[BANK QUALIFIED] Dated: Date of Delivery Due (Loomis … · Jeff Randall, Member Susan Goto, Member...

FIVE NEW ISSUES—BOOK-ENTRY ONLY RATINGS See “RATINGS” herein In the opinion of Quint & Thimmig LLP, San Francisco, California, Bond Counsel, subject to compliance by the Districts with certain covenants, interest on the Notes is excludable from gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but such interest is taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations and the Dry Creek, Loomis and Western Placer Notes are “qualified tax exempt obligations” under the small issuer exception provided under section 265(b)(3) of the Internal Revenue Code of 1986, as amended. In addition, in the opinion of Bond Counsel, interest on the Notes is exempt from personal income taxation imposed by the State of California. See “TAX MATTERS” herein.

$2,000,000 Dry Creek Joint Elementary School District

(Placer County, California) 2012 Tax and Revenue Anticipation Notes

[BANK QUALIFIED]

$2,100,000 Loomis Union School District (Placer County, California)

2012 Tax and Revenue Anticipation Notes [BANK QUALIFIED]

$10,000,000 Rocklin Unified School District (Placer County, California)

2012 Tax and Revenue Anticipation Notes

$7,500,000 Roseville City School District (Placer County, California)


$8,000,000 Western Placer Unified School District


[BANK QUALIFIED] Dated: Date of Delivery Due (Loomis and Western Placer): May 31, 2013 Due (All others): September 24, 2013 The above-captioned Notes (collectively the “Notes”) will be issued in fully registered form, without coupons. The Notes will be registered in the name of Cede & Co., as the nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository of the Notes. Individual purchases of Notes will be made in book-entry form only in denominations of $5,000 or any integral multiple thereof. Purchasers of the Notes will not receive securities certificates representing their ownership interest in the Notes. The principal of and interest on each Note will be paid at maturity by the Treasurer and Tax Collector of the County of Placer (the “County”) as paying agent (the “Paying Agent”), to DTC, which is obligated in turn to remit such principal and interest to its DTC participants for subsequent disbursement to the Beneficial Owners of the Notes, as described herein. See “THE NOTES” herein. The Notes will not be subject to redemption prior to maturity. The Notes of each District are issued to finance, in part, the general fund cash flow requirements of such District (collectively the “Districts” or individually, the “District”) during Fiscal Year 2012-13. The Notes of each District, in accordance with California law, are general obligations of the respective Districts but are payable only out of taxes, income, revenue, cash receipts and other moneys of the respective Districts attributable to Fiscal Year 2012-13 and legally available for payment thereof. See “THE NOTES—Security for and Sources of Payment” herein. The County Resolutions (as defined herein) authorizing the Notes require certain revenues of the Districts pledged to the payment of the Notes to be held by the Paying Agent in trust in a separate fund until the principal of and interest on the Notes has been paid in full or provision has been made therefor. THE DISTRICTS ARE WHOLLY INDEPENDENT LEGAL ENTITIES AND THE NOTES ARE SEPARATE SECURITIES, SEPARATELY ISSUED AND SEPARATELY SECURED BY AND PAYABLE FROM, RESPECTIVELY, THE PLEDGED REVENUES OF EACH DISTRICT. THE OBLIGATION OF EACH DISTRICT TO PAY THE PRINCIPAL OF AND INTEREST ON ITS NOTE IS A GENERAL OBLIGATION SOLELY OF SAID DISTRICT, AND NEITHER THE GENERAL FUND, CREDIT NOR TAXING POWER OF THE OTHER DISTRICTS ARE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE NOTES OF THE OTHER DISTRICTS.

The following firm, serving as financial advisor to the Districts, has structured this issue:

This cover page contains certain information for general reference only. It is not intended to be a summary of the security or terms of this issue. Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision.

Issuer Principal Amount Interest Rate Yield CUSIP† Dry Creek Joint Elementary School District $ 2,000,000 1.500% 0.400% 262386 FP5 Loomis Union School District 2,100,000 1.500 0.350 543451 CT3 Rocklin Unified School District 10,000,000 2.000 0.400 773754 GH3 Roseville City School District 7,500,000 1.000 0.400 777798 JU4 Western Placer Unified School District 8,000,000 2.000 0.350 959214 CQ8

The Notes are offered when, as and if issued by the Districts and accepted by the Underwriter, subject to the approval of legality by Quint & Thimmig LLP, San Francisco, California, Bond Counsel. Certain disclosure matters will be passed upon for the Districts by Quint & Thimmig LLP, San Francisco, California, Disclosure Counsel. It is expected that the Notes in definitive form will be available for delivery to DTC in New York, New York, on or about October 2, 2012.

