within the boundary of the local government; and

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Changes to Existing Exemptions – revises the existing sales and use tax exemption for film and equipment production and restores the back-to-school sales tax holiday and the energy-efficient appliances sales tax holiday. Transportation Funding Act of 2015. On May 4, 2015, the Governor of Georgia signed into law

House Bill 170 (the “Transportation Funding Act”), which became effective July 1, 2015. The new law eliminates the current State sales tax on gasoline and diesel and imposes a new per-gallon excise tax on motor fuel (the “Excise Tax”). The Excise Tax is subject to annual adjustments to account for inflation and the increasing fuel efficiency of new vehicles (which will be tied to increases in the Corporate Average Fuel Economy standard and the National Highway and Construction Cost index) and will initially be imposed at the rate of 26 cents per gallon for gasoline and 29 cents per gallon for diesel. Proceeds of the Excise Tax would be required to be spent on transportation related projects. The Transportation Funding Act generally allows local governments to continue to collect local sales and use tax (“LOST”), special purpose local option sales tax (“SPLOST”), sales tax for educational purposes (“ESPLOST”), homestead option sales tax (“HOST”), and municipal optional sales tax (“MOST”), if any, at the current 1% rate on the sale of motor fuel. However, if the retail price of motor fuel rises above $3.00 per gallon, any increase above $3.00 will not be subject to such 1% rate of tax. At this time, it is uncertain if the Transportation Funding Act will have an adverse impact on tax revenues of the School District.

Assessed Value Assessed valuation, which represents the value upon which ad valorem property taxes are levied, is calculated as a percentage of fair market value. Georgia law requires all counties to assess taxable tangible property, with certain exceptions, at 40% of its fair market value and to tax such property on a levy made by each tax jurisdiction according to 40% of the property’s fair market value. Georgia law requires certain agricultural real property to be assessed for ad valorem property tax purposes at 75% of the value of which other real property is assessed and requires certain historical property to be valued at a lower fair market value for ad valorem property tax purposes. Conservation use property represents up to 2,000 acres of real property of a single owner that is either devoted to the good faith production of agricultural products or timber or is a type of environmentally sensitive property. Such conservation use property is valued at 40% of its current use assessment. “Standing Timber” is assessed one time, following its sale or harvest, at 100% of its fair market value. The chief appraiser of Catoosa County is required to submit a certified list of assessments for all taxable property, except motor vehicles and property owned by public utilities, within Catoosa County to the Catoosa County Board of Tax Assessors. The Tax Commissioner of Catoosa County is required to present the tax returns to the Catoosa County Board of Tax Assessors by April 1 of each year. The Board of Tax Assessors is required to complete its revision and assessment of returns by June 1 of each year. The Tax Commissioner then certifies the digest and forwards a copy of the completed digest to the State of Georgia Revenue Commissioner for examination and approval. The Revenue Commissioner has the authority to examine the digest for the purpose of determining if the valuations of property are reasonably uniform and equalized between and within counties. Assessments also may be subject to review at various stages by the Catoosa County Board of Equalization and by state courts. The State of Georgia Motor Vehicle Tax Unit assesses the value of all motor vehicles by make, model, and year and provides this information to each county’s tax office. The State of Georgia Property Tax Unit assesses the value of the property of public utilities and divides the assessment into two parts, assessed value of property and assessed value of franchise, and provides these amounts to the county which bills these taxes to the utilities.

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Annual Tax Levy The School District does not have the power to levy ad valorem property taxes. The Board of Commissioners of Catoosa County annually levies the ad valorem property taxes for the School District. The Board of Education is required by State law to certify annually to the Board of Commissioners of Catoosa County the rate of levy needed to produce the amount of property tax revenues necessary to support and maintain the School District’s school system. The Board of Education determines a rate of levy for each fiscal year by computing a rate which, when levied upon the assessed value of taxable property within the territorial limits of the School District, will produce the necessary amount of property tax revenues. Under State law, the Board of Commissioners of Catoosa County is required to levy annually the ad valorem property tax, as certified to it by the Board of Education, upon the assessed value of all taxable property within the School District. The Georgia Constitution provides that the annual rate of levy for support and maintenance of a school system may not exceed 20 mills per dollar, except where a school system had in effect on June 30, 1983 a millage rate in excess of 20 mills per dollar. On June 30, 1983 the rate of levy in effect for support and maintenance of the School District was less than 20 mills per dollar. The millage limitation for the School District may be increased or removed by action of the Board of Education, but only after such action has been approved by a majority of the qualified voters of the School District. Under State law, there is no limitation on the annual rate of levy for the payment of principal of and interest on bonded indebtedness of the School District. Ad valorem property taxes received for the payment of debt service on general obligation bonds of the School District are required by law to be held and accounted for separately from other funds of the School District. See “THE BONDS, -Security and Sources of Payment for the Bonds.” Property Tax Collections Catoosa County bills and collects the property taxes of the School District on behalf of the School District. Pursuant to State law, the tax collector of Catoosa County remits all taxes collected for school purposes to the Board of Education on a weekly basis, after deducting a commission for collecting the taxes. The commission charged by Catoosa County is 2.5% of taxes collected for the School District. Real and personal property taxes are levied on January 1 of each year on the assessed value listed as of January 1. Taxes levied by Catoosa County on January 1 are due by December 20, but the law allows taxpayers 60 days from the date of mailing before interest may be charged. After the deadline, interest is charged at a rate of 1% per month, and a penalty of 10% applies on all taxes that are not paid within 90 days of the deadline (no penalty is charged if the tax is on a homestead and less than $500). All taxes levied on real and personal property, together with interest thereon and penalties for late payment, constitute a perpetual lien on and against the property arising after January 1 in the year in which taxed. The lien becomes enforceable 30 days after notification. Georgia law provides that taxes must be paid before any other debt, lien, or claim of any kind, except for certain claims against the estate of a decedent and except that the title and operation of a security deed is superior to the taxes assessed against the owner of property when the tax represents an assessment upon property of the owner other than the property specifically subject to the title and operation of the security deed. Collection of delinquent real property taxes is enforceable by tax sale of such realty. Delinquent personal property taxes are similarly enforceable by seizure and sale of the taxpayer’s personal property. There can be no assurance, however, that the value of the property sold, in the event of a tax sale, will be

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sufficient to produce the amount required to pay in full the delinquent taxes, including any interest or penalties thereon. When the last day for the payment of taxes has arrived, the tax collector notifies the taxpayer in writing of the fact that the taxes have not been paid and that, unless paid, an execution will be issued. At any time after 30 days from giving the notice described in the preceding sentence, the Tax Commissioner, as ex-officio Sheriff, may issue an execution for nonpayment of taxes. The Tax Commissioner then publishes a notice of the sale in a local newspaper weekly for four weeks and gives the taxpayer ten days written notice by registered or certified mail. A public sale of the property is then made by the Tax Commissioner at the Catoosa County Courthouse on the first Tuesday of the month after the required notices are given. M&O Tax Digest Set forth below is information concerning the assessed and estimated actual value of taxable property within the School District for the past five calendar years. ASSESSED VALUES:

2011 2012 2013 2014 2015

Real & Personal1 $1,539,529,300 $1,548,105,597 $1,556,435,072 $1,564,961,316 $1,591,063,858Public Utilities2 38,484,490 39,857,527 43,477,419 45,219,032 45,654,208Motor Vehicles3 126,038,210 135,118,830 135,118,830 119,437,400 85,500,970Mobile Homes4 9,590,935 9,197,774 8,817,407 8,742,011 8,471,665Timber 100% 10,000 121,782 105,988 37,863 91,404Heavy Equipment 2,509,164 2,093,730 2,410,654 1,860,198 2,938,645 Gross Tax Digest $1,716,162,099 $1,734,495,240 $1,746,365,370 $1,740,257,820 $1,733,720,750 Less Bond Exemptions -0- -0- -0- -0- -0- Net Bond Tax Digest5 $1,716,162,099 $1,734,495,240 $1,746,365,370 $1,740,257,820 $1,733,720,750 Less M&O Exemptions (229,342,674) (242,729,478) (248,484,881) (242,806,527) (252,690,295) Net M&O Tax Digest6 $1,486,819,425 $1,491,765,762 $1,497,880,489 $1,497,451,293 $1,481,030,455 Estimated Actual Value7 $4,290,390,248 $4,336,055,427 $4,365,754,443 $4,350,587,756 $4,334,164,769 ________________ 1 The State requires all counties to assess real estate and personal property at the rate of at least 40% of estimated actual value, with

the exception of timber, which is assessed at 100%. 2 The State of Georgia Property Tax Unit assesses the value of the property of public utilities at the percentage of fair market value

used by Catoosa County. The Property Tax Unit then divides the assessment into two parts, assessed value of property and assessed value of franchise, and provides these figures to Catoosa County which bills these taxes to the utilities with the amount of tax for each.

3 The State of Georgia Motor Vehicle Tax Unit assesses the value of motor vehicles by make, model, and year by county and provides this information to each county tax office. The State of Georgia assesses the value of motor vehicles at the percentage of fair market value used by Catoosa County.

4 The State of Georgia assesses the value of mobile homes at the percentage of fair market value used by Catoosa County. 5 Total assessed value, after deducting exemptions, for purposes of levying tax for the School District’s general obligation bonds. 6 Total assessed value, after deducting exemptions, for purposes of levying tax for the M&O of the School District’s school system. 7

Calculated by taking the Gross Tax Digest less Timber (assessed at 100%), divided by 40%, plus Timber at 100%.

Sources: Georgia Department of Revenue.

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Ten Largest Taxpayers Set forth below is information concerning the ten largest taxpayers in the School District in calendar year 2015.

Taxpayer

Type of Business

2015 Assessed Value for the

School District

Assessed Value as a Percent of Gross Assessed Values1

2015 Taxes Levied for the School District

Shaw Industries Inc. Manufacturing $59,338,480 3.410 $432,688 North Georgia EMC Utility 21,762,817 1.251 561,781 Propex Operating Co LLC Manufacturing 17,959,301 1.032 360,468 Salem Carpet Mills Inc. Manufacturing 9,126,135 0.524 258,635 Costco Wholesale Retail 9,096,318 0.523 291,765 Ringgold Telephone Company Utility 7,794,247 0.448 207,365 Shaw Industries Group Manufacturing 5,611,749 0.322 159,037 Lowes Home Centers, Inc. Retails 5,261,039 0.302 168,771 Zorn Eric S Trustee Retail 4,226,677 0.243 135,647 Home Depot Retail 3,976,279 0.229 127,469 Totals: $144,153,042 8.284% $2,703,626 ______________ 1

Based on calendar year 2015 Gross Tax Digest of $1,733,720,750.

Source: Catoosa County Tax Commissioner.


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M&O Tax Levies and Collections Set forth below is information concerning total real and personal property tax and public utilities tax collections of the School District reported as of the School District’s fiscal years ended June 30, 2011, through June 30, 2015, for the prior calendar year’s tax levy. The figures below exclude taxes levied and collected on motor vehicles and heavy equipment. Taxes are normally billed by November of each year and are payable on or before December 20 of each year. The tax year 2015 M&O Tax Levy for fiscal year 2015 is $1,733,720,750. Catoosa County may place liens on property once the related tax payments become delinquent.

2011 2012 2013 2014 2015 Current Year’s M&O Tax Levy $23,519,897 $22,621,428 $22,536,279 $25,291,248 $25,559,659 Less 2.5% Collection Fee (587,997) (565,536) (563,407) (632,281) (638,991)

Current Year’s Net M&O Tax Levy $22,931,900 $22,055,892 $21,972,872 $24,658,967 $24,920,668

Tax Collections Distributed to School District

Distribution of Current Year’s Taxes $22,610,436 $21,483,192 $20,526,364 $23,496,909 $24,220,613

Distribution of Prior Years’ Taxes 1,130,522 1,215,271 1,114,736 1,222,067 960,081

Total Tax Collections $23,740,958 $22,698,463 $21,641,100 $24,718,157 $25,180,694

Current Years’ Tax Collections as a Percent of Current Year’s Net M&O Tax Levy

99%

97%

93%

95%

97%

Total Tax Collections as a Percent of Current Year’s Net M&O Tax Levy

104%

103%

98%

100%

101%

Uncollected Current Year’s M&O Property Taxes

$746,222

$836,539

$685,514

$751,007

$683,400

Due Date of Taxes 12/20/2010 12/20/2011 12/20/2012 12/20/2013 12/20/2014

Tax Period Begins 07/01/2010 07/01/2011 07/01/2012 07/01/2013 07/01/2014 Tax Period Ends 06/30/2011 06/30/2012 06/30/2013 06/30/2014 06/30/2015

Source: Catoosa County Tax Commissioner.


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Millage Rates Set forth below is information concerning the rate of levy of property taxes per $1,000 of assessed value, or millage rates, of the School District, unincorporated and incorporated Catoosa County, and the State of Georgia for the past five calendar years. School District District Wide

Calendar Year

M&O1

Debt Service2

Total

Uninc. County

Inc. County3 State

Uninc. Total

Inc. Total3

2011 16.773 0.000 16.773 5.385 5.385 0.250 22.408 22.408 2012 16.763 0.000 16.763 5.382 5.382 0.200 22.345 22.345 2013 18.713 0.000 18.713 6.296 6.296 0.150 25.159 25.159 2014 18.692 0.000 18.692 6.598 6.598 0.100 25.390 25.390 2015 18.692 0.000 18.692 6.598 6.598 0.050 25.340 25.340

________________ 1

The annual rate of levy for M&O of the School District may not exceed 20 mills. See “SCHOOL DISTRICT AD VALOREM TAXATION, -Annual Tax Levy.”

2 The annual rate of levy for payment of debt service of the School District is without limitation as to rate or amount.

3 In addition to the District-Wide Incorporated Totals, the City of Fort Oglethorpe and the City of Ringgold have their own M&O millage rate for property within their city limits. The M&O millage rates for Fort Oglethorpe have been as follows: 2011 – 8.672 mills; 2012 – 6.716 mills; 2013 – 6.747 mills; 2014 – 6.753 mills; 2015 – 6.753 mills. The M&O millage rates for Ringgold have been as follows: 2011 – 2.707 mills; 2012 – 2.680 mills; 2013 – 2.683 mills; 2014 – 2.763 mills; 2015 – 3.0 mills.

Source: State of Georgia Department of Revenue, Local Government Services Division.


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SCHOOL DISTRICT FINANCIAL INFORMATION Five-Year General Fund History Set forth below is a historical, comparative summary of the revenues, expenditures, and changes in fund balance of the School District’s General Fund for the past five fiscal years. Information in the table for fiscal years 2011 to 2015 has been extracted from audited financial statements of the School District for the years ended June 30, 2011, to June 30, 2015. Although taken from audited financial statements, no representation is made that the information is comparable from year to year, or that the information as shown taken by itself presents fairly the financial condition of the School District for the fiscal years shown. For more complete information, reference is made to the audited financial statements of the School District for fiscal year 2015, which is included in this Official Statement as Appendix A, and to the audited financial statements of the School District for fiscal years 2011 to 2014, copies of which are available from the School District upon request.

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Fiscal Years Ended June 30

2011 2012 2013 2014 2015 Revenues Property Taxes $26,621,521 $26,201,725 $25,943,172 $28,831,881 $29,332,359 Sales Taxes 472,638 507,827 658,133 497,394 606,947 State Funds 56,869,673 54,673,771 56,476,585 56,688,978 60,198,626 Federal Funds 11,856,108 8,140,693 8,580,284 8,133,974 7,741,039 Charges for Services 2,781,075 2,767,054 2,652,685 2,571,712 2,637,035 Investment Earnings 477,898 316,525 142,733 36,206 33,360 Miscellaneous 3,020,609 3,376,149 3,225,672 3,948,520 3,509,943 Total Revenues $102,099,522 $95,983,744 $97,679,264 $100,708,665 $104,059,309 Expenditures Current Instruction $64,977,114 $64,319,685 $64,744,043 $63,970,714 $65,580,121 Support Services

Pupil Services 3,862,616 3,912,798 3,794,073 3,999,908 4,244,620 Improvement of Instruction Service 2,121,230 2,289,621 2,218,576 2,394,484 2,404,170 Educational Media Services 1,965,074 2,044,299 1,905,748 1,841,462 1,823,038 General Administration 1,024,311 985,433 1,051,887 1,134,739 1,311,845 School Administration 6,777,911 6,873,126 6,914,215 7,029,926 7,273,453 Business Administration 560,541 1,240,183 743,434 700,097 666,717 Maintenance & Operation of Plant 6,837,047 6,945,598 7,152,774 7,792,653 7,816,835 Student Transportation Services 3,785,479 4,115,170 4,424,380 4,651,832 4,442,883 Central Support Services 432,976 484,209 460,824 495,333 517,618 Other Support Services 1,235,202 1,278,577 1,316,677 1,360,771 1,314,922

Community Services 549,248 548,842 602,061 494,791 505,231 Food Services Operation 5,088,138 5,173,710 5,204,526 5,250,924 5,136,380 Debt Services

Principal 2,048 18,697 2,355 -0- 71,410 Interest 402 765 95 -0- 20,790

Total Expenditures $99,219,337 $100,230,713 $100,535,668 $101,117,634 $103,130,033

Excess of Revenues Over (Under) Expenditures $2,880,185 ($4,246,969) ($2,856,404) ($408,969) $929,276

Other Financing Source (Uses) Insurance Proceeds $26,373 $14,507 -0- -0- -0-Capital Leases 6,600 $16,500 -0- -0- $48,565 Transfers In -0- -0- -0- -0- -0- Transfers Out -0- -0- -0- -0- -0- Total Other Finance Sources (Uses) $32,973 $31,007 -0- -0- $48,565 Net Change in Fund Balances $2,913,158 ($4,215,962) ($2,856,404) ($408,969) $977,841 Fund Balance Beginning of Year $14,501,384 $17,414,542 $13,198,580 $10,342,176 $9,933,207 Fund Balance End of Year $17,414,542 $13,198,580 $10,342,176 $9,933,207 $10,911,048

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Accounting Policies In May 1999, the Governmental Accounting Standards Board (“GASB”) issued GASB Statement No. 34, “Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments.” GASB 34 established new financial reporting requirements for state and local governments, and requires the addition of a management’s discussion and analysis section and governmental-wide financial statements, consisting of a statement of net assets and a statement of activities. Beginning in fiscal year 2003, the School District’s audited financial statements were in compliance with GASB 34 and generally accepted accounting principles as applicable to governmental units. The Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, included as Schedule 1 in the general purpose financial statements included as Appendix A to this Official Statement, are not a required part of the basic financial statements of the School District but are supplementary information required by GASB. The State of Georgia Department of Audits, the School District’s auditor, has applied certain procedures to the preparation of Schedule 1, but is not expressing an opinion or providing any assurance on the information. The School District uses funds, each of which is considered a separate accounting entity, to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. The operations of each fund are accounted for with a self-balancing set of accounts. The School District uses the following funds: Major Governmental Funds. This category accounts for all or most of the School District’s general activities and consists of the following funds: The General Fund is the School District’s primary operating fund. It accounts for all financial resources of the School District, except those resources required to be accounted for in another fund. The District-Wide Capital Projects Fund accounts for financial resources including ESPLOST and bond proceeds to be used for the acquisition, construction, or renovation of major capital facilities. The Debt Service Fund accounts for taxes (property and sales) legally restricted for the payment of general long-term principal, interest, and paying agent’s fees. Fiduciary Funds. This category accounts for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units, and/or other funds. The Agency Funds account for assets held by the School District as an agent for other funds, governments, or individuals. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes, and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities are reported as other financing sources. Note 2 of the general purpose financial statements of School District included as Appendix A to this Official Statement contains a detailed discussion of the School District’s significant accounting policies.