Southwest Securities, Inc.

Dated: September 18, 2012 †Copyright 2012, American Bankers Association. CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, operated by Standard & Poor’s. This data is not intended to create a database and does not serve in any way as a substitute for CUSIP Global Services. The CUSIP numbers have been assigned by an independent company not affiliated with the Districts and is included solely for the convenience of the registered owners of the Notes. None of the County, the Districts nor the Underwriter is responsible for the selection or uses of the CUSIP numbers and no representation is made as to its correctness on the Notes or as included herein. The CUSIP numbers are subject to being changed after the delivery of the Notes as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of the Notes.

This Official Statement does not constitute an offering of any security other than the original

offering of the Notes by the Districts. No dealer, broker, salesperson or other person has been authorized by the Districts to give any information or to make any representations other than as contained in this Official Statement, and if given or made, such other information or representation not so authorized should not be relied upon as having been given or authorized by the Districts or the Underwriter.

The issuance and sale of the Notes have not been registered under the Securities Act of 1933 in

reliance upon an exemption under section 3(a)2 thereof. This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy securities in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation.

The information set forth herein other than that furnished by the Districts, although obtained

from sources which are believed to be reliable, is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Districts. The information and expressions of opinions herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District since the date hereof. This Official Statement is submitted in connection with the sale of the Notes referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.

Any statement made in this Official Statement involving a forecast, estimate or matter of

expectation or opinion, whether or not expressly so stated, is intended solely as such and not as a representation of fact. Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements”. Such statements are generally identifiable by the terminology used, such as, “are expected to,” “will continue,” “is anticipated,” “forecast,” “expect,” “intend,” “estimate,” “plan,” “budget,” “project,” or similar words and phrases. The achievement of the outcomes projected in such forward-looking statements involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from the expected results expressed or implied by such forward-looking statements. The District does not plan to issue any updates or revisions to those forward-looking statements if or when the expectations, events, conditions or circumstances on which such statements are based occur or fail to occur.

The Underwriter has provided the following sentence for inclusion in this Official Statement: The

Underwriter has reviewed the information in this Official Statement in accordance with, and as a 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.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR

EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE NOTES TO CERTAIN DEALERS AND DEALER BANKS AND BANKS ACTING AS AGENT AT PRICES LOWER THAN THE PUBLIC OFFERING PRICE STATED ON THE COVER PAGE HEREOF AND SAID PUBLIC OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.

This Official Statement is submitted in connection with the sale of the Notes referred to herein

and may not be reproduced or used, in whole or in part, for any other purpose. THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, IN RELIANCE UPON AN EXCEPTION FROM THE REGISTRATION REQUIREMENTS CONTAINED IN SUCH ACT. THE NOTES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

THIS PAGE INTENTIONALLY LEFT BLANK

School District Governing Boards and Superintendents

Dry Creek Joint Elementary School District

Roseville City School District

9707 Cook Riolo Road 1050 Main Street Roseville, CA 95747 Roseville, CA 95678

(916) 770-8800 (916) 771-1600 Scott Otsuka, President Gary Miller, President

Diane Howe, Clerk Hallie Romero, Clerk Tracy Pittman, Member Rene Aguilera, Member

Jeff Randall, Member Susan Goto, Member Jeffrey Holland, Member Brian Vlahos, Member

Brad Tooker, Deputy Superintendent Richard L. Pierucci, Superintendent

Loomis Union School District Rocklin Unified School District 3290 Humphrey Road 2615 Sierra Meadows Drive

Loomis, CA 95650 Rocklin, CA 95677 (916) 652-1800 (916) 624-2428

Jim Foster , President Camille Maben, President Kurt Turner, Clerk Todd Lowell, Vice-President Ann Baker, Trustee Wendy Lang, Clerk

Jeanne Duvall, Trustee Greg Daley, Member Mike Edwards, Trustee Steve Paul, Member

Gordon Medd, Superintendent Kevin Brown, Superintendent

Western Placer Unified School District 600 Sixth Street, Suite 400 Lincoln, California 95648

(916) 645-6350 Damian Armitage, President

Kris Wyatt, Vice President Brian Haley, Clerk

Paul Carras, Member Paul Long, Member

Scott Leaman, Superintendent

Professional Services

Bond Counsel and Disclosure Counsel Financial Advisor Quint & Thimmig LLP Capitol Public Finance Group, LLC San Francisco, California Sacramento, California

Paying Agent

Placer County Treasurer-Tax Collector Auburn, California

TABLE OF CONTENTS

INTRODUCTION ......................................................1

General .....................................................................1Authority for Issuance of the Notes.....................2Purpose of the Notes..............................................2Continuing Disclosure ...........................................2Professionals Involved in the Offering................2Other Information ..................................................3

THE NOTES................................................................3Authority for Issuance ...........................................3Purpose of the Notes..............................................3Description of the Notes........................................3Bank Qualified Obligations...................................3Limitations on Remedies.......................................4Investment of Note Proceeds................................4Book-Entry-Only System.......................................4Paying Agent...........................................................6Registration and Transfer of Notes......................7

SECURITY FOR AND SOURCES OF PAYMENT OF THE NOTES ....................................8

Available Sources of Payment ..............................9Other Funds...........................................................10

PLACER COUNTY INVESTMENT POOL ..........10DRY CREEK JOINT ELEMENTARY SCHOOL DISTRICT ..................................................................11LOOMIS UNION SCHOOL DISTRICT ................16ROCKLIN UNIFIED SCHOOL DISTRICT...........20ROSEVILLE CITY SCHOOL DISTRICT ...............24WESTERN PLACER UNIFIED SCHOOL DISTRICT ..................................................................28LOCAL PROPERTY TAXATION ..........................33

Ad Valorem Property Taxation ............................33Taxation of State-Assessed Utility Property.....33Alternative Method of Tax Apportionment .....34

CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING DISTRICT REVENUES AND APPROPRIATIONS................35

Article XIIIA of the California Constitution .....35Legislation Implementing Article XIIIA ...........35Article XIIIB of the California Constitution......35Unitary Property...................................................36California Lottery .................................................36

Proposition 46 .......................................................36Proposition 39 .......................................................36Article XIIIC and XIIID of the California Constitution .........................................................37

Future Initiatives...................................................38GENERAL SCHOOL DISTRICT INFORMATION.......................................................38

State Funding of Education.................................38State Cash Management Legislation..................39Future Initiatives...................................................40State Budget...........................................................40Recent State Budgets ............................................402012-13 State Budget. ...........................................42Uncertainty Regarding Future State Budgets...43Litigation Challenging State Funding of Education .............................................................44

Significant Accounting Policies and Audited Financial Statements...........................................44

Ad Valorem Property Taxes..................................45Proposition 26 .......................................................45Proposition 98 .......................................................46Supplemental Information Concerning Litigation Against the State of California........47

Propositions 1A and 22 ........................................48State Funding of School Construction ...............49State Retirement Programs..................................49County Office of Education.................................50School District Budget Process ...........................50Temporary Inter-fund Borrowing......................51Accounting Practices............................................52County Investment Pool ......................................52

TAX MATTERS ........................................................52LEGALITY FOR INVESTMENT IN CALIFORNIA ...........................................................54NO LITIGATION .....................................................55APPROVAL OF LEGALITY ...................................55RATINGS...................................................................55FINANCIAL ADVISOR ..........................................55UNDERWRITING....................................................56CONTINUING DISCLOSURE ...............................56ADDITIONAL INFORMATION ...........................56

APPENDIX A: AUDITED FINANCIAL STATEMENTS OF THE DISTRICTS FOR THE YEAR ENDED

JUNE 30, 2011 APPENDIX B: FORM OF CONTINUING DISCLOSURE CERTIFICATES APPENDIX C: PROPOSED FORM OF OPINIONS OF BOND COUNSEL

OFFICIAL STATEMENT

$2,000,000* Dry Creek Joint Elementary School District


$2,100,000*

Loomis Union School District (Placer County, California)


$10,000,000* Rocklin Unified School District


$7,500,000*

Roseville City School District (Placer County, California)


$8,000,000* Western Placer Unified School District


INTRODUCTION This introduction is not a summary of this official statement (the “Official Statement”). It is only

a brief description of and guide to, and is more qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the Notes to potential investors is made only by means of the entire Official Statement.