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Budgetary Process for General Fund General Description. Each year the Board of Education adopts a nonappropriated budget for the School District’s General Fund, prepared in conformity with GASB 34 and on the modified accrual basis, which is the same basis on which it presents its financial statements. The operating budget contains proposed expenditures and the means for financing them. The School District is not legally required to stay within the budget, but under State law it must meet certain minimum expenditure requirements for allotted State funds. The operating budget contains proposed expenditures and the means for financing them. The School District is legally required to stay within the budgeted amounts with the level of budgetary control set at the aggregate level (i.e., by governmental fund type), and under State law it must meet certain minimum expenditure requirements for allotted State funds. The budget process begins when the School District’s administration prepares a tentative, aggregated budget for approval by the Board of Education. After approval of this tentative budget by the Board of Education, such budget is advertised at least once in a newspaper of general circulation in Catoosa County. At the next regular meeting of the Board of Education after advertisement, the Board of Education receives comments on the tentative budget, makes revisions as necessary, and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, O.C.G.A. § 20-2-167, to the State Board. Current Budget. Set forth below is a summary of the School District’s adopted and actual budget for its General Fund for the fiscal year ending June 30, 2016. The budget was based upon certain assumptions and estimates of the School District’s administration regarding future events, transactions, and circumstances. Realizations of the results projected in the budget will depend upon implementation by management of policies and procedures consistent with the assumptions made by the School District. Accordingly, the actual results achieved for the budget could materially vary from those projected in the budget shown below.

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Catoosa County School District Budget Analysis Report, Years Ending June 30, 2016

Employee Pension Plan Substantially all of the teachers and the administrative and clerical personnel of the School District are covered by the Teachers Retirement System of Georgia (“TRS”), a cost-sharing multiple-employer defined benefit pension plan administered by the State for the benefit of education personnel. The Board of Education makes monthly employer contributions to TRS at rates established by the TRS Board of Trustees. TRS covered employees contribute not less than 5% or more than 6% of their annual covered salary to TRS, as provided by State law. The member contribution rate effective July 1, 2015, was 6% and the employer contribution rate effective July 1, 2015, was 14.27%. Bus drivers, lunchroom personnel, maintenance and custodial personnel are covered by the Public School Employees’ Retirement System of Georgia, a multiple-employer public employee retirement system administered by the State of Georgia. All employers’ contributions are made by the State of Georgia; the Board of Education makes no contribution to this plan. Reference is made to Note 16 of the general purpose financial statements of the School District included as Appendix A for a description of the School District’s retirement plans.

2016 BudgetRevenues Property Taxes $28,166,336 Sales Taxes 475,000 State Funds 61,423,888 Federal Funds 7,832,483 Charges For Services 1,679,000 Investment Earnings 0 Miscellaneous 0 Total Revenues $99,576,707 Expenditures Current Instruction $68,873,538 Support Services Pupil Services 3,890,282 Improvement of Instructional Services 2,592,240 Educational Media Services 1,513,610 General Administration 1,066,893 School Administration 7,443,058 Business Administration 760,421 Maintenance and Operation of Plant 7,908,029 Student Transportation Services 4,799,862 Central Support Services 845,791 Other Support Services 863,414 Community Services 65,009 Food Services Operation 5,100,000 Total Expenditures $105,722,157 Excess (Deficiency) of Revenues Over (Under) Expenditures

($6,145,450)

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Other Employee Benefits School District employees accrue personal and sick leave up to a maximum amount of 75 days. Employees covered by TRS can use excess days toward retirement. The School District does not pay accrued sick or personal leave upon retirement or termination of employment for employees. In addition, the School District offers health insurance, life insurance, disability insurance, dental and cancer insurance, personal days off for holidays, and educational opportunities. It pays $30.00 of coverage for health insurance and one-half the cost of single coverage on dental insurance for employees. Employees also are covered under statutory plans for social security and workers’ compensation. Employees may elect to be under a “cafeteria” plan and may elect to participate in a flexible spending program for medical and dependent care expenses. Employees may also elect to contribute to a 403(b) plan with pre-tax dollars. Governmental Immunity and Insurance Coverage Governmental Immunity. Article I, Section II, Paragraph IX of the Constitution of the State of Georgia extends sovereign immunity to the School District, as a political subdivision of the State of Georgia, except as to actions for the breach of written contracts and actions for recovery of damages for any claim for which automobile insurance coverage exists, but only to the extent of the liability insurance provided. Officers and employees of the School District shall not be subject to suit or liability, and no judgment shall be entered against them, for the performance or nonperformance of their official functions. The School District, however, may be unable to rely upon the defense of sovereign immunity and may be subject to liability in the event of suits alleging causes of action founded upon various federal laws, such as suits filed pursuant to 42 U.S.C. § 1983, alleging the deprivation of federal constitutional or statutory rights of an individual and suits alleging anti-competitive practices and violations of the federal antitrust laws by the School District in the exercise of its delegated powers. Insurance Coverage. The School District is self-insured for unemployment compensation claims. It is self-insured for Workers’ Compensation up to $450,000 and uses Claims Management Services Inc. as a third-party administrator. Total estimated costs relating to workers’ compensation for July 1, 2014, through June 30, 2015 were $372,090. The School District carries commercial insurance for risk of loss associated with assets, and has neither significantly reduced coverage for this risk nor incurred losses which exceeded its insurance coverage in the current fiscal year or the past two fiscal years. Automobile coverage with Catlin Indemnity Company is summarized as follows: AUTOMOBILE Bodily Injury: $1,000,000 Combined Single Limit Medical: $5,000 per person Uninsured Motorist $1,000,000 Combined Single Limit Catlin Indemnity Company provides the School District with coverages in two main areas - casualty and crime. Present coverage for the School District, pursuant to the coverage agreement, is summarized as follows:

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Type Limits of Liability Casualty Each Occurrence Annual Aggregate Comprehensive General Liability $1,000,000 $3,000,000 Premises & Operations $1,000,000 $3,000,000 Personal Injury & Advertising Liability $1,000,000 $1,000,000 Employee Benefits Liability $1,000,000 $3,000,000 Educators Legal Liability $1,000,000 $1,000,000 Crime Public Employee Dishonest $ 100,000 Forgery or Alteration $ 100,000 Inside the Premises $ 25,000 Outside the Premises $ 25,000 Affiliated FM Insurance Company provided the School District with property coverage for the 2014-2015 school term. Present coverage for the School District is summarized as follows: Amount in Force Buildings and Contents (Blanket) $310,000,000

Each system school superintendent is required by O.C.G.A. § 20-2-104 to execute a surety bond payable to the Board of Education. The school system is considered the principal of a $25,000 surety bond executed with Old Republic General Insurance Company.


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CATOOSA COUNTY Introduction Catoosa County (the “County”), located in northwest Georgia, is bordered by Whitfield County and Walker County and is on the state line of Georgia and Tennessee. At approximately 162 square miles, Catoosa County is the 153rd largest of Georgia’s 159 counties. The City of Ringgold, county seat of Catoosa County, serves as the economic and retail center for the surrounding area, and is located approximately 100 miles north of Atlanta and 18 miles south of Chattanooga, Tennessee. Catoosa County is currently served by Interstate I-75. The population of Catoosa County grew approximately 50.6% during the 20 year period from 1990 to 2010, from 42,464 residents in 1990 to 63,942 residents in 2010. This compares with the State’s total population growth of 49.5% during the same 20 year period. Set forth below are the percentages of land use for various categories within the territorial limits of Catoosa County, computed based upon the acres of land for the various categories set forth in the tax digest for each respective year.

2011 2012 2013 2014 2015

Residential 39.6%1 59.5% 39.3% 39.1% 38.8% Agricultural 26.7 17.3 25.8 26.0 25.2 Conservation use 28.9 19.6 29.0 29.1 30.0 Commercial 4.7 2.8 4.6 4.7 4.6 Industrial 0.1 0.7 1.0 1.1 1.0 Utility 0.0 0.0 0.0 0.0 0.1 Timber 0.0 0.1 0.3 0.0 0.3

100.0% 100.0% 100.0% 100.0% 100.0% __________________

1 Percentages are based on the number of acres of real property set aside for each purpose. The total acreage of all real property located in the School District is approximately 90,405.51 acres as of 2015. This figure does not include the acreage of real property that is exempt from ad valorem property taxation. See “SCHOOL DISTRICT AD VALOREM TAXATION – Property Subject to Taxation.”

2 A large proportion of amounts constituting real property on the School District’s general tax digest is designated as Conservation Use property. See “SCHOOL DISTRICT AD VALOREM TAXATION – Conservation Use Property.”

Source: Georgia Department of Revenue Consolidated Digest Summary Government Format The County is a political subdivision of the State and is governed by a five member Board of Commissioners. Commissioners serve staggered four year terms and are elected by district. The chairman is elected as an at-large post. Government Services and Facilities Catoosa County’s Sheriff’s department has one police station, 70 sworn police officers, 47 civilian employees, and 76 vehicles. The Sheriff’s Department maintains a 24-hour uniformed patrol. Catoosa County has 7 outlying fire stations, with approximately 40 volunteers, 39 full time fire fighters and 25 part time fire fighters. The National Board of Fire Underwriters’ fire insurance rating for the fire districts is Class 5. Catoosa County maintains approximately 426.21 miles of roads and streets with 30

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full time employees. The public works department assumes primary responsibility for County Road and Right-of-Way maintenance. Catoosa County owns and maintains 7 parks containing approximately 150 acres, 13 ball fields, 4 gyms, and various cultural and recreational facilities. There is one public library in Catoosa County with approximately 130,000 volumes. Population Information The following table sets forth the population, including percentage of annual increase, in Catoosa County, the State, and the United States. The population estimate for the County in 2015 was 66,050.

Year

Catoosa County

Percentage Change

Georgia

Percentage Change

United States

Percentage Change

1960 21,101 -- 3,943,116 -- 179,323,175 -- 1970 28,271 34.0% 4,589,575 16.4% 203,211,926 13.3% 1980 36,991 30.8 5,463,105 19.0 226,545,805 11.5 1990 42,464 14.8 6,478,216 18.6 248,709,873 9.8 2000 53,282 25.5 8,186,453 26.4 281,421,906 13.2 2010 63,942 20.0 9,687,653 18.3 308,745,538 9.7

Source: U.S. Department of Commerce, Bureau of the Census. Per Capita Personal Income The following table sets forth the per capita personal income in the County, the State, and the United States for the years 2010 through 2014. Information for 2015 is not yet available.

Year Catoosa County Georgia United States 2010 27,834 34,487 40,277 2011 29,076 36,588 42,453 2012 29,973 37,254 44,266 2013 30,250 37,596 44,438 2014 $31,531 $38,980 $46,049

Source: U.S. Department of Commerce, Bureau of Economic Analysis, Regional Accounts Data.


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Bank Deposits As of June 30, 2015, 8 financial institutions with a total of 13 branch offices provided banking services within the County. The following are the total deposits in the County’s financial institutions as of June 30 in each of the years 2011 through 2015.

Year

Amount

Percentage Change

2011 $830,765,000 -- 2012 786,458,000 (5.33%) 2013 720,550,000 (8.38) 2014 697,535,000 (3.19) 2015 629,495,000 (10.8)

Source: Federal Deposit Insurance Corporation. Industry and Employment Public Employers. Set forth below are the largest public employers located in the County as of June 1, 2016, their type of service, and their approximate number of employees. There can be no assurance that any employer listed below will continue employment at the level stated.

Employer Type of Business Employees Catoosa County Board of Education Education 1,619 Catoosa County Government Government 425

Private Employers. Set forth below are the largest private employers located in the County as of June 1, 2016, their type of business, and their approximate number of employees. There can be no assurance that any employer listed below will continue to be located in the County or will continue employment at the level stated. No independent investigation has been made of, and no representation can be made as to, the stability or financial condition of the companies listed.

Employer Type of Business Employees Cabelas Wholesale, Inc. Retail 140 Costco Wholesale Retail 200 Hutcheson Medical Center, Inc. Medical 400 Little Caesar’s Food Service Unknown Lowe’s Home Centers, Inc. Home Improvement Unknown Mohawk Carpet Distribution Manufacturing Unknown NHC of Fort Oglethorpe Medical 137 Propex Operating Company, LLC Manufacturing 170 Shaw Industries Group, Inc. Manufacturing 300 Walmart Retail 400

Source: Northwest Georgia Joint Development Authority.

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Economic Sector Distribution. The following table shows the average percentage of persons who worked in each major sector of the local economy in the County in the years 2011 through 2015. Data are annual averages for each respective year. Figures are based on employees covered under the State unemployment insurance program.

Industry or Service Employment Distribution 2011 2012 2013 2014 20151 Agriculture, Forestry, and Fishing 0.3 0.2 0.2 0.2 0.2 Construction 2.9 3.1 3.2 3.4 3.4 Manufacturing 16.7 16.3 16.0 15.6 22.5 Retail Trade 18.6 19.2 19.5 19.8 19.0 Transportation and Warehousing 7.1 6.7 6.3 5.5 4.4 Finance, Insurance, and Real Estate 3.3 3.4 3.2 4.2 3.9 Prof., Scientific & Technical Services 1.2 1.6 2.1 1.5 1.3 Admin., Support, Waste Mgmt. Remed. 1.0 1.2 1.2 1.4 1.0 Healthcare and Social Services 14.5 14.1 14.3 14.1 13.1 Accommodation and Food Services 11.3 11.2 12.0 12.9 12.4 Other Industries and Services 3.0 3.0 2.7 2.6 2.4 Federal State, and Local Government 20.1 20.0 19.3 18.8 16.4 100.0% 100.0% 100.0% 100.0% 100.0%

___________________ 1 Information includes the third quarter of 2015 as the annual monthly percent is not available at this time. Source: State of Georgia Department of Labor, Labor Information Systems.

Civilian Employment Statistics of the County. Employment includes nonagricultural wage and salary employment, self-employed, unpaid family and private household workers, and agricultural workers. Persons in labor disputes are counted as employed. The use of rounded data does not imply that the numbers are exact.

2011 2012 2013 2014 2015

Employment 29,426 29,817 29,514 29,124 29,319 Unemployment 2,632 2,407 2,137 1,932 1,626

Total Labor Force 32,058 32,224 31,651 31,056 30,945 County Unemployment Rate 8.20% 7.50% 6.80% 6.20% 5.30% State Unemployment Rate 10.2% 9.20% 8.20% 7.10% 5.90% U.S. Unemployment Rate 8.90% 8.10% 7.40% 6.20% 5.30%

Source: State of Georgia Department of Labor, Labor Information Systems, and U.S. Department of Labor, Bureau of Labor Statistics.


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LEGAL MATTERS Litigation Like other similar bodies, the School District is subject to a variety of suits and proceedings arising in the ordinary conduct of its affairs. The School District, after reviewing the current status of all pending and threatened litigation relating to the School District with its counsel, Wiggins Law Office, believes that, while the outcome of litigation cannot be predicted, the final settlement of lawsuits which have been filed and of any actions or claims pending or threatened against the School District or its officials in such capacity are adequately covered by insurance or sovereign immunity or will not have a material adverse effect upon the financial position or results of operations of the School District.

There is no litigation now pending or, to the knowledge of the Board of Education, threatened against the School District which seeks to restrain or enjoin the issuance or delivery of the Bonds, the imposition of the Educational Sales Tax, the assessment and collection of an ad valorem tax for payment of debt service on the Bonds, or the use of the proceeds from the sale of the Bonds, or which questions or contests the validity of the Bonds or the proceedings or authority under which they are to be issued. Neither the creation, organization or existence of the School District or the Board of Education nor the title of the present members or other officials of the Board of Education to their respective offices is being contested or questioned.

Legal Proceedings Validation of Bonds. In accordance with the law of the State of Georgia, the Bonds and the security therefor were confirmed and validated by judgment of the Superior Court of Catoosa County, Georgia, on May 18, 2016, Civil Action No. 2016SUCV00513. Under Georgia law, the judgment of validation is forever conclusive against the School District with respect to such validation of the Bonds and the security therefor. Opinions of Counsel. All legal matters incidental to authorization and issuance of the Bonds are subject to the approval of Gray Pannell & Woodward LLP, Savannah, Georgia, Bond Counsel. It is anticipated that the approving opinion will be in substantially the form included in Appendix B. Certain legal matters will be passed upon for the School District by its counsel, Wiggins Law Office, Ringgold, Georgia. The payment of legal fees is contingent upon issuance of the Bonds. The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys or law firms rendering the opinion as to the legal issues explicitly addressed therein. By rendering a legal opinion the attorney or law firm does not become an insurer or guarantor of the transaction opined upon, or of the future performance of parties to such transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. Tax Status Federal Tax Exemption. In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings, and judicial decisions, and assuming, among other things, the accuracy of certain representations and the continued compliance with certain covenants and tax law requirements, interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific tax preference item for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is included in adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations.

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State Tax Exemption. In the opinion of Bond Counsel, interest on the Bonds is exempt from present State of Georgia income taxation.

Maintenance of Tax Status. The Internal Revenue Code of 1986, as amended (the “Code”), and

the regulations promulgated thereunder contain a number of restrictions, conditions and requirements that must be satisfied subsequent to the issuance of the Bonds in order for the interest thereon to be and remain excludable from gross income for federal income tax purposes. Examples include the requirement that, unless an exception applies, the School District, acting by and through the Board of Education of Catoosa County rebate certain excess earnings on proceeds and amounts treated as proceeds of the Bonds to the United States Treasury Department; restrictions on the investment of such proceeds and other amounts; and certain restrictions on the ownership and use of the facilities financed or refinanced with the proceeds of the Bonds. The foregoing is not intended to be an exhaustive listing of the post-issuance tax compliance requirements of the Code, but is illustrative of the requirements that must be satisfied subsequent to the issuance of the Bonds to maintain the exclusion of interest on the Bonds from gross income for federal income tax purposes. Failure to comply with such requirements may cause the inclusion of interest on the Bonds in the gross income of the holders thereof for federal income tax purposes retroactively to the date of issuance of the Bonds. The School District has covenanted to comply with each such requirement of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The opinion of Bond Counsel is subject to the condition that the School District complies with all such requirements. Bond Counsel has not been retained to monitor compliance with the described post-issuance tax requirements subsequent to the issuance of the Bonds.

Bond Counsel gives no assurance that any future legislation or clarifications or amendments to

the Code, if enacted into law, will not cause the interest on the Bonds to be subject, directly or indirectly, to federal income taxation or otherwise prevent the holders of the Bonds from realizing the full current benefit of the tax status of the interest on the Bonds. During recent years, legislative proposals have been introduced in Congress, and in some cases have been enacted, that altered or could alter certain federal tax consequences of owning obligations similar to the Bonds. In some cases, these proposals have contained provisions that were to be applied on a retroactive basis. It is possible that legislation could be introduced in the near term that, if enacted, could change the federal tax consequences of owning the Bonds and, whether or not enacted, could have an adverse effect upon their market value. Prospective purchasers of the Bonds are encouraged to consult their own tax advisors regarding any pending or proposed federal legislation, regulatory initiatives or litigation. The opinion expressed by Bond Counsel is based upon existing law, legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Bonds, cover certain matters not directly addressed by such authorities, and represent Bond Counsel’s judgment as to the treatment of the Bonds for federal income tax purposes. Such opinions are not binding on the Internal Revenue Service (the “IRS”) or the courts. Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation, regulatory initiatives or litigation. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the School District or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The School District has covenanted, however, to comply with the requirements of the Code.

Bond Counsel’s engagement with respect to the Bonds ends with the issuance of the Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the Issuer or the beneficial owners of the Bonds regarding the tax-exempt status of the Bonds in the event of an audit examination by the IRS. Under current procedures, parties (such as the beneficial owners) other than the School District and its appointed counsel would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of The Bonds is

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difficult, obtaining an independent review of IRS positions with which the School District legitimately disagrees may not be practicable. Any action of the IRS, including but not limited to selection of the Bonds for audit, or the course or result of such audit, or an audit of bonds presenting similar tax issues may affect the market price for, or the marketability of, the Bonds, and may cause the School District or the beneficial owners of the Bonds to incur significant expense.

As to certain questions of fact material to the opinion of Bond Counsel, Bond Counsel has relied upon representations and covenants made on behalf of the School District and certificates of appropriate officers and public officials (including certifications as to the use of proceeds of the Bonds and of the property financed or refinanced thereby).

Reference is made to the proposed form of opinion of Bond Counsel relating to the Bonds

attached hereto in APPENDIX B for the complete text thereof. See also “LEGAL MATTERS” herein. Premium Bonds. The Bonds purchased, whether at original issuance or otherwise, for an amount

higher than their principal amount payable at maturity (or, in some cases, at their earlier call date) (the “Premium Bonds”) will be treated as having amortizable bond premium. Section 171(a) of the Code provides rules under which a bond premium may be amortized and a deduction allowed for the amount of the amortizable bond premium for a taxable year. Under § 171(a)(2) of the Code, no deduction is allowable for the amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is excludable from gross income. Under § 1016(a)(5) of the Code, the purchaser’s basis in a Premium Bond will be reduced by the amount of the amortizable bond premium disallowable as a deduction under § 171(a)(2) of the Code. Proceeds received from the sale, exchange, redemption, or payment of a Premium Bond in excess of the owner’s adjusted basis (as reduced pursuant to § 1016(a)(5) of the Code) will be treated as a gain from the sale or exchange of such Premium Bond and not as interest.

The federal income tax treatment of bond premium under the Code, including the determination

of the amount of amortizable bond premium that is allocable to each year, is complicated and holders of Premium Bonds should consult an independent tax advisor in order to determine the federal income tax consequences to such holders of purchasing, holding, selling, or surrendering a Premium Bond at its maturity.

Other Tax Consequences. Prospective purchasers of the Bonds should be aware that ownership of

the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, but not limited to, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with “excess net passive income,” foreign corporations subject to the branch profits tax, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry the Bonds. Bond Counsel has not expressed an opinion regarding the collateral federal income tax consequences that may arise with respect to the Bonds. Prospective purchasers of the Bonds should also be aware that ownership of the Bonds may result in adverse tax consequences under the laws of various states. Prospective purchasers of the Bonds should consult independent advisors as to the consequences of owning the Bonds, including the effect of such ownership under applicable state and local laws and any collateral federal income tax and state tax consequences.

Information Reporting and Backup Withholding. Interest paid on the Bonds is subject to

information reporting to the Internal Revenue Service in a manner similar to interest paid on taxable obligations. This reporting requirement does not affect the excludability of interest on the Bonds from gross income for federal income tax purposes, however, in conjunction with that information reporting requirement, the Code subjects certain non-corporate owners of The Bonds, under certain circumstances, to “backup withholding” at the fourth lowest rate applicable to unmarried individuals with respect to

45

payments on the Bonds and proceeds from the sale of the Bonds. Any amounts so withheld would be refunded or allowed as a credit against the federal income tax of such owner of The Bonds. This backup withholding generally applies if the owner of The Bonds (i) fails to furnish the paying agent (or other person who otherwise would be required to withhold tax from such interest payments) such owner’s social security number or other taxpayer identification number (“TIN”), (ii) furnishes the paying agent an incorrect TIN, (iii) fails to properly report interest, dividends, or other “reportable payments” as defined in the Code, or (iv) under certain circumstances fails to provide the paying agent or such owner’s securities broker with a certified statement, signed under penalty of perjury, that the TIN provided is correct and that such owner is not subject to backup withholding. Prospective purchasers of the Bonds also may wish to consult with independent tax advisors with respect to the need to furnish certain taxpayer information in order to avoid backup withholding and the procedures for obtaining exemptions from backup withholding.

Disposition of the Bonds. Unless a non-recognition provision of the Code applies, the sale,

exchange, redemption, retirement, reissuance or other disposition of a Bond may result in a taxable event for federal income tax purposes.

PURCHASE, OWNERSHIP, SALE, OR DISPOSITION OF THE BONDS AND THE RECEIPT

OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE HOLDERS OF THE BONDS. PROSPECTIVE PURCHASERS OF THE BONDS SHOULD CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD.


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MISCELLANEOUS Rating Standard & Poor’s Ratings Services, A Division of The McGraw-Hill Companies, Inc., has assigned the rating of “AA+” to the Bonds, based upon the School District’s participation in the State of Georgia Intercept Program. See “THE BONDS, -Security and Sources of Payment for the Bonds, -Additional Security Provided by State of Georgia Intercept Program. Standard & Poor’s Ratings Services has assigned an underlying rating (without regard to the State of Georgia Intercept Program) of “AA-” to the Bonds. The ratings reflect only the views of the rating agency. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies, and assumptions of its own. An explanation of the significance of the ratings may be obtained from the rating agency furnishing such rating. The rating agency may be contacted as follows: Standard & Poor’s, A Division of The McGraw-Hill Companies, Ratings Services, 55 Water Street, 38th Floor, New York, New York 10041, telephone (212) 438-2074. There is no assurance that the ratings will remain unchanged for any given period of time or that either or both will not be revised downward or withdrawn entirely by the rating agency furnishing the same, if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of a rating may have an adverse effect on the liquidity and market price of the Bonds. Underwriting The Bonds were purchased at a competitive sale by the purchaser shown on the cover page of this Official Statement. The purchaser has agreed, subject to certain conditions, to purchase the Bonds at a price of $46,387,610.70, which represents the par amount of the Bonds, $40,000,000.00, less Underwriter’s Discount of $58,888.00, plus Original Issue Premium of $6,446,498.70. The initial public offering yields or prices of the Bonds are shown on the front page of this Official Statement and may be changed from time to time by the purchaser. The purchaser may also allow concessions from the public offering prices to certain dealers and others. The Underwriter may offer and sell the Bonds to other dealers and other purchasers at prices lower than the public offering prices stated on the cover hereof. The initial public offering prices may be changed from time to time by the Underwriter. Financial Advisor Davenport & Company LLC, Woodstock, Georgia, has been employed by the School District as its financial advisor for the offering. The financial advisor has not conducted a detailed investigation of the affairs of the School District to determine the completeness or accuracy of this Official Statement. Because of its limited participation, the financial advisor has not independently verified any of the data contained herein and has no responsibility for the accuracy or completeness thereof. Continuing Disclosure Securities and Exchange Commission Rule 15c2-12(b)(5) (the “Rule”) under the Securities Exchange Act of 1934 imposes continuing disclosure obligations on the issuers of certain state and municipal securities to permit participating underwriters to offer and sell the issuer’s securities. In order to assist the Underwriter of the Bonds in complying with the Rule, the Board of Education will sign a

47

Continuing Disclosure Certificate on the date of issuance and delivery of the Bonds, under the provisions of which it shall covenant for the benefit of the beneficial owners of the Bonds to provide (i) certain financial information and/or operating data relating to the School District (the “Annual Report”) and (ii) notices of the occurrence of certain enumerated events, if material. The Annual Report and the notices of material events will be filed electronically with the Electronic Municipal Market Access website (“EMMA”), an Internet based electronic filing system supported by the Municipal Securities Rulemaking Board (“MSRB”). The Annual Report shall contain or incorporate by reference, among other items, the general purpose financial statements of the School District for the prior Fiscal Year. The School District’s current fiscal year began on July 1, 2015, and will end June 30, 2016. The specific nature of the information to be contained in the Annual Report or in the notices of material events is in “Appendix C: FORM OF THE CONTINUING DISCLOSURE CERTIFICATE.” The Board of Education is in compliance in all material respects with its previous undertakings with regard to the Rule to provide annual reports or notices of material events. The School District has been responsible for continuing disclosure for its outstanding GENERAL

OBLIGATION SALES TAX BONDS, SERIES 2011 (the “Series 2011 Bonds”), pursuant to a continuing disclosure certificate executed by the School District at the closing of the Series 2011 Bonds. In the last five years, the School District has had several instances of late filings for the Series 2011 Bonds as follows: 1. The 2011 Annual Report and audit for the fiscal year ended on June 30, 2011 was posted on EMMA on January 1, 2013. The School District did not file a notice of failure and the filing was late. 2. On July 12, 2013, the School District filed a notice with EMMA stating that its Annual Report for 2012 would be filed by August 30, 2013. The 2012 Annual Report was filed on September 12, 2013. 3. On December 12, 2013, the School District filed a notice with EMMA stating that its Annual Report for 2013 would be filed by March 31, 2014. On July 23, 2014, the School District filed a notice with EMMA stating that its Annual Report for 2013 would be filed by August 31, 2014. The 2013 Annual Report and unaudited financials were filed on July 23, 2014, and audited financials were filed on September 10, 2014. The School District has implemented an internal procedure to ensure future filings are completed and filed with EMMA in a timely manner and to ensure if the School District learns of incomplete or late filings to take remedial action immediately to provide the information. Financial Statements The general purpose financial statements of the Board of Education as of June 30, 2015, and for the year then ended, included as Appendix A, have been audited by the State of Georgia Department of Audits, Atlanta, Georgia, to the extent and for the period indicated in its report thereon which appears in such appendix. Such financial statements have been included herein in reliance upon the report of the State of Georgia Department of Audits, given upon the authority of such agency as experts in accounting and auditing. The State of Georgia Department of Audits, as a matter of policy, does not sign written consents to the inclusion of its audit reports in Official Statements and, pursuant to such policy, has not signed and will not sign a written consent to the inclusion of its audit report in Appendix A. The State of Georgia Department of Audits could use the defense of sovereign immunity against any claim based upon its negligence in performing the audit of the Board of Education’s financial statements.

48

Miscellaneous Insofar as any statement in this Official Statement involves matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations of fact. No representation is made that any of the statements will be realized. Neither this Official Statement nor any statement which may have been made orally or in writing is to be construed as a contract with the Holders of the Bonds. Use of the words “shall,” “must,” or “will” in summaries of documents or laws in this Official Statement to describe future events or continuing obligations is not intended as a representation that such event will occur or obligation will be fulfilled but only that the document or law contemplates or requires such event to occur or obligation to be fulfilled. Certification The execution and delivery of this Official Statement, and its distribution and use by the Underwriter, have been duly authorized and approved by the Board of Education. CATOOSA COUNTY SCHOOL DISTRICT

By: /s/ Don Dycus Chairman Board of Education of Catoosa County

Appendix A FINANCIAL STATEMENTS OF THE CATOOSA COUNTY SCHOOL DISTRICT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 The general purpose financial statements of the Catoosa County School District as of June 30, 2015, and for the year then ended, included as this Appendix A, have been audited by the State of Georgia Department of Audits, Atlanta, Georgia, to the extent and for the period indicated in its report thereon which appears in this Appendix A. Such financial statements have been included herein in reliance upon the report of the State of Georgia Department of Audits, given upon the authority of such agency as experts in accounting and auditing. The State of Georgia Department of Audits, as a matter of policy, does not sign written consents to the inclusion of its audit reports in Official Statements and, pursuant to such policy, has not signed and will not sign a written consent to the inclusion of its audit report in this Appendix A. The State of Georgia Department of Audits could use the defense of sovereign immunity against any claim based upon its negligence in performing the audit of the Catoosa County School District’s financial statements.

#######################

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CATOOSA COUNTY BOARD OF EDUCATION RINGGOLD, GEORGIA

ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 (Including Independent Auditor's Reports)

CATOOSA COUNTY BOARD OF EDUCATION

- TABLE OF CONTENTS - Page

SECTION I

FINANCIAL INDEPENDENT AUDITOR'S REPORT

REQUIRED SUPPLEMENTARY INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS i EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS A STATEMENT OF NET POSITION 1 B STATEMENT OF ACTIVITIES 2 FUND FINANCIAL STATEMENTS C BALANCE SHEET GOVERNMENTAL FUNDS 4 D RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION 5 E STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS 6 F RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES 7 G STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS 8 H NOTES TO THE BASIC FINANCIAL STATEMENTS 9

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION 1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY 33

TEACHERS’ RETIREMENT SYSTEM OF GEORGIA 2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

EMPLOYEES’ RETIREMENT SYSTEM OF GEORGIA 34


- TABLE OF CONTENTS - Page

SECTION I

FINANCIAL SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

3 SCHEDULE OF CONTRIBUTIONS – TEACHERS’ RETIREMENT SYSTEM OF GEORGIA 36 4 SCHEDULE OF CONTRIBUTIONS – EMPLOYEES’ RETIREMENT SYSTEM OF GEORGIA 38 5 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 40 6 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND 41

SUPPLEMENTARY INFORMATION 7 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 42 8 SCHEDULE OF STATE REVENUE 44 9 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 45

10 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

BY PROGRAM 47

SECTION II

COMPLIANCE AND INTERNAL CONTROL REPORTS INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133

SECTION III

AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SECTION IV

FINDINGS AND QUESTIONED COSTS

SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I

FINANCIAL

DEPARTMENT OF AUDITS AND ACCOUNTS

270 Washington Street, S.W., Suite 1-156

Atlanta, Georgia 30334-8400

Greg S. Griffin STATE AUDITOR (404) 656-2174

May 26, 2016 Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Catoosa County Board of Education

INDEPENDENT AUDITOR'S REPORT Ladies and Gentlemen: Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Catoosa County Board of Education, as of and for the year ended June 30, 2015, and the related notes to the financial statements (Exhibits A through H), which collectively comprise the Board's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the 2015ARL-11

effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Catoosa County Board of Education, as of June 30, 2015, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As described in Note 2 to the financial statements, in 2015, the Catoosa County Board of Education adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68. The School District restated beginning Net Position for the cumulative effect of these accounting changes. Our opinion is not modified with respect to this matter. As discussed in Note 2 to the financial statements, in 2015, the Catoosa County Board of Education restated the prior period financial statements to correct misstatements. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, Schedules of Proportionate Share of the Net Pension Liability, Schedules of Contributions to Retirement Systems, Notes to the Required Supplementary Information and the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual as presented on pages i through x and pages 33 through 41, respectively, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2015ARL-11

Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Catoosa County Board of Education's basic financial statements. The accompanying supplementary information, consisting of Schedules 7 through 10, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. The accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 26, 2016, on our consideration of the Catoosa County Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Catoosa County Board of Education's internal control over financial reporting and compliance. A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.

Respectfully submitted,

Greg S. Griffin State Auditor

GSG:er 2015ARL-11

CATOOSA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015

i

INTRODUCTION The discussion and analysis of the Catoosa County Board of Education’s (the Board) financial performance provides an overview of the Board’s financial activities for the fiscal years ended June 30, 2015 and June 30, 2014. The intent of this discussion and analysis is to look at the Board’s financial performance as a whole. Readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding of the Board’s financial performance. FINANCIAL HIGHLIGHTS Key financial highlights for the fiscal years 2015 and 2014 are as follows:

On the District-wide financial statements, the assets and deferred outflow of resources of the

Board exceeded liabilities and deferred inflow of resources by $107.6 million and $187.2 million, respectively, for the fiscal years ended June 30, 2015 and 2014. Of these amounts, $3,437,757 and $3,458,076, respectively, for fiscal years 2015 and 2014 are available for spending at the Board’s discretion. The amounts for fiscal years 2015 and 2014 do not reflect the effects of the restatement of Net Position as described in Note 2.

The Board had $105.2 million and $106.4 million in expenses relating to governmental

activities for the fiscal years ended June 30, 2015 and June 30, 2014, respectively. Only $65.4 million and $61.6 million of the above mentioned expenses for 2015 and 2014 were offset by program specific charges for services, grants and contributions. General revenues (primarily property and sales taxes) of $49.3 million and $48.5 million, respectively, for 2015 and 2014, along with fund balance were adequate to provide for these programs.

The current ratio, which measures the Board’s ability to transform current assets into cash and

pay its short- term liabilities, was 2.79 and 2.73 for the fiscal years ended June 30, 2015 and June 30, 2014, respectively. Generally, a ratio greater than 2.0 is considered very financially stable.

The General Fund (the primary operating fund), presented on a current financial resource basis, ended the fiscal year with a fund balance of $10.9 million, an increase of $977,841 from the June 30, 2014 fund balance of $9.9 million.