This Official Statement is provided to furnish information in connection with the sale of

2012 Tax and Revenue Anticipation Notes (collectively, the “Notes” or individually, the “Note”) by the Board of Supervisors of the County of Placer (the “County”), in the name and on behalf of the Dry Creek Joint Elementary School District (“Dry Creek”), the Loomis Union School District (“Loomis”), the Rocklin Unified School District (“Rocklin”), the Roseville City School District (Roseville”) and the Western Placer Unified School District (“Western Placer”) (collectively the “Districts,” or individually, a “District”), in the principal amounts as shown above and on the cover of this Official Statement.

General

The Notes are general obligations of the respective Districts but are payable only out of taxes, income, revenue, cash receipts and other moneys of the respective Districts attributable to the fiscal year ending June 30, 2013 (the “Fiscal Year 2012-13”) and legally available therefor (the “Pledged Revenues”). The Districts may, under existing law, issue the Notes only if the

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principal of and interest on the Notes will not exceed 85% of the estimated moneys which will be lawfully available for the payment of the Notes. The Notes will be dated their date of delivery and will mature on the date set forth on the cover hereof.

Pursuant to the State of California (the “State”) Constitution and laws of the State,

specifically section 53850 et seq. of the California Government Code, the Districts have pledged for the payment of the Notes and the interest thereon certain unrestricted moneys to be received by the Districts as described below.

THE DISTRICTS ARE WHOLLY INDEPENDENT LEGAL ENTITIES, AND THE

NOTES ARE SEPARATE SECURITIES, SEPARATELY ISSUED AND SEPARATELY SECURED BY AND PAYABLE FROM, RESPECTIVELY, THE PLEDGED REVENUES. THE OBLIGATION OF EACH DISTRICT TO PAY THE PRINCIPAL OF AND INTEREST ON ITS NOTE IS A GENERAL OBLIGATION SOLELY OF SAID DISTRICT, AND NEITHER THE GENERAL FUND, CREDIT OR TAXING POWER OF THE OTHER DISTRICTS ARE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE NOTES OF THE OTHER DISTRICTS.

Authority for Issuance of the Notes

The Notes are issued under the authority of Article 7.6, Chapter 4, Part 1, Division 2, Title 5 (commencing with section 53850) of the California Government Code (the “Act”)and pursuant to resolutions adopted by each of the Districts’ Boards (the “District Resolutions”) and a resolution adopted by the County Board (the “County Resolution” and, with the District Resolutions, the “Resolutions”), and, under such statutes, are obligations of the Districts but are payable solely from Pledged Revenues. See “THE NOTES—Authority for Issuance.”

Purpose of the Notes

Proceeds of the Notes will be used and expended for any purpose for which the Districts are authorized to expend funds from the general fund of the Districts, including, but not limited to, current expenses, capital expenditures, investment, and reinvestment, and the discharge of other obligations or indebtedness of the Districts. See “THE NOTES—Purpose of the Notes.”

Continuing Disclosure

The Districts have covenanted for the benefit of the registered owners of the Notes to provide notice of the occurrence of certain enumerated events, which notice will be filed by the Districts with the Municipal Securities Rulemaking Board. The specific nature of the information to be contained in the notices of enumerated events is summarized in APPENDIX B—FORM OF CONTINUING DISCLOSURE CERTIFICATE. These covenants have been made in order to assist the Underwriter in complying with S.E.C. Rule 15c2-12(b)(5). The Districts have never failed to comply in all material respects with any previous undertakings with regard to said Rule to provide annual reports or notices of material events.

Professionals Involved in the Offering

With respect to the Notes, Capitol Public Finance Group, LLC, Sacramento, California has acted as Financial Advisor (the “Financial Advisor”) with respect to the sale and delivery of each Note (see “FINANCIAL ADVISOR”) and Quint & Thimmig LLP, San Francisco, California, has acted as bond counsel (“Bond Counsel”) and as disclosure counsel (“Disclosure Counsel”). The Financial Advisor, Bond Counsel and Disclosure Counsel will receive compensation from the Districts contingent upon the sale and delivery of the Notes.