OVERVIEW OF THE FINANCIAL STATEMENTS This annual report consists of three parts; management's discussion and analysis, the basic financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the Board of Education. These include the District-wide and fund financial statements. The District-wide financial statements include the Statement of Net Position and Statement of Activities. These statements provide information about the activities of the Board presenting both short-term and long-term information about the overall financial status. The fund financial statements focus on individual parts, reporting the Board’s operation in more detail. The Governmental Funds statements disclose how basic services are financed in the short-term as well as what remains for future spending. The Fiduciary Funds statements provide information about the financial relationships in which the Board acts solely as a trustee or agent for the benefit of others.


ii

The fund financial statements reflect the Board’s most significant funds. For the years ending June 30, 2015 and 2014, the General Fund, the District-wide Capital Projects Fund, and the Debt Service Fund represent the most significant funds. The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements. District-Wide Statements The District-wide statements report information about the Board as a whole using accounting methods similar to those used by private-sector companies. The Statement of Net Position includes all of the Board’s assets and liabilities. All of the current fiscal year’s revenues and expenses are accounted for in the Statement of Activities regardless of when cash is received or paid. The two District-wide statements report the Board’s Net Position and how it has changed. Net Position, the difference between the Board’s assets and deferred outflows of resources, and liabilities and deferred inflows of resources, are one way to measure the Board’s overall financial health or position. Over time, increases or decreases in Net Position are an indication of whether its financial health is improving or deteriorating. Changes may be the result of many factors, including those not under the Board’s control, such as the property tax base, facility conditions, required educational programs and other factors. In the Statement of Net Position and the Statement of Activities, the Board has one distinct type of activity:

Governmental Activities – All of the Board’s programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, student activity accounts and various others.

Fund Financial Statements The Board’s fund financial statements provide detailed information about the most significant funds, not the Board as a whole. Some funds are required by State law and some by bond requirements. The Board’s major governmental funds are the General Fund, District-wide Capital Projects Fund, and Debt Service Fund. Governmental Funds - Most of the Board’s activities are reported in governmental funds, which focus on the determination of financial position and change in financial position, not on income determination. These funds are reported using the modified accrual method of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the Board’s general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are reconciled to the financial statements.


iii

Fiduciary Funds - The Board is the trustee, or fiduciary, for assets that belong to others, such as school clubs and organizations within the principals' accounts. The Board is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The Board excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations. FINANCIAL ANALYSIS OF THE BOARD AS A WHOLE Recall that the Statement of Net Position provides the perspective of the Board as a whole. Table 1 provides a summary of the Board’s net position for fiscal years 2015 and 2014.

Table 1

Net Position

Governmental Activities

Fiscal Percent Fiscal Percent

Year 2015 of Total Year 2014 (1) of Total

Assets

Current and Other Assets $ 35,654,186 15% $ 36,842,394 16%

Capital Assets, Net 197,811,084 85% 198,151,585 84%

Total Assets 233,465,270 100% 234,993,979 100%

Deferred Outf lows of Resources

Related to Defined Benefit Pension Plans 7,218,913 100% 0

Liabili ties

Current Liabilities 12,759,725 12% 13,503,019 28%

Long-Term Liabilities 94,336,408 88% 34,262,937 72%

Total Liabilit ies 107,096,133 100% 47,765,956 100%

Deferred Inf lows of Resources

Related to Defined Benefit Pension Plans 25,954,690 100% 0

Net Position

Net Investment in Capital Assets 177,483,412 165% 174,153,837 93%

Restricted 12,332,716 11% 9,616,110 5%

Unrestricted -82,182,768 -76% 3,458,076 2%

Total Net Position $ 107,633,360 100% $ 187,228,023 100%

(1) Fiscal year 2014 balances do not reflect the effects of the restatement of Net Position. See Note 2 in the Notes to the Basic Financial Statements for additional information.

During fiscal year 2015, The Board adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. Together, these two statements drastically changed the presentation of the District-wide balance sheet by requiring the reporting of the Board’s net pension liability and the deferred inflows and outflows associated with pension payments for all State pension programs in which the Board participates. The total liability effect of these pensions was $85,620,525


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for the year ended June 30, 2015. These liabilities exceeded the Board’s unrestricted net position of $3,437,757. Although this causes a large deficit balance in unrestricted net position, it should not be considered a financial weakness as these costs are spread out over multiple years well into the future. Table 2 shows the Changes in Net Position for fiscal years ending June 30, 2015 and June 30, 2014.


v

Table 2

Change i n Net Posi ti on


Fiscal Year Percent Fiscal Year Percent

2015 of Total 2014 (1) of Total

Revenues

Program Revenues:

Charges for Services $ 2,637,035 4% $ 2,571,712 4%Operating Grants and Contributions 61,439,249 94% 58,755,915 95%Capital Grants and Contributions 1,295,495 2% 287,196 1%

Total Program Revenues 65,371,779 100% 61,614,823 100%

General Revenues:

Property Taxes 29,070,511 59% 29,163,176 60%

Sales Taxes 10,250,790 21% 9,437,189 19%

Grants and Contributions not

Restricted to Specific Programs 6,341,355 13% 5,876,601 12%

Investment Earnings 53,151 0% 80,766 0%

Miscellaneous 3,554,713 7% 3,990,020 9%

Total General Revenues 49,270,520 100% 48,547,752 100%

Total Revenues 114,642,299 110,162,575

Pr ogr am Expe nses:

Instruction 66,561,294 63% 67,346,556 63%

Support Services

Pupil Services 4,121,622 4% 4,020,813 4%

Improvement of Instructional Services 2,342,587 2% 2,406,807 2%

Educational Media Services 1,753,484 2% 1,865,198 2%

General Administration 1,336,878 2% 1,159,921 1%

School Administration 6,982,394 7% 7,027,408 7%

Business Administration 575,463 1% 646,672 1%

Maintenance and Operation of Plant 8,664,477 8% 8,381,976 8%

Student Transportation Services 5,153,894 5% 5,296,772 5%

Central Support Services 503,508 0% 488,273 0%

Other Support Services 1,292,834 1% 1,360,761 1%

Operations of Non-Instructional Services

Community Services 500,370 0% 481,859 0%

Food Services 5,191,284 5% 5,374,805 5%

Interest on Debt 221,105 0% 493,778 1%

Total Expenses 105,201,194 100% 106,351,599 100%

Increase in Net Position 9,441,105 3,810,976

Beginning Net Position, Restated 98,192,255 183,417,047

Ending Net Position $ 107,633,360 $ 187,228,023

(1) Fiscal year 2014 balances do not reflect the effects of the restatement of Net Position. See Note 2 in

the Notes to the Basic Financial Statements for additional information.


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Program revenues, in the form of charges for services, operating grants and contributions and capital grants and contributions increased $3,756,956 for governmental activities. This increase is largely due to an increase in funds earned through the State Quality Basic Education (QBE) Funding Formula and capital grants received from the Georgia State Financing and Investment Commission (GSFIC) to offset certain construction projects. The Board received $1.3 million from GSFIC and were aided in a decrease in the QBE Austerity Reduction from $7.8 million in fiscal year 2014 to $5.1 million in fiscal year 2015. General revenues increased by $722,768 during fiscal year 2015, despite a small rollback of the millage rate from 18.713 in 2014 to 18.692 in 2015. Continued development of the county and economic improvement resulted in an extra $800,000, approximately, of sales tax revenue, and the Board received approximately $500,000 more in equalization funding. The Board continues to analyze spending patterns and look for areas where reductions can be made without affecting the level of education provided. As a result of these savings, the Board was able to restore two furlough days in 2015 to bring the total down to three. Table 3 shows the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the Board’s taxpayers by each activity.

Tabl e 3

Gover nmental Acti v i ti es

Total Cost of Services Net Cost of Services

Fiscal Fiscal Fiscal Fiscal

Year 2015 Year 2014 (1) Year 2015 Year 2014 (1)

Instruction $ 66,561,294 $ 67,346,556 $ 18,355,210 $ 23,341,897

Support Services:

Pupil Services 4,121,622 4,020,813 3,366,486 3,007,227

Improvement of Instructional Services 2,342,587 2,406,807 1,109,554 1,078,687

Educational Media Services 1,753,484 1,865,198 514,244 613,094

General Administration 1,336,878 1,159,921 -302,623 -451,329

School Administration 6,982,394 7,027,408 4,378,420 4,440,225

Business Administration 575,463 646,672 574,921 645,228

Maintenance and Operation of Plant 8,664,477 8,381,976 5,725,488 5,469,327

Student Transportation Services 5,153,894 5,296,772 4,164,715 4,211,463

Central Support Services 503,508 488,273 501,074 481,786

Other Support Services 1,292,834 1,360,761 802,534 848,747

Operations of Non-Instructional Services:

Enterprise Operations 500,370 481,859 317,563 340,861

Food Services 5,191,284 5,374,805 100,724 215,785

Interest on Short-Term and Long-Term Debt 221,105 493,778 221,105 493,778

Total Expenses $ 105,201,194 $ 106,351,599 $ 39,829,415 $ 44,736,776




vii

Although program revenues make up a majority of the funding, the Board is still dependent upon tax revenues for governmental activities. For 2015, 39% of instruction and support activities were supplemented by taxes and other general revenues compared to 43% in 2014. It exemplifies the State’s stance that the public is becoming an equal partner in bearing the cost of educating Georgia’s children. FINANCIAL ANALYSIS OF THE BOARD’S FUNDS The Board’s governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues and other financing sources of $126.2 million and total expenses and other financing uses of $126.9 million. There was a decrease in the fund balance totaling $0.6 million for the governmental funds as a whole. The $10.9 million fund balance in the General Fund reflects that the Board continues to be able to adequately meet current costs. General Fund Budgeting Highlights The Board’s budget is prepared according to Georgia Law. The most significant budgeted fund is the General Fund, funded primarily through state revenue and local property tax revenue. During the course of fiscal years 2015 and 2014, the Board amended its general fund budget as needed. During fiscal year 2015 the General Fund had final actual revenues totaling $104.1 million, which represented an increase from the original budgeted amount of $98.1 million by $6.0 million. This difference (final actual vs. original budget) was due to conservative estimates by the Board that were exceeded slightly in every major category. Final actual expenditures during fiscal year 2015 totaling $103.1 million represented an increase from the original budgeted amount of $102.3 million by $0.8 million. The increase in actual expenditures versus original budget expenditures was due primarily to higher than expected costs for pupil services and media services. General fund revenues and other financing sources exceeded expenditures by $977,841 for the fiscal year 2015. CAPITAL ASSETS At the fiscal years ended June 30, 2015 and June 30, 2014, the School District had $197.8 million and $198.2 million, respectively, invested in a broad range of capital assets, including land, buildings and furniture and equipment for its governmental activities. For the first time in several years, the Board saw asset depreciation exceed the acquisition of new assets due to the winding down of ESPLOST IV funds. These funds finance all major additions and renovations of the School System. Table 4 breaks down the asset balances, by class, net of accumulated depreciation.


viii

Table 4

Capital Assets

(Net of Depreciation)


Fiscal Fiscal

Year 2015 Year 2014 (1)

Land $ 6,523,176 6,253,176

Land Improvements 5,807,215 5,927,865

Buildings and Improvements 177,646,791 169,540,915

Equipment 7,617,948 7,126,018

Construction in Progress 215,954 9,303,611

Total $ 197,811,084 198,151,585



The construction in progress balance at June 30, 2015 consists of the following projects:

Battlefield Elementary School VCT Flooring Lakeview-Fort Oglethorpe High School VCT Flooring Boynton Elementary School Fire Alarm System Battlefield Elementary School Fire Alarm System Graysville Elementary School Fire Alarm System

DEBT ADMINISTRATION The Board did not issue any general obligation bonds in fiscal year 2015. As of June 30, 2015, the Board had $25.4 million in general obligation bonds outstanding with $8.0 million due within one year. The bonds will be repaid from sales tax proceeds of a Special Purpose Local Option Sales Tax (SPLOST) that began July 1, 2012 and ends June 30, 2017. Table 5 summarizes bond debt outstanding at June 30, 2015 and 2014.

Table 5

Long-Term Debt Outstanding


Fiscal Fiscal

Year 2015 Year 2014

General Obligations Bonds $ 25,385,000 $ 32,885,000

The Board’s bonds have been assigned a rating of “AA+” by Standard and Poor’s based on the Board’s participation in the Georgia State Intercept Program. Standard and Poor’s has assigned an underlying rating (without regard to the Georgia State Intercept Program) of “AA-” to the bonds.


ix

The Board entered into three new capital leases in fiscal year 2015. Capital leases are generally used as a way to purchase buildings and equipment without a large lump sum payment. The leases are paid over a period of 3-5 years. Table 6 summarizes capital lease obligations outstanding at June 30, 2015 and 2014. A schedule of future payments can be found in the notes to the financial statements.

Table 6

Capital Leases Outstanding


Fiscal Fiscal

Year 2015 Year 2014 (1)

Capital Lease Obligations Outstanding $ 1,350,133 $ 0



CURRENT ISSUES In fiscal year 2016, the cost of the employer portion of TRS pension will increase approximately $600,000, and an increase in health insurance premiums for non-certified employees is expected to add another $750,000. In addition, revenues will again be cut as the State of Georgia imposes another QBE Austerity Reduction expected to cost the Board approximately $3.3 million in earned revenue, bringing the grand total of revenue lost since the cuts began in 2003 to more than $60.0 million. In spite of these hardships, the Board plans to reduce the number of furlough days from three to two for fiscal year 2016 and add numerous teaching positions to help combat increasing class sizes. Approximately 85% of general fund expenses, the main operating fund for the Board, were related to salaries and employee benefits for the year ended June 30, 2015. More than a third of certified personnel in the School District have 21 years or more of experience resulting in salaries at the highest possible state pay level. With such personnel heavy expenses, it is difficult to offset mandated expense increases such as TRS and health insurance premium expenses. The Board consistently evaluates how funds can be spent smarter and more effectively to ensure that Catoosa County students receive a quality education from effective personnel. The Board’s millage rate for fiscal year 2015 was 18.692. The net digest was relatively flat during fiscal years 2015 and 2014, ending a string of several years where it decreased annually. The net digest for fiscal year 2015 was $1.497 billion, which produced approximately $1,497,000 per mill. As shown in Table 3, property tax and sales tax are responsible for covering 39% of the Board’s costs. It is anticipated that this pressure to provide local monies to meet mandated educational requirements and operational costs will continue. The most significant challenge facing the Board is the relative uncertainty regarding how School Districts will be funded moving forward. The General Assembly is in the process of exploring new funding formulas that would likely cement in the austerity reductions received annually and change the way personnel salaries are calculated. It is uncertain at this point what type of financial impact these changes might have on the Board’s finances.


x

CONTACTING THE BOARD’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the Board’s finances and to show the Board’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact Blake Stansell, CPA, Finance Manager at the Catoosa County Board of Education, 307 Cleveland Street, Ringgold, Georgia 30736. You may also email your questions to [email protected].


STATEMENT OF NET POSITION

JUNE 30, 2015

EXHIBIT "A"

GOVERNMENTAL

ACTIVITIES

ASSETS

Cash and Cash Equivalents $ 25,017,623

Investments 21,500

Accounts Receivable, Net

Interest 1,799

Taxes 2,333,183

State Government 7,469,303

Federal Government 596,055

Other 19,535

Inventories 185,188

Prepaid Items 10,000

Capital Assets, Non-Depreciable 6,739,130

Capital Assets, Depreciable (Net of Accumulated Depreciation) 191,071,954

Total Assets 233,465,270

DEFERRED OUTFLOWS OF RESOURCES

Related to Defined Benefit Pension Plans 7,218,913

LIABILITIES

Accounts Payable 26,153

Salaries and Benefits Payable 11,957,258

Interest Payable 348,292

Claims Payable 408,608

Retainages Payable 2,211

Deposits and Unearned Revenues 17,203

Long-Term Liabilities

Due Within One Year 8,686,456

Due in More Than One Year 18,765,204

Net Pension Liability 66,884,748

Total Liabilities 107,096,133

DEFERRED INFLOWS OF RESOURCES

Related to Defined Benefit Pension Plans 25,954,690

NET POSITION

Net Investment in Capital Assets 177,483,412

Restricted for

Continuation of Federal Programs 545,595

Debt Service 9,155,890

Capital Projects 2,628,801

National Park Field Trips 2,430

Unrestricted (Deficit) -82,182,768

Total Net Position $ 107,633,360

The notes to the basic financial statements are an integral part of this statement.

- 1 -


STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED JUNE 30, 2015

CHARGES FOR

EXPENSES SERVICES

GOVERNMENTAL ACTIVITIES

Instruction $ 66,561,294 $ 272,710

Support Services

Pupil Services 4,121,622 230,274

Improvement of Instructional Services 2,342,587 3,111

Educational Media Services 1,753,484 37,551

General Administration 1,336,878

School Administration 6,982,394 54,689

Business Administration 575,463

Maintenance and Operation of Plant 8,664,477 64,647

Student Transportation Services 5,153,894

Central Support Services 503,508

Other Support Services 1,292,834 297,084

Operations of Non-Instructional Services

Community Services 500,370 180,476

Food Services 5,191,284 1,496,493

Interest on Short-Term and Long-Term Debt 221,105

Total Governmental Activities $ 105,201,194 $ 2,637,035

General Revenues

Taxes

Property Taxes

For Maintenance and Operations

Other Taxes

Sales Taxes

Special Purpose Local Option Sales Tax

For Capital Projects

Other Sales Tax

Grants and Contributions not Restricted to Specific Programs

Investment Earnings

Miscellaneous

Total General Revenues

Change in Net Position

Net Position - Beginning of Year, Restated

Net Position - End of Year


- 2 -

EXHIBIT "B"

NET (EXPENSES)

OPERATING CAPITAL REVENUES

GRANTS AND GRANTS AND AND CHANGES IN

CONTRIBUTIONS CONTRIBUTIONS NET POSITION

$ 46,765,024 $ 1,168,350 $ -18,355,210

519,430 5,432 -3,366,486

1,226,137 3,785 -1,109,554

1,201,689 -514,244

1,630,101 9,400 302,623

2,549,285 -4,378,420

542 -574,921

2,793,708 80,634 -5,725,488

989,179 -4,164,715

2,434 -501,074

193,216 -802,534

2,331 -317,563

3,568,504 25,563 -100,724

-221,105

$ 61,439,249 $ 1,295,495 -39,829,415

28,268,456

802,055

9,643,843

606,947

6,341,355

53,151

3,554,713

49,270,520

9,441,105

98,192,255

$ 107,633,360

PROGRAM REVENUES

- 3 -


BALANCE SHEET

GOVERNMENTAL FUNDS

JUNE 30, 2015

EXHIBIT "C"

DISTRICT-WIDE

CAPITAL DEBT

GENERAL PROJECTS SERVICE

FUND FUND FUND TOTAL

ASSETS

Cash and Cash Equivalents $ 13,733,678 $ 1,781,547 $ 9,502,398 $ 25,017,623

Investments 21,500 21,500


Interest 15 1,784 1,799

Taxes 1,483,718 849,465 2,333,183

State Government 7,469,303 7,469,303

Federal Government 596,055 596,055

Other 19,535 19,535

Inventories 185,188 185,188

Prepaid Items 10,000 10,000

Total Assets $ 23,518,992 $ 2,631,012 $ 9,504,182 $ 35,654,186

LIABILITIES

Accounts Payable $ 26,153 $ 26,153

Salaries and Benefits Payable 11,957,258 11,957,258

Retainages Payable $ 2,211 2,211

Deposits and Unearned Revenue 17,203 17,203

Total Liabilities 12,000,614 2,211 12,002,825

DEFERRED INFLOWS OF RESOURCES

Unavailable Revenue - Property Taxes 607,330 607,330

FUND BALANCES

Nonspendable 195,188 195,188

Restricted 362,837 2,628,801 $ 9,504,182 12,495,820

Assigned 1,101,967 1,101,967

Unassigned 9,251,056 9,251,056

Total Fund Balances 10,911,048 2,628,801 9,504,182 23,044,031

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 23,518,992 $ 2,631,012 $ 9,504,182 $ 35,654,186


- 4 -


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION

JUNE 30, 2015

EXHIBIT "D"

Total Fund Balances - Governmental Funds (Exhibit "C") $ 23,044,031

Amounts reported for Governmental Activities in the Statement of Net Position are

different because:

Capital Assets used in Governmental Activities are not financial resources and therefore

are not reported as assets in governmental funds. These assets consist of:

Land $ 6,523,176

Construction in Progress 215,954

Land Improvements 7,166,109

Buildings and Improvements 208,345,784

Equipment 14,231,465

Accumulated Depreciation -38,671,404

Total Capital Assets 197,811,084

Some liabilities, including net pension obligations, are not due and payable

in the current period and, therefore, are not reported in the funds.

Net Pension Liability -66,884,748

Deferred Outflows and Inflows of Resources related to pensions are

applicable to future periods and, therefore, are not reported in the governmental

funds. -18,735,777

Taxes that are not available to pay for current period expenditures are

deferred in the governmental funds.

Property Taxes 607,330

Long-Term Liabilities, including Bonds Payable, are not due and payable in the

current period and therefore are not reported as liabilities in the funds.

These consist of:

Bonds Payable $ -25,385,000

Accrued Interest Payable -348,292

Capital Leases Payable -1,350,133

Bond Premiums, Net of Amortization -716,527

Claims and Judgments Payable -408,608

Total Long-Term Liabilities -28,208,560

Net Position of Governmental Activities (Exhibit "A") $ 107,633,360


- 5 -


STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS

YEAR ENDED JUNE 30, 2015

EXHIBIT "E"

DISTRICT-WIDECAPITAL DEBT

GENERAL PROJECTS SERVICEFUND FUND FUND TOTAL

REVENUES

Property Taxes $ 29,332,359 $ 29,332,359Sales Taxes 606,947 $ 9,643,843 10,250,790State Funds 60,198,626 1,295,495 61,494,121Federal Funds 7,741,039 7,741,039Charges for Services 2,637,035 2,637,035Investment Earnings 33,360 6,638 $ 13,153 53,151Miscellaneous 3,509,943 44,770 3,554,713

Total Revenues 104,059,309 10,990,746 13,153 115,063,208

EXPENDITURES

CurrentInstruction 65,580,121 302,995 65,883,116Support Services

Pupil Services 4,244,620 4,244,620Improvement of Instructional Services 2,404,170 2,404,170Educational Media Services 1,823,038 1,823,038General Administration 1,311,845 12,828 1,324,673School Administration 7,273,453 7,273,453Business Administration 666,717 666,717Maintenance and Operation of Plant 7,816,835 1,296,666 9,113,501Student Transportation Services 4,442,883 443,074 4,885,957Central Support Services 517,618 517,618Other Support Services 1,314,922 1,314,922

Community Services 505,231 505,231Food Services Operation 5,136,380 5,136,380

Capital Outlay 3,251,220 3,251,220Debt Services

Principal 71,410 7,680,000 7,751,410Dues and Fees 825 825Interest 20,790 985,900 1,006,690

Total Expenditures 103,130,033 5,306,783 8,666,725 117,103,541

Excess of Revenues over (under) Expenditures 929,276 5,683,963 -8,653,572 -2,040,333

OTHER FINANCING SOURCES (USES)

Capital Leases 48,565 1,350,000 1,398,565Transfers In 9,753,539 9,753,539Transfers Out -9,753,539 -9,753,539

Total Other Financing Sources (Uses) 48,565 -8,403,539 9,753,539 1,398,565

Net Change in Fund Balances 977,841 -2,719,576 1,099,967 -641,768

Fund Balances - Beginning 9,933,207 5,348,377 8,404,215 23,685,799

Fund Balances - Ending $ 10,911,048 $ 2,628,801 $ 9,504,182 $ 23,044,031


- 6 -


RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF

REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

TO THE STATEMENT OF ACTIVITIES

JUNE 30, 2015

EXHIBIT "F"

Total Net Change in Fund Balances - Governmental Funds (Exhibit "E") $ -641,768

Amounts reported for Governmental Activities in the Statement of Activities are

different because:

Capital Outlays are reported as expenditures in Governmental Funds. However,

in the Statement of Activities, the cost of Capital Assets is allocated over

their estimated useful lives as depreciation expense. In the current period,

these amounts are:

Capital Outlay $ 4,290,133

Depreciation Expense -4,673,002

Excess of Capital Outlay over Depreciation Expense -382,869

Taxes reported in the Statement of Activities that do not provide current

financial resources are not reported as revenues in the funds. -261,848

Some of the Capital Assets acquired this year were financed with capital leases.

In Governmental Funds, a capital lease arrangement is considered a source

of financing, but in the Statement of Net Position, the lease obligation is

reported as a Long-Term Liability. -1,398,565

Repayment of Long-Term Debt is reported as an expenditure in Governmental

Funds, but the repayment reduces Long-Term Liabilities in the Statement of

Net Position. In the current year, these amounts consist of:

Bond Principal Retirements $ 7,500,000

Capital Lease Payments 251,410

Total Long-Term Debt Repayments 7,751,410

Some items reported in the Statement of Activities do not require the use of

current financial resources and therefore are not reported as expenditures in

Governmental Funds. The net adjustments consist of:

Accrued Interest Payable $ 125,000

Amortization of Bond Premium 661,410

Pension Expense 3,254,633

Claims and Judgements 333,702

Total Additional Expenditures 4,374,745

Change in Net Position of Governmental Activities (Exhibit "B") $ 9,441,105


- 7 -


STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS

JUNE 30, 2015

EXHIBIT "G"

AGENCY

FUNDS

ASSETS

Cash and Cash Equivalents $ 451,390


Other 50,385

Total Assets $ 501,775

LIABILITIES

Funds Held for Others $ 501,775


- 8 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS

JUNE 30, 2015

EXHIBIT "H"

- 9 -

NOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY

REPORTING ENTITY

The Catoosa County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The School District’s basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the Catoosa County Board of Education.

District-wide Statements: The Statement of Net Position and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.

The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District’s governmental activities.

Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District’s programs, such as office and maintenance personnel and accounting) are not allocated to programs.

Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

Fund Financial Statements: The fund financial statements provide information about the School District’s funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.

The School District reports the following major governmental funds:

General Fund is the School District’s primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund.

District-wide Capital Projects Fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST) and grants from Georgia State Financing and Investment Commission that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets.

Debt Service Fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest.


JUNE 30, 2015

EXHIBIT "H"

- 10 -

The School District reports the following fiduciary fund type:

Agency funds account for assets held by the School District as an agent for various funds, governments or individuals.

BASIS OF ACCOUNTING

The basis of accounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. The School District considers all intergovernmental revenues to be available if they are collected within 120 days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt and claims and judgments, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources. The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, both restricted and unrestricted resources are available to finance the program. It is the School District’s policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues. RESTATEMENT OF PRIOR YEAR NET POSITION For fiscal year 2015, the School District made several prior period adjustments due to the adoption of GASB Statement No. 68 and GASB Statement No. 71, as described in “New Accounting Pronouncements” below and due to omission of capital leases and capital assets acquired through capital leases. These items require the restatement of the June 30, 2014, net position in Governmental Activities. The result is a decrease in Net Position at July 1, 2014 of $89,035,768. These changes are in accordance with generally accepted accounting principles.


JUNE 30, 2015

EXHIBIT "H"

- 11 -

Net Position, July 1, 2014, as previously reported $ 187,228,023

Recognition of Prior Year Capital Leases -202,978

Recognition of Prior Year Capital Assets 42,368

Prior Period adjustment - Implementation of GASB 68:

Net pension liability (measurement date)

TRS $ -95,346,678

ERS -161,787 -95,508,465

Deferred Outlfows - School District's contribution made

during fiscal year 2014

TRS $ 6,626,065

ERS 7,242 6,633,307

Net Position, July 1, 2014, as restated $ 98,192,255

NEW ACCOUNTING PRONOUNCEMENTS

In fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. The provisions of this statement establish accounting and financial reporting standards for pensions that are provided to the employees of state and local governmental employers through pension plans that are administered through trusts. The adoption of this statement has a significant impact on the School District’s financial statements. As noted above, the School District restated beginning Net Position for the cumulative effect of this accounting change.

In fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 69, Government Combinations and Disposals of Government Operations. This statement provides specific accounting and financial reporting guidance for combinations in the governmental environment. This statement also requires that disclosures be made by governments about combination arrangements in which they engage and for disposals of government operations. The School District did not have any activities of this type during the fiscal year and the adoption of this statement does not have a significant impact on the School District’s financial statements.

In fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB No. 68. The objective of this statement is to improve accounting and financial reporting by addressing an issue in Statement No. 68, Accounting and Financial Reporting for Pensions, concerning transition provisions related to certain pension contributions made to defined benefit pension plans prior to implementation of statement. This statement amends paragraph 137 of Statement No. 68 which limited recognition of pension-related deferred inflows of resources at the transition to circumstances in which it is practical to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions. The adoption of this statement has a significant impact on the School District’s financial statements. As noted above, the School District restated beginning Net Position for the cumulative effect of this accounting change.


JUNE 30, 2015

EXHIBIT "H"

- 12 -

CASH AND CASH EQUIVALENTS

Composition of Deposits

Cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations.

INVESTMENTS

Composition of Investments

Investments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:

(1) Obligations issued by the State of Georgia or by other states,

(2) Obligations issued by the United States government,

(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,

(4) Obligations of any corporation of the United States government,

(5) Prime banker’s acceptances,

(6) The local government investment pool (Georgia Fund 1) administered by the State of Georgia, Office of the State Treasurer,

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions of the State of Georgia.

The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration of credit risks, interest rate risks or foreign currency risks.

RECEIVABLES

Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.


JUNE 30, 2015

EXHIBIT "H"

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PROPERTY TAXES

The Catoosa County Board of Commissioners adopted the property tax levy for the 2014 tax digest year (calendar year) on September 2, 2014 (levy date) based on property values as of January 1, 2014. Taxes were due on December 20, 2014 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2014 tax digest are reported as revenue in the governmental funds for fiscal year 2015. The Catoosa County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2015, for maintenance and operations amounted to $26,723,341.

The tax millage rate levied for the 2014 tax year (calendar year) for the Catoosa County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations 18.692 mills

Additionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $1,806,963 during fiscal year ended June 30, 2015.

SALES TAXES

Education Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $9,643,843 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum, and the sales tax must be re-authorized at least every five years. INVENTORIES

Food Inventories

On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.

PREPAID ITEMS

Payments made to vendors for services that will benefit periods subsequent to June 30, 2015, are recorded as prepaid items.

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art. During the fiscal year under review, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District.


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Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

Capitalization Estimated

Policy Useful Life

Land All N/A

Land Improvements $ 10,000 20 to 80 years

Buildings and Improvements $ 10,000 20 to 80 years

Equipment $ 10,000 5 to 15 years

Intangible Assets $ 100,000 10 to 20 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives, with the exception of intangible assets which are amortized. Amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, copyrights and internally generated software is computed using the straight-line method over the estimated useful lives of the assets, generally 10 to 20 years. DEFERRED OUTFLOWS/INFLOWS OF RESOURCES In addition to assets, the statement of net position and/or the balance sheet will report a separate section for deferred outflows of resources. This separate financial statement element, represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources (expense/expenditure) until then. Under the full accrual method of accounting, the School District has reported the deferred outflows of resources related to a defined benefit pension plan, as discussed in Note 16 – Retirement Plans. In addition to liabilities, the statement of net position and/or the balance sheet will report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and therefore will not be recognized as an inflow of resources (revenue) until that time. Under the full accrual method of accounting, the School District has reported deferred inflows of resources related to a defined benefit pension plan, as discussed in Note 16 – Retirement Plans. This item is reported only in the District-wide Statement of Net Position. Additionally, the School District has one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reporting only in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes and grants, and these amounts are deferred and will be recognized as an inflow of resources in the period in which the amounts become available.

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-wide financial statements, bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are recognized as an outflow of resources in the fiscal year in which the bonds are issued.


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In the fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Position.

PENSIONS

For purposes of measuring the Net Pension Liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Teachers’ Retirement System of Georgia (TRS), the Employees’ Retirement System of Georgia (ERS) and the Public School Employees Retirement System (PSERS) and additions to/deductions from TRS/ERS/PSERS’s fiduciary net position have been determined on the same basis as they are reported by TRS/ERS/PSERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. See Note 16 - Retirement Plans.

NET POSITION

The School District’s net position in the District-wide Statements is classified as follows:

Net Investment in Capital Assets - This represents the School District’s total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets.

Restricted Net Position - This represents resources for which the School District is legally or contractually obligated to spend resources for National Park field trips, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties.

Unrestricted Net Position - Unrestricted Net Position is the net amount of the assets, deferred outflows of resources, liabilities and deferred inflows of resources that are not included in the determination of Net Investment of Capital Assets and Restricted Net Position. Included in the net deficit reported is the School District’s Net Pension Liability of $66,884,748 which is required for financial reporting.

FUND BALANCES

The School District’s fund balances are classified as follows:

Nonspendable – Amounts that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact.

Restricted – Constraints are placed on the use of resources are either (1) externally imposed conditions by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation.

Committed – Amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board of Education. The Board of Education is the School District’s highest level of decision-making authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.


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Assigned – Amounts that are constrained by the School District’s intent to be used for specific purposes, but are neither restricted nor committed. The intent should be expressed by (1) the Board of Education or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes.

Unassigned – The residual classification for the General Fund. This classification represents fund balances that have not been assigned to other funds and that have not been restricted, committed, or assigned to specific purposes within the General Fund.

Fund Balances of the Governmental Funds at June 30, 2015, are as follows:

Nonspendable

Inventories $ 185,188

Prepaid Assets 10,000 $ 195,188

Restricted

Continuation of Federal Programs $ 360,407

Capital Projects 2,628,801

Debt Service 9,504,182

National Park Field Trips 2,430 12,495,820

Assigned

School Activity Accounts 1,101,967

Unassigned 9,251,056

Fund Balance, June 30, 2015 $ 23,044,031

When multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds. USE OF ESTIMATES The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. NOTE 3: BUDGETARY DATA

The budget is a complete financial plan for the School District’s fiscal year, and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the General Fund. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds is prepared and adopted by fund, function and object. The legal level of budgetary control was established by the Board at the aggregate function level. The budget for the General Fund was prepared in accordance with accounting principles generally accepted in the United States of America.


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The budgetary process begins with the School District’s administration presenting an initial budget for the Board’s review. The administration makes revisions as necessary based on the Board’s guidelines, and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality, as well as the School District’s website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. The approved budget is then submitted, in accordance with provisions of Official Code of Georgia Annotated section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. The Superintendent is authorized by the Board to approve adjustments of no more than 5 percent of the amount budgeted for expenditures in any budget function for any fund. The Superintendent shall report any such adjustments to the Board. If expenditure of funds in any budget function for any fund is anticipated to be more than 5 percent of the budgeted amount, the Superintendent shall request Board approval for the budget amendment. Under no circumstance is the Superintendent or other staff person authorized to spend funds that exceed the total budget without approval by the Board.

See Schedule 6 – General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget to Actual for a detail of any over/under expenditures during the fiscal year under review.

NOTE 4: DEPOSITS

COLLATERALIZATION OF DEPOSITS

Official Code of Georgia Annotated (O.C.G.A.) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. Section 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110 percent of the daily pool balance.

Acceptable security for deposits consists of any one of or any combination of the following:

(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,

(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,

(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,

(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,

(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by or securities guaranteed by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.


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CATEGORIZATION OF DEPOSITS

Custodial credit risk is the risk that in the event of a bank failure, the School District’s deposits may not be returned to it. The School District does not have a deposit policy for custodial credit risk. At June 30, 2015, the School District had deposits with a carrying amount of $25,490,513, which includes $21,500 in Certificates of Deposit that are reported as Investments, and a bank balance of $28,800,229. The bank balances insured by Federal depository insurance were $10,343,898, and the bank balances collateralized with securities held by the pledging institution or by the pledging financial institution's trust department or agent in the School District's name were $18,456,331.

NOTE 5: NON-MONETARY TRANSACTIONS

The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 – Inventories.

NOTE 6: CAPITAL ASSETS

The following is a summary of changes in the Capital Assets during the fiscal year:

Restated

Balances Balances

July 1, 2014 Increases Decreases June 30, 2015


Capital Assets, Not Being Depreciated:

Land $ 6,253,176 $ 270,000 $ 6,523,176

Construction in Progress 9,303,611 1,773,593 $ 10,861,250 215,954

Total Capital Assets Not Being Depreciated 15,556,787 2,043,593 10,861,250 6,739,130

Capital Assets Being Depreciated

Buildings and Improvements 196,635,854 11,709,930 208,345,784

Equipment 13,348,969 1,304,394 421,898 14,231,465

Land Improvements 7,072,643 93,466 7,166,109

Less Accumulated Depreciation for:

Buildings and Improvements 27,094,939 3,604,054 30,698,993

Equipment 6,180,583 854,832 421,898 6,613,517

Land Improvements 1,144,778 214,116 1,358,894

Total Capital Assets, Being Depreciated, Net 182,637,166 8,434,788 0 191,071,954

Governmental Activity Capital Assets - Net $ 198,193,953 $ 10,478,381 $ 10,861,250 $ 197,811,084


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Capital assets being acquired under capital leases as of June 30, 2015, are as follows:

Governmental

Activities

Buildings and Improvements $ 1,080,000

Equipment 68,403

Land 270,000

Less: Accumulated Depreciation 41,214

$ 1,377,189

Current year depreciation expense by function is as follows:

Instruction $ 3,383,493

Support Services

Pupil Services $ 22,319

Improvements of Instructional Services 17,324

General Administration 33,807

Maintenance and Operation of Plant 290,001

Student Transportation Services 823,416

Other Support Services 2,317

Community Services 8,384 1,197,568

Food Services 91,941

$ 4,673,002

NOTE 7: INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2015, consisted of the following:

Transfers From

Transfer to

District-wide

Capital Projects

Debt Service Fund $ 9,753,539

Transfers are used to move sales tax revenues collected by the District-wide Capital Projects Fund to the Debt Service Fund to pay principal and interest for the General Obligation Bonds as required in the bond resolution.