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Other Information

This Official Statement speaks only as of its date, and the information contained herein is subject to change. Information concerning this Official Statement, the Notes, the Districts or any other information relating to the sale and delivery of the Notes, including the Resolutions and audited financial statements of each District, are available for public inspection and may be obtained by contacting the Districts’ Financial Advisor, Capitol Public Finance Group, LLC, 1900 Point West Way Suite 273, Sacramento, California 95815, telephone (916) 641-2734.

THE NOTES

Authority for Issuance

The Notes are issued pursuant to section 53850 et. seq. of the California Government Code (the “Government Code”) and pursuant to the respective resolutions adopted by the Board of Trustees of each District (the “Governing Boards”) and by the Placer County Board of Supervisors (the “County Board”). The County Board adopted its resolutions authorizing the Notes on June 19, 2012 (together with the resolutions adopted by the Governing Boards, the “Resolutions”).

Purpose of the Notes

The Notes are issued in anticipation of future receipt of moneys intended as general revenues of the Districts. Proceeds of the Notes shall be deposited in the general fund of the Districts in the treasury of the County and shall be used and expended by the Districts for any purpose for which the Districts are authorized to expend funds from their general fund, including, but not limited to, current expenses, capital expenditures, investment and reinvestment and the discharge of other obligations or indebtedness of the Districts.

Description of the Notes

The Notes will be issued in fully registered form without coupons, initially registered in the name of Cede & Co. (“Cede & Co.”), nominee of The Depository Trust Company, New York, New York (“DTC”). As long as the Notes are held by DTC or a successor securities depository, ownership of the Notes will be evidenced by book-entry. See “THE NOTES—Book-Entry Only System.”

The Notes will be dated the date of delivery, will mature (without option of prior

redemption) on September 24, 2013 (May 31, 2013, in the case of Loomis and Western Placer), shall bear interest (payable at maturity and calculated on the basis of a 360-day year of twelve 30-day months) at the rate indicated on the cover page hereof, and shall be issued in fully registered form in denominations of $5,000 principal amount or any integral multiple thereof. Both the interest on and the principal of the Notes will be payable to the registered owners of the Notes. The Treasurer-Tax Collector of the County will act as Paying Agent, Registrar, and Transfer Agent (the “Paying Agent”) with respect to each Note.

The Notes are not subject to redemption prior to their stated maturity date.

Bank Qualified Obligations

Dry Creek, Loomis and Western Placer have designated their Notes as “qualified tax-exempt obligations,” thereby allowing certain financial institutions that are holders of such qualified tax-exempt obligations to deduct a portion of such institution’s interest expense

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allocable to such qualified tax-exempt obligations, all as determined in accordance with section 265(b)(3) of the Internal Revenue Code of 1986, as amended.

Limitations on Remedies

The rights of the Owners of the Notes are subject to certain limitations. Enforceability of the rights and remedies of the Owners of the Notes, and the obligations incurred by the District may become subject to the Federal Bankruptcy Code (defined below) and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect, equity principles which may limit the specific enforcement under State law of certain remedies, the exercise by the United States of America of the powers delegated to it by the Constitution, the reasonable and necessary exercise, in certain exceptional situations, of the police powers inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose and the limitations on remedies against school districts in the State. Bankruptcy proceedings, or the exercise of powers by the federal or State government, if initiated, could subject the Owners of the Notes to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitation, or modification of their rights.

Under Chapter 9 of the Federal Bankruptcy Code (Title 11, United States Code), which

governs the bankruptcy proceedings for public agencies, such as the District, there are no involuntary petitions in bankruptcy. If the District was to file a petition under Chapter 9 of the Bankruptcy Code, the Owners, the Paying Agent and the District could be prohibited from taking certain steps to enforce their rights under the Resolutions. In a decision dated March 8, 1995, the United States Bankruptcy Court for the Central District of California ruled that a pledge granted by Orange County, California pursuant to a resolution adopted by that county in connection with the issuance of tax and revenue anticipation notes (“TRANs”) was not effective with respect to general revenues accruing to Orange County after the filing of a petition in bankruptcy. The resolution obligated Orange County to set aside a specified amount of revenues in certain months in order to secure the payment of its TRANs. On July 12, 1995, the United States District Court for the Central District of California reversed the order of the Bankruptcy Court and determined that the obligation created under the resolution adopted by Orange County is a statutory lien which survived the filing of Orange County’s bankruptcy petition. The parties subsequently negotiated a settlement. No assurance can be made that future allegations would not be raised in another bankruptcy proceeding.