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NOTE 8: RISK MANAGEMENT

The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.

The School District has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions, and acts of God. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District’s insurance coverage in any of the past three years.

The School District has established a limited risk management program for workers’ compensation claims. The School District accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of $450,000 loss per occurrence, up to the statutory limit.

Changes in the workers’ compensation claims liability during the last two fiscal years are as follows:

Beginning Claims and

of Year Changes in Claims End of Year

Liability Estimates Paid Liability

2014 $ 616,858 $ 438,077 $ 312,625 $ 742,310

2015 $ 742,310 $ 38,388 $ 372,090 $ 408,608

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:

Beginning Claims and

of Year Changes in Claims End of Year

Liability Estimates Paid Liability

2014 $ 0 $ 16,618 $ 16,618 $ 0

2015 $ 0 $ 30,288 $ 30,288 $ 0

The School District has purchased a surety bond to provide additional insurance coverage as follows:

Position Covered Amount

Superintendent $ 25,000


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NOTE 9: OPERATING LEASES

Catoosa County Board of Education has entered into various leases as lessee for copiers. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 2015, for governmental funds amounted to $449,898. Future minimum lease payments for these leases are as follows:

Year Ending

Governmental

Funds

2016 $ 425,894

2017 338,355

2018 73,700

2019 72,712

2020 16,829

2021 1,146

Total $ 928,636

NOTE 10: LONG-TERM LIABILITIES

CAPITAL LEASES

The Catoosa County Board of Education entered into various lease agreements for purchase of land, building and equipment. These lease agreements qualify as capital leases for accounting purposes, and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

GENERAL OBLIGATION DEBT OUTSTANDING

General Obligation Bonds currently outstanding are as follows:

Purpose Interest Rates Amount

General Government - Series 2011 2.0% - 4.0% $ 25,385,000

The changes in Long-Term Liabilities during the fiscal year ended June 30, 2015, were as follows:

Restated

Balance

July 1, 2014 Additions Deductions

Balance

June 30, 2015

Due Within One

Year

G.O. Bonds $ 32,885,000 $ 7,500,000 $ 25,385,000 $ 7,960,000

Capital Leases 202,978 $ 1,398,565 251,410 1,350,133 65,046

Bond Premiums Amortized 1,377,937 661,410 716,527 661,410

$ 34,465,915 $ 1,398,565 $ 8,412,820 $ 27,451,660 $ 8,686,456



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At June 30, 2015, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30: Principal Interest

2016 $ 65,046 $ 19,084

2017 1,224,475 15,982

2018 44,628 13,093

2019 14,162 4,155

2020 1,822 535

Total Principal and Interest $ 1,350,133 $ 52,849

Capital Leases

Fiscal Year Ended June 30 Principal Interest

2016 $ 7,960,000 $ 676,700 $ 661,410

2017 8,450,000 348,500 55,117

2018 8,975,000 89,750

Total Principal and Interest $ 25,385,000 $ 1,114,950 $ 716,527

General Obligation Debt Unamortized

Bond Premium

NOTE 11: ON-BEHALF PAYMENTS

The School District has recognized revenues and costs in the amount of $251,035 for retirement contributions paid on the School District’s behalf by the following State Agencies.

Georgia Department of Education

Paid to the Teachers' Retirement System of Georgia For Teachers' Retirement System (TRS) Employer’s Cost

In the amount of $13,210

Office of the State Treasurer Paid to the Public School Employees Retirement System

For Public School Employees Retirement (PSERS) Employer’s Cost In the amount of $237,825

Funds paid on behalf of the School District are reported in governmental funds. See Note 16 -Retirement Plans for the State support related to the Net Pension Liability.


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NOTE 12: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2015:

Project

Battlefield Elementary - VCT Floor Replacement $ 45,277

Lakeview-Fort Oglethorpe HS - VCT Floor Replacement 3,301

Battlefield Elementary - Fire Alarm System 26,511

Boynton Elementary - Fire Alarm System 31,260

Graysville Elementary - Fire Alarm System 21,762

$ 128,111

Unearned Executed

Contracts

The amounts described in this note are not reflected in the basic financial statements.

NOTE 13: SIGNIFICANT CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any costs which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.

The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine School District operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the basic financial statements.

NOTE 14: SUBSEQUENT EVENTS

On March 1, 2016, voters approved an extension of the Educational Local Option Sales Tax for a period of time not to exceed five years (20 consecutive calendar quarters). Within the referendum, the School District was authorized to issue general obligation bonds in an amount not to exceed $49,000,000. The proceeds from these bonds and sales taxes will be used for educational purposes and capital outlay projects as enumerated within the referendum.

NOTE 15: POST-EMPLOYMENT BENEFITS

GEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND

Plan Description. The Georgia School Personnel Post-employment Health Benefit Fund (School OPEB Fund) is a cost-sharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of public school systems, libraries and regional educational service agencies. The School OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Benefit Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (O.C.G.A.) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board). The Department of Community Health, which includes the School OPEB Fund, issues a separate stand-alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.


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Funding Policy. The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. For members with fewer than five years of service as of January 1, 2012, contributions also vary based on years of service. On average, members with five years or more of service as of January 1, 2012 pay approximately 25 percent of the cost of the health insurance coverage. In accordance with the Board resolution dated December 8, 2011, for members with fewer than five years of service as of January 1, 2012, the State provides a premium subsidy in retirement that ranges from 0% for fewer than 10 years of service to 75% (but no greater than the subsidy percentage offered to active employees) for 30 or more years of service. The subsidy for eligible dependents ranges from 0% to 55% (but no greater than the subsidy percentage offered to dependents of active employees minus 20%). No subsidy is available to Medicare eligible members not enrolled in a Medicare Advantage Option. The Board of Community Health sets all member premiums by resolution and in accordance with the law and applicable revenue and expense projections. Any subsidy policy adopted by the Board may be changed at any time by Board resolution and does not constitute a contract or promise of any amount of subsidy.

Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected “pay-as-you-go” financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.

The combined active and retiree contribution rates established by the Board for employers participating in the School OPEB Fund were as follows for the fiscal year ended June 30, 2015: For certificated teachers, librarians and regional educational service agencies and certain other

eligible participants:

July 1, 2014 - June 30, 2015 $945.00 per member per month

For non-certificated school personnel:

July 1, 2014 - June 30, 2015 $596.20 per member per month

No additional contribution was required by the Board for fiscal year 2015 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation.

The School District’s combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows:

Percentage Required

Fiscal Year Contributed Contribution

2015 100% $ 11,943,274

2014 100% $ 11,821,884

2013 100% $ 11,065,810


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NOTE 16: RETIREMENT PLANS

Catoosa County Board of Education participates in various retirement plans administered by the State of Georgia as further explained below.

TEACHERS' RETIREMENT SYSTEM OF GEORGIA (TRS)

Plan Description: All teachers of the School District as defined in §47‐3‐60 of the Official Code of Georgia Annotated (O.C.G.A.) and certain other support personnel as defined by §47‐3‐63 are provided pension through the Teachers' Retirement System of Georgia (TRS). TRS, a cost‐sharing multiple‐employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. The Teachers' Retirement System of Georgia issues a publicly available separate financial audit report that can be obtained at www.trsga.com/publications.

Benefits Provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee’s two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee’s creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee’s beneficiary had the employee retired on the date of death. Death benefits are based on the employee’s creditable service and compensation up to the date of death.

Contributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Pursuant to O.C.G.A. §47‐3‐63, the employer contributions for certain full‐time public school support personnel are funded on behalf of the employer by the State of Georgia. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their annual pay during fiscal year 2015. The school district’s contractually required contribution rate for the year ended June 30, 2015 was 13.15% of annual school district payroll.

Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Percentage Required


2015 100% $ 7,223,549

2014 100% $ 6,645,843

2013 100% $ 6,290,446

EMPLOYEES' RETIREMENT SYSTEM

Plan description: The Employees' Retirement System of Georgia (ERS) is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs.


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Benefits provided: The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees’ Pension and Savings Plan (GSEPS). Employees under the old plan started membership prior to July 1, 1982 and are subject to plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are new plan members subject to modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS.

Under the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.

Retirement benefits paid to members are based upon the monthly average of the member’s highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also be made to members’ benefits, provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member’s monthly pension, at reduced rates, to a designated beneficiary upon the member’s death. Death and disability benefits are also available through ERS.

Contributions: Member contributions under the old plan are 4% of annual compensation, up to $4,200, plus 6% of annual compensation in excess of $4,200. Under the old plan, the state pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these state contributions are included in the members’ accounts for refund purposes and are used in the computation of the members’ earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The School District’s contractually required contribution rate, actuarially determined annually, for the year ended June 30, 2015 was 21.96% of annual covered payroll for old and new plan members and 18.87% for GSEPS members. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.


Percentage Required


2015 100% $ 8,737

2014 100% $ 7,242

2013 100% $ 11,529

PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS)

Plan description: PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers' Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs.


JUNE 30, 2015

EXHIBIT "H"

- 27 -

Benefits provided: A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service. Upon retirement, the member will receive a monthly benefit of $14.75, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits. Contributions: The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined and paid directly to PSERS by the State Treasurer in accordance with O.C.G.A. §47-4-29(a) and 60(b). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Individuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2015, the School District reported a liability of $66,884,748 for its proportionate share of the Net Pension Liability ($66,819,412) for TRS and ($65,336) for ERS. The TRS Net Pension Liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the Net Pension Liability, the related State of Georgia support, and the total portion of the Net Pension Liability that was associated with the School District were as follows:

School District's proportionate share of the TRS Net Pension Liability $ 66,819,412

State of Georgia's proportionate share of the TRS Net Pension Liability

associated with the School District 125,073

Total $ 66,944,485

The Net Pension Liability was measured as of June 30, 2014. The total pension liability used to calculate the Net Pension Liability was based on an actuarial valuation as of June 30, 2013. An expected total pension liability as of June 30, 2014 was determined using standard roll-forward techniques. The School District’s proportion of the Net Pension Liability was based on contributions to TRS and ERS during the fiscal year ended June 30, 2014.

At June 30, 2014, the School District’s TRS proportion was 0.528899%, which was a decrease of 0.018288% from its proportion measured as of June 30, 2013. At June 30, 2014, the School District’s ERS proportion was 0.001742%, which was a decrease of 0.001592% from its proportion measured as of June 30, 2013.


JUNE 30, 2015

EXHIBIT "H"

- 28 -

At June 30, 2015, the School District did not have a PSERS liability for a proportionate share of the Net Pension Liability because of a Special Funding Situation with the State of Georgia, which is responsible for the Net Pension Liability of the plan. The amount of the State’s proportionate share of the Net Pension Liability associated with the School District is $958,505.

The PSERS Net Pension Liability was measured as of June 30, 2014. The total pension liability used to calculate the Net Pension Liability was based on an actuarial valuation as of June 30, 2013. An expected total pension liability as of June 30, 2014 was determined using standard roll-forward techniques. The State’s proportion of the Net Pension Liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2014.

For the year ended June 30, 2015, the School District recognized pension expense of $3,990,002 for TRS, -$25,722.00 for ERS and $83,240 for PSERS and related revenue of $8,734 for TRS and $83,240 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel.

At June 30, 2015, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows

of Resources

Deferred Inflows

of Resources

Deferred Outflows

of Resources

Deferred Inflows

of Resources

Net difference between projected and actual

earnings on pension plan investments $ 23,294,664 $ 15,946

Changes in proportion and differences between

School District contributions and proportionate

share of contributions 2,596,539 47,541

School District contributions subsequent to the

measurement date $ 7,210,176 $ 8,737

Total $ 7,210,176 $ 25,891,203 $ 8,737 $ 63,487

TRS ERS

Catoosa County Board of Education contributions subsequent to the measurement date of June 30, 2014 for TRS and ERS are reported as deferred outflows of resources and will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ended June 30: TRS ERS

2016 $ -6,413,787 $ -33,700

2017 $ -6,413,787 $ -21,815

2018 $ -6,413,787 $ -3,987

2019 $ -6,413,792 $ -3,985

2020 $ -236,050


JUNE 30, 2015

EXHIBIT "H"

- 29 -

Actuarial assumptions: The total pension liability as of June 30, 2014 was determined by an actuarial valuation as of June 30, 2013, using the following actuarial assumptions, applied to all periods included in the measurement:

Teachers' Retirement System:

Inflation 3.00%

Salary increases 3.75% - 7.00% average, including inflation

Investment rate of return 7.50% net of pension plan investment expense

including inflation

Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females set back two years for males and set back three years for females.

The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004 – June 30, 2009.

Employees' Retirement System:

Inflation 3.00%

Salary increases 5.45% - 9.25% average, including inflation

Investment rate of return 7.50% net of pension plan investment expense

including inflation

Mortality rates were based on the RP-2000 Combined Mortality Table for the periods after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set back eleven years for males for the period after disability retirement. The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004 – June 30, 2009.

Public School Employees Retirement System:

Inflation 3.00%

Salary increases N/A

Investment rate of return 7.50% net of pension plan investment expense,

including inflation

Mortality rates were based on the RP-2000 Combined Mortality Table set forward one year for males for the period after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set back two years for males and set forward one year for females for the period after disability retirement.

The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004 – June 30, 2009.


JUNE 30, 2015

EXHIBIT "H"

- 30 -

The long-term expected rate of return on TRS, ERS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Long-termTarget Expected Real

Asset Class Allocation Rate of Return*

Fixed income 30.00% 3.00%Domestic large stocks 39.70% 6.50%Domestic mid stocks 3.70% 10.00%Domestic small stocks 1.60% 13.00%International developed market stocks 18.90% 6.50%International emerging market stocks 6.10% 11.00%

Total 100.00%

* Rates shown are net of the 3.00% assumed rate of inflation

Discount rate: The discount rate used to measure the total TRS, ERS and PSERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS, ERS, and PSERS pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Sensitivity of the Catoosa County Board of Education’s proportionate share of the Net Pension Liability to changes in the discount rate: The following presents the School District’s proportionate share of the Net Pension Liability calculated using the discount rate of 7.50%, as well as what the School District’s proportionate share of the Net Pension Liability would be if it were calculated using a discount rate that is 1‐percentage‐point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate:

Teachers' Reti r ement Sy stem:

1% Decrease

(6.50%)

Current Discount

Rate (7.50%)

1% Increase

(8.50%)

School District's proportionate share of the Net

Pension Liability $ 123,139,212 $ 66,819,412 $ 20,441,227

Employ ees' Reti r ement Sy stem:

1% Decrease

(6.50%)

Current Discount

Rate (7.50%)

1% Increase

(8.50%)

School District's proportionate share of the Net

Pension Liability $ 95,273 $ 65,336 $ 39,853

Pension plan fiduciary net position: Detailed information about the pension plan’s fiduciary net position is available in the separately issued TRS, ERS and PSERS financial report which is publically available at www.trsga.com/publications and www.ers.ga.gov/formspubs/formspubs.


JUNE 30, 2015

EXHIBIT "H"

- 31 -

DEFINED CONTRIBUTION PLAN

The Catoosa County Schools Non-TRS 403(B) Plan is an employer contributory plan originally established July 1, 2006, by the Catoosa County Board of Education with Variable Annuity Life Insurance Company. The Plan was transferred to Lincoln Financial Group effective January 1, 2009. Employees eligible for this plan are those employees covered under the Public School Employees Retirement System (PSERS) and thus not eligible for Teachers’ Retirement System (TRS). The Board of Education, recognizing PSERS as a limited benefit plan with a limited defined contribution, desired to supplement the retirement income available for this group of employees.

The Plan is funded by member employee elective deferral contributions and employer discretionary contributions. An eligible employee enters the Plan of the first day of the payroll period provided he/she agrees to defer at least $200 annually.

Employer discretionary contributions are contributions the employer may make to the Plan on behalf of the employee without regard to the amount of the employee’s elective deferral contributions. These contributions are made at the sole discretion of the employer and in some years such contributions may not be made to the Plan. Employer contributions for fiscal year 2015 were 3.00% of member’s annual base salary.

An employee becomes 100% vested with respect to employer discretionary contributions made on his/her behalf after 5 years of service to the Catoosa County School System. Employees are always 100% vested with respect to his/her employee elective deferral contributions.


Percentage Required


2015 100% $ 123,044

2014 100% $ 118,940

2013 100% $ 114,761

(This page left intentionally blank)



SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

TEACHERS' RETIREMENT SYSTEM OF GEORGIA


SCHEDULE "1"

2015

School District's proportion of the Net Pension Liability 0.528899%

School District's proportionate share of the Net Pension Liability $ 66,819,412

State of Georgia's proportionate share of the Net Pension Liability

associated with the School District 125,073

Total $ 66,944,485

School District's covered-employee payroll $ 54,125,004

School District's proportionate share of the Net Pension Liability

as a percentage of its covered employee payroll 123.45%

Plan fiduciary net position as a percentage of the total Pension Liability 84.03%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

Schedule includes all significant plans and funds administered by Catoosa County Board of Education.

- 33 -



SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA


SCHEDULE "2"

2015

School District's proportion of the Net Pension Liability 0.001742%

School District's proportionate share of the Net Pension Liability $ 65,336

School District's covered-employee payroll $ 39,232

School District's proportionate share of the Net Pension Liability

as a percentage of its covered employee payroll 166.54%

Plan fiduciary net position as a percentage of the total Pension Liability 77.99%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

Schedule includes all significant plans and funds administered by Catoosa County Board of Education.

- 34 -

2015 2014 2013

Contractually required contribution $ 7,223,549 $ 6,645,843 $ 6,290,446

Contributions in relation to the contractually required contribution $ 7,223,549 $ 6,645,843 $ 6,290,446

Contribution deficiency (excess) $ 0 $ 0 $ 0

School District's covered-employee payroll $ 54,931,930 $ 54,125,004 $ 55,132,412

Contributions as a percentage of covered-employee payroll 13.15% 12.28% 11.41%

FOR THE YEAR ENDED JUNE 30



SCHEDULE OF CONTRIBUTIONS

TEACHERS' RETIREMENT SYSTEM OF GEORGIA

- 36 -

SCHEDULE "3"

2012 2011 2010 2009 2008 2007 2006

$ 5,663,053 $ 5,671,299 $ 5,382,333 $ 5,185,416 $ 5,121,354 $ 4,886,996 $ 4,405,949

$ 5,663,053 $ 5,671,299 $ 5,382,333 $ 5,185,416 $ 5,121,354 $ 4,886,996 $ 4,405,949

$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

$ 55,089,674 $ 55,165,271 $ 55,260,087 $ 55,865,539 $ 55,187,006 $ 52,661,590 $ 47,683,427

10.28% 10.28% 9.74% 9.28% 9.28% 9.28% 9.24%

- 37 -

2015 2014 2013

Contractually required contribution $ 8,737 $ 7,242 $ 11,529

Contributions in relation to the contractually required contribution $ 8,737 $ 7,242 $ 11,529

Contribution deficiency (excess) $ 0 $ 0 $ 0

School District's covered-employee payroll $ 39,784 $ 39,232 $ 77,373

Contributions as a percentage of covered-employee payroll 21.96% 18.46% 14.90%



SCHEDULE OF CONTRIBUTIONS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

FOR THE YEAR ENDED JUNE 30

- 38 -

SCHEDULE "4"

2012 2011 2010 2009 2008 2007 2006

$ 19,434 $ 21,599 $ 22,474 $ 22,483 $ 22,174 $ 23,852 $ 20,564

$ 19,434 $ 21,599 $ 22,474 $ 22,483 $ 22,174 $ 23,852 $ 20,564

$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

$ 167,099 $ 207,484 $ 215,890 $ 215,973 $ 213,002 $ 229,126 $ 197,538

11.63% 10.41% 10.41% 10.41% 10.41% 10.41% 10.41%

- 39 -


NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


SCHEDULE "5"

Teachers' Retirement System

Valuation date June 30, 2012

Actuarial cost method Entry age

Amortization method Level percentage of payroll, open

Remaining amortization period 30 years

Asset valuation method Seven-year smoothed market

Inflation rate 3.00%

Salary increases 3.75 – 7.00%, including inflation

Investment rate of return 7.50%, net of pension plan investment

expense, including inflation

Employees' Retirement System

Valuation date June 30, 2012

Actuarial cost method Entry age

Amortization method Level dollar, open

Remaining amortization period 30 years

Asset valuation method Seven-year smoothed market

Inflation rate 3.00%

Salary increases 2.725% – 4.625% for FY 2012-2013,

5.45% - 9.25% for FY2014+

Investment rate of return 7.50%, net of pension plan investment

expense, including inflation

Changes of assumptions : In 2010 and later, the expectation of retired life mortality was changed to the

RP‑2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010.

In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual

experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and

anticipated experience.

Method and assumptions used in calculations of actuarially determined contributions : The actuarially

determined contribution rates in the schedule of contributions are calculated as of June 30, three years prior

to the end of the fiscal year in which contributions are reported. The following actuarial methods and

assumptions were used to determine the contractually required contributions for year ended June 30, 2015

reported in that schedule:

Changes of assumptions : There were no changes in assumptions or benefits that affect the measurement

of the total pension liability since the prior measurement date.

Method and assumptions used in calculations of actuarially determined contributions : The actuarially

determined contribution rates in the schedule of contributions are calculated as of June 30, three years prior

to the end of the fiscal year in which contributions are reported. The following actuarial methods and

assumptions were used to determine the contractually required contributions for year ended June 30, 2015

reported in that schedule:

- 40 -


GENERAL FUND

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL


SCHEDULE "6"

NONAPPROPRIATED BUDGETS ACTUAL VARIANCE

ORIGINAL (1) FINAL (1) AMOUNTS OVER/UNDER

REVENUES

Property Taxes $ 28,394,695 $ 28,394,695 $ 29,332,359 $ 937,664

Sales Taxes 430,000 430,000 606,947 176,947

State Funds 59,331,733 59,698,673 60,198,626 499,953

Federal Funds 8,026,298 8,539,360 7,741,039 -798,321

Charges for Services 1,940,600 1,940,600 2,637,035 696,435

Investment Earnings 2,000 2,000 33,360 31,360

Miscellaneous 3,509,943 3,509,943

Total Revenues 98,125,326 99,005,328 104,059,309 5,053,981

EXPENDITURES

Current

Instruction 66,525,235 67,664,010 65,580,121 2,083,889

Support Services

Pupil Services 3,538,985 3,713,309 4,244,620 -531,311

Improvement of Instructional Services 2,069,715 2,779,033 2,404,170 374,863

Educational Media Services 1,528,563 1,528,563 1,823,038 -294,475

General Administration 1,042,908 1,073,019 1,311,845 -238,826

School Administration 7,343,100 7,342,503 7,273,453 69,050

Business Administration 649,591 649,591 666,717 -17,126

Maintenance and Operation of Plant 7,794,950 7,794,950 7,816,835 -21,885

Student Transportation Services 4,823,344 4,727,645 4,442,883 284,762

Central Support Services 811,871 811,871 517,618 294,253

Other Support Services 315,225 355,752 1,314,922 -959,170

Food Services Operation 5,891,000 5,891,000 5,136,380 754,620

Community Services Operation 1,517 1,517 505,231 -503,714

Debt Service 92,200 -92,200

Total Expenditures 102,336,004 104,332,763 103,130,033 1,202,730

Excess of Revenues over (under) Expenditures -4,210,678 -5,327,435 929,276 6,256,711

OTHER FINANCING SOURCES (USES)

Other Sources 392,955 364,662 48,565 -316,097

Other Uses -392,955 -392,955 392,955

Total Other Financing Sources (Uses) 0 -28,293 48,565 76,858

Net Change in Fund Balances -4,210,678 -5,355,728 977,841 6,333,569

Fund Balances - Beginning 9,769,485 9,769,485 9,933,207 163,722

Fund Balances - Ending $ 5,558,807 $ 4,413,757 $ 10,911,048 $ 6,497,291

(1) Original and Final Budget amounts do not include the budgeted revenues or expenditures of the various principal accounts.

The actual revenues and expenditures of the various principal accounts are $3,565,749 and $3,561,311, respectively.

See notes to the basic financial statements.

Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual

The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the

basis of accounting used in the presentation of the fund financial statements.

- 41 -


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


SCHEDULE "7"

PASS-

THROUGH

ENTITY

FUNDING AGENCY CFDA ID EXPENDITURES

PROGRAM/GRANT NUMBER NUMBER IN PERIOD

Agriculture, U.S. Department of

Child Nutrition Cluster

Pass-Through From Georgia Department of Education

Food Services

School Breakfast Program * 10.553 N/A (2)

National School Lunch Program * 10.555 N/A $ 4,925,394 (1)

Total Child Nutrition Cluster 4,925,394

Other Programs


Food Services

State Administrative Expenses for Child Nutrition 10.560 N/A 10,502

Total U. S. Department of Agriculture 4,935,896

Education, U. S. Department of

Special Education Cluster


Special Education

Grants to States 84.027 N/A 1,682,061

Preschool Grants 84.173 N/A 50,014

Total Special Education Cluster 1,732,075

Other Programs


ARRA - Race-to-the-Top Incentive Grants 84.395 N/A 13,204

Career and Technical Education - Basic Grants to States 84.048 N/A 98,257

Education for Homeless Children and Youth 84.196 N/A 41,322

English Language Acquisition Grants 84.365 N/A 12,557

Improving Teacher Quality State Grants * 84.367 N/A 325,561

Title I Grants to Local Educational Agencies 84.010 N/A 1,943,992

Total Other Programs 2,434,893

Total U. S. Department of Education 4,166,968

Health and Human Services, U. S. Department of

Child Care and Development Fund Cluster

Pass-Through From Bright From the Start:

Georgia Department of Early Care and Learning

Child Care and Development Block Grant 93.575 N/A 10,282

Defense, U. S. Department of

Direct

Department of the Army

R.O.T.C. Program 142,037

Total Expenditures of Federal Awards $ 9,255,183

N/A = Not Available

- 42 -


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

YEAR ENDED JUNE 30, 2015SCHEDULE "7"

(1) Includes the Federally assigned value of donated commodities for the Food Donation Program

in the amount of $318,035.

(2) Expenditures for the funds earned on the School Breakfast Program ($779,565) were not maintained separately

and are included in the 2015 National School Lunch Program.

Major Programs are identified by an asterisk (*) in front of the CFDA number.

The School District did not provide Federal Assistance to any Subrecipient.

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Catoosa County Board of Education

and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund

financial statements.


Notes to the Schedule of Expenditures of Federal Awards

- 43 -


SCHEDULE OF STATE REVENUE


SCHEDULE "8"

CAPITAL

GENERAL PROJECTS

AGENCY/FUNDING FUND FUND TOTAL

GRANTS

Bright From the Start:

Georgia Department of Early Care and Learning

Pre-Kindergarten Program $ 847,042 $ 847,042

Education, Georgia Department of

Quality Basic Education

Direct Instructional Cost

Kindergarten Program 2,882,024 2,882,024

Kindergarten Program - Early Intervention Program 1,049,172 1,049,172

Primary Grades (1-3) Program 6,785,075 6,785,075

Primary Grades - Early Intervention (1-3) Program 1,573,629 1,573,629

Upper Elementary Grades (4-5) Program 3,474,478 3,474,478

Upper Elementary Grades - Early Intervention (4-5) Program 552,279 552,279

Middle School (6-8) Program 6,283,266 6,283,266

High School General Education (9-12) Program 5,940,515 5,940,515

Vocational Laboratory (9-12) Program 2,090,921 2,090,921

Students with Disabilities 11,957,093 11,957,093

Gifted Student - Category VI 3,292,729 3,292,729

Remedial Education Program 1,246,803 1,246,803

Alternative Education Program 476,018 476,018

English Speakers of Other Languages (ESOL) 130,189 130,189

Media Center Program 1,201,689 1,201,689

20 Days Additional Instruction 352,802 352,802

Staff and Professional Development 219,921 219,921

Indirect Cost

Central Administration 1,563,121 1,563,121

School Administration 2,523,150 2,523,150

Facility Maintenance and Operations 2,758,369 2,758,369

Amended Formula Adjustment -5,078,603 -5,078,603

Categorical Grants

Pupil Transportation

Regular 813,029 813,029

Nursing Services 194,813 194,813

Education Equalization Funding Grant 6,341,355 6,341,355

Other State Programs

Food Services 137,333 137,333

Math and Science Supplements 34,409 34,409

Preschool Handicapped Program 99,290 99,290

Teacher of the Year 1,014 1,014

Teachers' Retirement 13,210 13,210

Vocational Education 204,666 204,666

Georgia State Financing and Investment

Commission

Reimbursement on Construction Projects $ 1,295,495 1,295,495

Office of the State Treasurer

Public School Employees Retirement 237,825 237,825

$ 60,198,626 $ 1,295,495 $ 61,494,121


GOVERNMENTAL FUND TYPES

- 44 -

CATOOSA COUNTY BOARD OF EDUCATIONSCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS


SCHEDULE "9"

AMOUNT AMOUNT

ORIGINAL CURRENT EXPENDED EXPENDED TOTAL EXCESS ESTIMATED

ESTIMATED ESTIMATED IN CURRENT IN PRIOR COMPLETION PROCEEDS NOT COMPLETION

PROJECT COST (1) COSTS (2) YEAR (3) (4) YEARS (3) (4) COST EXPENDED (5) DATE (5)

ESPLOST III

$ 59,000,000 $ 50,796,864 $ 0 $ 49,803,757 $ 0 $ 0 December 2016

ESPLOST IV

(1)

23,121,409 5,423,792 363,014 5,060,778 June 2017

(2)

14,250,000 18,934 0 18,934 June 2017

(3)

6,802,231 12,646,795 163,599 12,330,032 June 2017

(4)

13,546,360 18,424,431 211,044 18,213,387 June 2017

(5)

5,150,000 5,612,163 2,677,644 2,934,519 June 2017

(6)

5,000,000 0 0 0 June 2017

(7) 250,000 0 0 0 June 2017

(8) 6,800,000 2,751,792 381,913 2,369,879 June 2017

(9)

4,080,000 4,049,523 1,509,569 2,539,954 June 2017

$ 138,000,000 $ 99,724,294 $ 5,306,783 $ 93,271,240 $ 0 $ 0

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.

(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion.

(3) The voters of Catoosa County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include

sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.

(4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows:

Prior Years $ 10,630,819

Current Year 985,900

Total $ 11,616,719

(5) Original published "Schedule of Approved Local Option Sales Tax Projects" indicated an estimated completion date for ESPLOST III of August 1, 2012. This date has been revised to

implement future acquisitions and expenditures in support of projects listed in the ESPLOST III referendum, as approved by the voters of Catoosa County.


Acquiring, constructing and equipping facilities for student evaluation and testing, teacher training and professional learning, special education and storage

Physical education equipment purchases and maintenance

School bus purchases (mainly for replacement)

Acquiring, constructing and equipping transportation facilities to house, drive into/under and repair school busses (including the acquisition of land, and construction of needed facilities and appurtenances therefore): and paying for the expenses incident to accomplish the foregoing purposes

To build, equip and furnish new schools, including but not limited to a new high school and a new elementary school; to make additions, modifications and renovations to existing schools; to provide computers, equipment and personality (including school buses); to acquire land and pay for site preparation and paving at new and existing schools; to pay for construction, renovation, modifications, additions and repairs of areas and structures that will be jointly used for instructional, sports and physical education activities; and to pay for the expenses incident to accomplish the foregoing purposes.

Making capital expenditures for instructional purposes, acquiring instructional and technological equipment (including but not limited to wireless electronic devices, desktop and laptop computers, smartboards, projectors, scanners, printers, and student response devices), and acquiring the wiring and other infrastructure necessary to accommodate the use of such technology equipment

Acquiring land for constructing and equipping new schools (including a new elementary school)

Making additions, expansions, modifications and renovations to existing school sites or campuses (including but not limited to classrooms, cafeterias, media centers, restrooms, band rooms and gymnasiums)

Acquiring, constructing and equipping new roofs, a new Lakeview Fort Oglethorpe High School gymnasium and new Ringgold High School theatre

Installing roofing, sprinklers, HVAC, paving, plumbing, electrical wiring and fixtures, painting, fences, alarms, telephone upgrading, equipping, lighting, and general land improvements

- 45 -


GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

ALLOTMENTS AND EXPENDITURES - BY PROGRAM


SCHEDULE "10"

ALLOTMENTS

FROM GEORGIA

DEPARTMENT OF ELIGIBLE QBE PROGRAM COSTS

DESCRIPTION EDUCATION (1) (2) SALARIES OPERATIONS TOTAL

Direct Instructional Programs

Kindergarten Program $ 3,347,857 $ 3,857,523 $ 62,556 $ 3,920,079

Kindergarten Program-Early Intervention Program 1,139,210 195,920 9,491 205,411

Primary Grades (1-3) Program 7,789,617 9,391,914 156,725 9,548,639

Primary Grades-Early Intervention (1-3) Program 1,816,039 597,342 39,506 636,848

Upper Elementary Grades (4-5) Program 4,015,956 5,103,343 94,078 5,197,421

Upper Elementary Grades-Early Intervention (4-5)

Program 612,939 137,218 9,525 146,743

Middle School (6-8) Program 7,225,220 7,798,536 176,742 7,975,278

High School General Education (9-12) Program 6,755,187 7,366,239 359,600 7,725,839

Vocational Laboratory (9-12) Program 2,432,359 2,572,749 221,679 2,794,428

Students with Disabilities 13,648,135

Category I 3,345,780 72,677 3,418,457

Category II 517,251 22,810 540,061

Category III 8,150,369 28,317 8,178,686

Category IV 947,451 20,335 967,786

Category V 465,133 465,133

Gifted Student - Category VI 3,754,217 3,153,974 14,569 3,168,543

Remedial Education Program 1,392,396 1,341,524 1,341,524

Alternative Education Program 545,355 998,809 998,809

English Speakers of Other Languages (ESOL) 149,150 233,140 4,653 237,793

TOTAL DIRECT INSTRUCTIONAL PROGRAMS 54,623,637 56,174,215 1,293,263 57,467,478

Media Center Program 1,377,764 1,562,324 141,051 1,703,375

Staff and Professional Development 246,789 39,766 89,910 129,676

TOTAL QBE FORMULA FUNDS $ 56,248,190 $ 57,776,305 $ 1,524,224 $ 59,300,529

(1) Comprised of State Funds plus Local Five Mill Share.

(2) Allotments do not include the impact of the State amended formula adjustment.


- 47 -

SECTION II

COMPLIANCE AND INTERNAL CONTROL REPORTS




Greg S. Griffin

STATE AUDITOR (404) 656-2174

May 26, 2016 Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Catoosa County Board of Education INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Catoosa County Board of Education as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise Catoosa County Board of Education's basic financial statements and have issued our report thereon dated May 26, 2016. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Catoosa County Board of Education's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Catoosa County Board of Education's internal control. Accordingly, we do not express an opinion on the effectiveness of the Catoosa County Board of Education's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 2015YB-10

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether Catoosa County Board of Education's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, not to provide an opinion on the effectiveness of the Catoosa County Board of Education's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Catoosa County Board of Education's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.



GSG:er 2015YB-10




Greg S. Griffin

STATE AUDITOR (404) 656-2174

May 26, 2016 Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Catoosa County Board of Education INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 Ladies and Gentlemen: Report on Compliance for Each Major Federal Program We have audited Catoosa County Board of Education's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2015. Catoosa County Board of Education's major federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of Catoosa County Board of Education’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Catoosa County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. 2015SA-10

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Catoosa County Board of Education's compliance. Opinion on Each Major Federal Program In our opinion, the Catoosa County Board of Education complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2015. Report on Internal Control over Compliance Management of Catoosa County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Catoosa County Board of Education's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Catoosa County Board of Education's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.



GSG:er 2015SA-10

SECTION III

AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

CATOOSA COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE

SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2015

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.

SECTION IV

FINDINGS AND QUESTIONED COSTS

CATOOSA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS


I SUMMARY OF AUDITOR'S RESULTS Financial Statements Type of auditor's report issue:

Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information Unmodified

Internal control over financial reporting:

Material weakness identified? No Significant deficiency identified? None Reported

Noncompliance material to financial statements noted: No

Federal Awards

Internal Control over major programs: Material weakness identified? No Significant deficiency identified? None Reported

Type of auditor's report issued on compliance for major programs: All major programs Unmodified

Any audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a)? No

Identification of major programs:

CFDA Numbers Name of Federal Program or Cluster 10.553, 10.555 Child Nutrition Cluster 84.367 Improving Teacher Quality State Grants

Dollar threshold used to distinguish between Type A and Type B programs: $300,000

Auditee qualified as low-risk auditee? No II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.

Appendix B PROPOSED FORM OF LEGAL OPINION OF BOND COUNSEL The form of Legal Opinion included in this Appendix B has been prepared by Gray Pannell & Woodward LLP, Savannah, Georgia, Bond Counsel, and is substantially the form to be given in connection with the delivery of the Bonds.

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[Date of Closing] Catoosa County School District Ringgold, Georgia Re: $40,000,000 CATOOSA COUNTY SCHOOL DISTRICT GENERAL OBLIGATION SALES TAX BONDS, SERIES 2016 To the Addressee: We have acted as bond counsel in connection with the issuance by the Catoosa County School District (the “School District”) of $40,000,000 in aggregate principal amount of CATOOSA COUNTY SCHOOL DISTRICT GENERAL OBLIGATION SALES TAX BONDS, SERIES 2016 (the “Bonds”), dated as of the date of issuance and delivery thereof. In this capacity we have examined (i) the Constitution and general laws of the State of Georgia; (ii) certified copies of proceedings of the Board of Education of Catoosa County (the “Board of Education”), acting for and on behalf of the School District, which School District comprises all of Catoosa County, Georgia, including a resolution adopted by the Board of Education on November 3, 2015, calling an educational sales and use tax election, held in Catoosa County on March 1, 2016 (the “Election”); (iii) a certified copy of a bond resolution adopted by the Board of Education on July 28, 2016 (the “Resolution”); (iv) a certified copy of the proceedings in and the judgment of the Superior Court of Catoosa County, Georgia, by which the Bonds were validated; and (v) other proofs authorizing and relating to the issuance of the Bonds, including a copy of the consolidated returns of the Election. As to questions of fact material to our opinion, we have relied upon representations of the Board of Education contained in the Resolution and in the certified proceedings and other certifications of public officials and others furnished to us, without undertaking to verify the same by independent investigation. The Bonds are subject to transfer and exchange in the manner and on the terms specified in the Resolution. The Bonds are being issued pursuant to a book-entry system in fully registered form. The principal of the Bonds matures on August 1 in the years and amounts set forth in the Resolution and is not subject to redemption prior to maturity. Interest on each Bond is payable on February 1 and August 1 in each year, beginning on February 1, 2017, in the

The Realty Building 24 Drayton Street, Suite 1000 Savannah, GA 31401 (912) 443-4040 One Buckhead Plaza 3060 Peachtree Road, N.W., Suite 730 Atlanta, GA 30305 (404) 480-8899 gpwlawfirm.com

Catoosa County School District [Date of Issuance] Page 2

Appendix B-2

manner and at the rate of interest stated in each Bond and the Resolution until the obligation with respect to the payment of the principal of such Bond shall be discharged. The legal opinions expressed herein are based upon existing law, are subject to judicial discretion regarding usual equity principles and do not relate to compliance by the School District, the initial purchasers of the Bonds, or any other party with any statute, regulation or ruling of the State of Georgia or the United States of America regarding the sale (other than the initial sale by the School District) or distribution of the Bonds. The Internal Revenue Code of 1986, as amended (the “Code”) sets forth certain requirements which must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded from gross income for purposes of federal income taxation. Non-compliance with such requirements may cause interest on the Bonds to be included in gross income retroactively to the date of issue thereof. Pursuant to the Resolution, the Board of Education has covenanted to comply with the requirements of the Code in order to maintain the exclusion from federal gross income of interest on the Bonds. In reliance upon and subject to the foregoing, we are of the opinion that: 1. The Bonds have been duly authorized and issued by the Board of Education, as the controlling and managing body acting for and on behalf of the School District, with the assent of a majority of the qualified voters of the School District voting in the Election held for that purpose and in accordance with the Constitution and laws of the State of Georgia. 2. The payment of the Bonds is validly secured by a one percent sales and use tax for educational purposes which will be collected within Catoosa County beginning July 1, 2017, for a period of time not to exceed five years. The principal of and interest on the Bonds are payable from a separate account in which are to be placed the proceeds received by the School District from such sales and use tax. The obligation to pay the principal of and interest on the Bonds, however, is a general obligation debt of the School District, and constitutes a pledge of the full faith and credit of the School District. Any liability on such debt which is not satisfied from the proceeds of the sales and use tax for educational purposes shall be satisfied from the general fund of the School District or from a direct annual ad valorem tax to be levied for such purpose. 3. All property subject to taxation for general obligation school bond purposes in the School District is subject to the levy of an ad valorem tax unlimited as to rate or amount for the purpose of paying the principal of and interest on the Bonds. Pursuant to the recommendation of the Board of Education, the Board of Commissioners of Catoosa County, as authorized and required by law, has provided for the levy on all of said property such ad valorem taxes as will produce funds sufficient in amount to pay the principal of and interest on the Bonds as the same

Catoosa County School District [Date of Issuance] Page 3

Appendix B-3

become due and payable to the extent that proceeds of the sales and use tax for educational purposes are insufficient to pay the same. 4. The Bonds have been duly confirmed and validated by judgment of the Superior Court of Catoosa County entered on May 18, 2016, Civil Action No. 2016SUCV513 and no valid appeal may be taken from said judgment of validation. 5. The Board of Education has irrevocably authorized and directed the State of Georgia Board of Education to withhold from time to time, as necessary, State of Georgia appropriated funds to which the School District is entitled, and to transfer to the Debt Service Account Custodian (as defined in the Resolution), from such withheld funds, the amount necessary to pay the principal of and interest on the Bonds. 6. Assuming compliance with the aforementioned covenant by the Board of Education to maintain the exclusion from federal gross income of interest on the Bonds, interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is excluded from gross income for federal income tax purposes and the interest thereon is exempt from taxation by the State of Georgia and any of its political subdivisions. The interest on the Bonds will not be included as an item of tax preference in computing the federal alternative minimum tax imposed on individuals and corporations; however, such interest will be taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. Although we have rendered an opinion that interest on the Bonds is excluded from gross income for federal income tax purposes, a bondholder’s federal tax liability may otherwise be affected by the ownership or disposition of the Bonds. The nature and extent of these other tax consequences will depend upon the bondholder’s other items of income or deduction. We express no opinion regarding any such other tax consequences. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Yours very truly, GRAY PANNELL & WOODWARD LLP By: A Partner

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Appendix C FORM OF THE CONTINUING DISCLOSURE CERTIFICATE

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Appendix C - 1

CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the Board of Education of Catoosa County (the “Board of Education”), the managing and controlling body of the Catoosa County School District (the “School District”), a political subdivision of the State of Georgia, in connection with the issuance of the CATOOSA COUNTY SCHOOL DISTRICT GENERAL

OBLIGATION SALES TAX BONDS, SERIES 2016, in the aggregate principal amount of $40,000,000 (the “Bonds”). The Bonds are being issued pursuant to a bond resolution adopted by the Board of Education on July 28, 2016 (the “Resolution”). The Board of Education covenants and agrees, on behalf of the School District, as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Board of Education for the benefit of the Holders and Beneficial Owners of the Bonds (together, the “Bondholders”) and in order to assist the Participating Underwriter (defined below) in complying with the continuing disclosure requirements of U.S. Securities and Exchange Commission Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Resolution or parenthetically defined herein, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 2, the following capitalized terms shall have the following meanings: “Annual Report” means any Annual Report provided by the School District pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Beneficial Owner” means any person who (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. “Board of Education” means the Board of Education of Catoosa County, Georgia, and any successor or successors in office to the present Board of Education. “Dissemination Agent” means the Board of Education or any successor Dissemination Agent designated in writing by the Board of Education and which has filed with the Board of Education a written acceptance of such designation. “EMMA” means the MSRB’s Electronic Municipal Market Access System which became effective July 1, 2009, and receives electronic submissions of the Annual Report on the EMMA website at http://www.emma.msrb.org. “Fiscal Year” means any period of 12 consecutive months adopted by the Board of Education as the School District’s fiscal year for financial reporting purposes and initially shall mean the period beginning on July 1 of a calendar year and ending on June 30 of the following calendar year. “Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” means the Municipal Securities Rulemaking Board. “Obligated Person” has the meaning set forth in the Rule.

Appendix C - 2

“Participating Underwriter” means JP Morgan Securities, LLC, the original underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “School District” means the Catoosa County School District, a political subdivision of the State of Georgia. SECTION 3. Provision of Annual Reports. (a) The School District will provide, or cause the Dissemination Agent (if other than the School District) to provide electronically to EMMA, not later than nine (9) months after the end of each Fiscal Year, commencing with the report for the Fiscal Year ending June 30, 2016, an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. Within nine (9) months after the end of the Fiscal Year ended June 30, 2016, or if unavailable at that time then as soon thereafter as is available, the School District shall provide to EMMA the audited financial statements of the School District for the Fiscal Year ended June 30, 2016. The Annual Report will be made to EMMA as PDF files configured to permit documents to be saved, viewed, printed and retransmitted by electronic means. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the School District may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. In such event, the audited financial statements will be submitted promptly upon their availability. If the School District’s fiscal year changes, notice of such change shall be given in the same manner as for a Listed Event under Section 5(c).

(b) Not later than fifteen (15) business days prior to the date specified in paragraph (a) of this Section 3 for providing the Annual Report to EMMA, the Board of Education shall provide the Annual Report to the Dissemination Agent (if other than the School District). If the Board of Education is unable to provide an Annual Report by the date required in paragraph (a), the Dissemination Agent shall send a notice to EMMA in substantially the form attached as Exhibit A. (c) The Dissemination Agent shall:

(i) determine each year, prior to the date for providing the Annual Report, the manner of filing with EMMA; and

(ii) (if the Dissemination Agent is other than the School District), file a report with

the School District certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided to EMMA.

SECTION 4. Content of Annual Reports. The School District’s Annual Report shall contain or incorporate by reference: (a) Information for the preceding Fiscal Year regarding the following categories of financial information and operating data shall be consistent with the information contained in the final Official Statement for the Bonds under the following headings: (i) “THE BONDS – Security and Sources of Payment for the Bonds, Historical Educational Sales Tax Data”; (ii) “THE SCHOOL DISTRICT – Schools; - Enrollment; - Employees, Employee Relations, and Labor Organizations”; (iii) “DEBT

Appendix C - 3

STRUCTURE OF THE SCHOOL DISTRICT – Summary of School District Debt by Category; - Debt Limitation”; (iv) “SCHOOL DISTRICT AD VALOREM TAXATION – M&O Tax Digest; - Ten Largest Taxpayers; - M&O Tax Levies and Collections; -Millage Rates”; and (v) “SCHOOL DISTRICT FINANCIAL INFORMATION – Employee Pension Plan; - Governmental Immunity and Insurance Coverage.” (b) The School District’s general purpose financial statements for the prior Fiscal Year, prepared in accordance with generally accepted accounting principles as applicable to governmental entities from time to time by the Governmental Accounting Standards Board except for (i) the variances and omissions disclosed in the Official Statement relating to the Bonds and (ii) such other minor deviations or omissions as are customary for school districts in the State of Georgia which do not materially misstate the financial position of the School District. Such general purpose financial statements shall be accompanied by an audit report, if available at the time of submission of the Annual Report as provided in Section 3(a) hereof, resulting from an audit conducted by an independent certified public accountant or firm of independent certified public accountants in conformity with generally accepted auditing standards. If such audited financial statements are not available by the time the Annual Report is required to be filed, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the Official Statement relating to the Bonds, and the audited financial statements, together with the audit report thereon, shall be filed in the same manner as the Annual Report when they become available. (c) If generally accepted accounting principles have changed since the last Annual Report was submitted pursuant to Section 3(a) hereof and if such changes are material to the School District, a narrative explanation describing the impact of such changes on the District. Any or all of the items listed above may be incorporated by specific reference to other documents, including official statements of debt issues with respect to which the School District is an Obligated Person, which have been submitted to EMMA or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The School District shall clearly identify each such other document so incorporated by reference. SECTION 5. Reporting of Significant Events. (a) The School District shall provide or cause to be provided through the Dissemination Agent to EMMA, in a timely manner not in excess of 10 business days after the occurrence of the event, notice of the occurrence of any of the following events with respect to the Bonds: 1. Principal and interest payment delinquencies. 2. Non-payment related defaults, if material.

3. Unscheduled draws on debt service reserves reflecting financial difficulties. 4. Unscheduled draws on credit enhancements reflecting financial difficulties. 5. Substitution of credit or liquidity providers, or their failure to perform. 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed

or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the Bonds.

7. Modifications to rights of Bondholders, if material. 8. Bond calls, if material, and tender offers. 9. Defeasances.

10. Release, substitution, or sale of property securing repayment of the Bonds, if material.

Appendix C - 4

11. Rating changes. 12. Bankruptcy, insolvency, receivership or similar event of the School District.

This event is considered to have occurred when any of the following have occurred: (i) appointment of receiver, fiscal agent or similar officer in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the School District, 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 of governmental authority, or (ii) 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 School District.

13. The consummation of a merger, consolidation, or acquisition involving the School District or the sale of all or substantially all of the assets of the School District, 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.

14. Appointment of a successor or additional trustee or the change of name of a trustee, if material.

(b) Notwithstanding the foregoing, notice of Listed Events described in paragraph (a)(8) and (9) above need not be given under this Section 5 any earlier than the notice (if any) of the underlying event is given to the Bondholders of affected Bonds pursuant to the Resolution. (c) The content of any notice of the occurrence of a Listed Event shall be determined by the Board of Education and shall be in substantially the form attached as Exhibit B. SECTION 6. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the School District from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the School District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the School District shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 7. Termination of Reporting Obligation. The School District reserves the right to terminate its obligations under this Disclosure Certificate if and when the School District no longer remains an Obligated Person with respect to the Bonds within the meaning of the Rule; in particular upon the occurrence of the legal defeasance, prior redemption, or payment in full of all of the Bonds. If such termination or substitution occurs prior to the final maturity of the Bonds, the School District will provide notice of such termination or substitution to EMMA. SECTION 8. Dissemination Agent. The School District, from time to time, may appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. A Dissemination Agent other than the School District shall not be responsible in any manner for

Appendix C - 5

the content of any notice or report prepared by the School District pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Board of Education. SECTION 9. Amendment. Notwithstanding any other provision of this Disclosure Certificate, the School District may amend this Disclosure Certificate if: (a) such amendment is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of the Obligated Person on the Bonds, or type of business conducted; (b) such amendment is supported by an opinion of counsel expert in federal securities laws, to the effect that the undertakings contained herein, as amended, would have complied with the requirements of the Rule on the date hereof, after taking into account any amendments or official interpretations of the Rule, as well as any change in circumstances; and (c) such amendment does not materially impair the interests of the Bondholders, as determined either by an unqualified opinion of nationally recognized bond counsel filed with the School District, or by the approving vote of the Bondholders pursuant to the terms of the Resolution at the time of such amendment. If any provision of this Disclosure Certificate is amended, the first release of the Annual Report containing any amended financial information or operating data shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being provided. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5 and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 10. Default. If the School District fails to comply with any provision of this Disclosure Certificate, any Bondholder’s right to enforce the provisions of this undertaking shall be limited to a right to obtain mandamus or specific performance by court order of the School District’s obligations pursuant to this Disclosure Certificate. Any failure by the School District to comply with the provisions of this Disclosure Certificate shall not be an event of default with respect to the Bonds under the Resolution. SECTION 11. Duties, Immunities, and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and, to the extent allowed by applicable law, the School District agrees to indemnify and save the Dissemination Agent (if other than itself), its officers, directors, employees, and agents, harmless against any loss, expense, and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the School District under this Section 11 shall survive resignation or removal of the Dissemination Agent (if other than itself) and payment of the Bonds. SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the School District, the Dissemination Agent (if other than the School District), the Participating Underwriter, and the Bondholders, and shall create no rights in any other person or entity.

Appendix C - 6

SECTION 13. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 14. Governing Law. This Disclosure Certificate shall be governed by and construed in accordance with the laws of the State of Georgia. SECTION 15. Severability. In case any one or more of the provisions of this Disclosure Certificate shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Disclosure Certificate, but this Disclosure Certificate shall be construed and enforced as if such illegal or invalid provision had not been contained herein. Date: [Date of Issuance] CATOOSA COUNTY SCHOOL DISTRICT (SEAL) By:_______(FORM)______________________ Chairman Board of Education of Catoosa County Attest:____(FORM)_______________________ Secretary Board of Education of Catoosa County

[SIGNATURE PAGE TO CONTINUING DISCLOSURE CERTIFICATE]

Appendix C - 7

Exhibit A

NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Catoosa County School District (Georgia) Name of Bond Issue: $40,000,000 Catoosa County School District General Obligation Sales Tax Bonds, Series 2016 Date of Issuance: _____________, 2016 NOTICE IS HEREBY GIVEN that the Obligor has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate executed by the Obligor, on ___________, 20__. The Issuer anticipates that the Annual Report will be filed by _____________. Dated: _______________ [Name of Dissemination Agent] By:____________________________

____________

Appendix C - 8

Exhibit B

NOTICE OF THE OCCURRENCE OF [Insert the Listed Event]

relating to

$40,000,000 Catoosa County School District (Georgia) General Obligation Sales Tax Bonds, Series 2016 (the “Bonds”)

CUSIP NUMBERS1:

Notice is hereby given that [insert the Listed Event] has occurred. [Describe circumstances leading up to the event, action being taken and anticipated impact.] This notice is based on the best information available at the time of dissemination and is not guaranteed as to accuracy or completeness. Any questions regarding this notice should be directed to [insert instructions for presenting securities, if applicable]. [Notice of a Listed Event constituting defeasance shall include the following: The School District hereby expressly reserves the right to redeem such refunded or defeased bonds prior to their stated maturity date in accordance with the optional/extraordinary redemption provisions of said defeased Bonds. OR The School District hereby covenants not to exercise any optional or extraordinary redemption provisions under the Bond Resolution; however, the sinking fund provision will survive the defeasance. AND The Bonds have been defeased to [maturity/the first call date, which is __________]. This notice does not constitute a notice of redemption and no Bonds should be delivered to the School District or the Paying Agent as a result of this mailing. A Notice of Redemption instructing you where to submit your Bonds for payment will be mailed _______ to _______ days prior to the redemption date.] Dated:_____________________ [Name of Dissemination Agent] By:______________________________ Title

1 No representation is made as to the correctness of the CUSIP number either as printed on the Bonds or as contained herein, and reliance may only be placed on other bond identification contained herein.

Appendix C - 9

DISSEMINATION AGENT’S CERTIFICATE The undersigned hereby certifies that he is an officer of __________________, in the City of Atlanta, Georgia (the “Bank”), a _______________ [national/state] banking corporation duly created and existing under the laws of the _______________ [USA/State of Georgia], holding the office indicated below his signature, that he has personal knowledge of the facts herein set forth, and further certifies as follows: 1. The Bank is authorized and qualified to accept the duties of Dissemination Agent pursuant to appointment by a Disclosure Certificate signed on _____________, 20__ by the Chairman of the Board of Education of Catoosa County, as the managing and controlling body for the Catoosa County School District. 2. By acceptance of its appointment as Dissemination Agent, the Bank covenants and agrees that it will perform all services and assume its duties as such imposed by the Disclosure Certificate for the fees and on the conditions agreed upon with the Catoosa County School District. Signed and sealed as of the ____ day of ____________, 20__. [Name of Dissemination Agent] (CORPORATE SEAL) By:______________________________ [name] [Title] Attest:____________________________ [name] [Title]

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$40,000,000 CATOOSA COUNTY SCHOOL DISTRICT (GEORGIA… · The Bonds are not subject to redemption...

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