Investment of Note Proceeds

Pursuant to the Resolutions, proceeds from the sale of the Notes will be deposited by the Director of Finance in a proceeds fund to the credit of the District. Moneys in such proceeds fund shall be invested as permitted by the laws of the State and the Resolutions, including the State Treasurer’s Local Agency Investment Fund and in investment agreements. The proceeds of the Notes will be invested to mature on or before the maturity date of the Notes. See “PLACER COUNTY INVESTMENT POOL.”

Book-Entry-Only System

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the District believes to be reliable, but the District takes no responsibility for the accuracy thereof. The District cannot and does not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest or principal with respect to the Notes, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Notes, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the

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registered owner of the Notes, or that they will so do on a timely basis or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Official Statement. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.

DTC will act as securities depository for the Notes. The Notes will be issued as fully-

registered securities registered initially in the name of Cede & Co. (DTC’s partnership nominee), or such other name as may be requested by an authorized representative of DTC. One fully-registered Note certificate will be issued for each maturity of the Notes, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company

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

Purchases of Notes under the DTC system must be made by or through Direct

Participants, which will receive a credit for the Notes on DTC’s records. The ownership interest of each actual purchaser of Notes (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Notes are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive Notes representing their ownership interests in Notes, except in the event that use of the book-entry system for the Notes is discontinued.

To facilitate subsequent transfers, all Notes deposited by Direct Participants with DTC

are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Notes with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Notes; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Notes are credited, which may or may not be the Beneficial Owners. The Direct and Indirect

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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.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with

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

Principal and interest payments on the Notes will be made to Cede & Co., or such other

nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the District on a payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Paying Agent, the District or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the County or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Notes at

any time by giving reasonable notice to the County or the District, or the County or the District may decide to discontinue use of the system of book-entry transfers through DTC. Under such circumstances, in the event that a successor securities depository is not obtained, fully registered physical certificates are required to be printed and delivered.

In the event that the book-entry-only system is discontinued, payments of principal and interest

with respect to the Notes shall be payable as described herein under the caption “THE NOTES—Payment,” and transfers will be governed as described herein under the caption “Registration and Transfer of Notes.”

Paying Agent

Payments of interest on and principal of the Notes will be paid by the Paying Agent directly to DTC. DTC will remit such payments to DTC Participants and such payments will thereafter be paid by DTC Participants to the Beneficial Owners. No assurance is given by the District that DTC or DTC Participants will make prompt transfer of payments to Beneficial Owners. The District is not responsible or liable for payments or failures to pay by DTC or any DTC Participant, for sending transaction statements or for maintaining, supervising or reviewing records maintained by DTC or any DTC Participant, or for any other act or omission of DTC or any DTC Participants. The Paying Agents, the District, the County and the Underwriter of the Notes have no responsibility or liability for any aspects of the records relating to or payments made on account of beneficial ownership, or for maintaining, supervising or reviewing any records relating to beneficial ownership, of interests in the Notes.

-7-

The Paying Agent cannot and does not give any assurances that DTC, DTC Participants

or others will distribute payments with respect to the Notes received by DTC or its nominee as the registered owner, or any redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or that DTC will provide service and act in the manner described in this Official Statement.

The Paying Agent shall be entitled to treat the person in whose name any Note is

registered as the owner thereof for all purposes of the County Resolution and for purposes of payment of interest on and principal of the Notes, notwithstanding any notice to the contrary received by the Paying Agent; and the Paying Agent shall not have responsibility for transmitting payments to, communicating with, notifying, or otherwise dealing with any Beneficial Owners of the Notes; and the Paying Agent will have no responsibility or obligations, legal or otherwise, to the Beneficial Owners or to any other party, including DTC or its successors (or substitute depository or its successor), except as the registered owner of any Notes, and the Paying Agent may rely conclusively on its records as to the identity of the registered owners of the Notes.

So long as the outstanding Notes are registered in the name of Cede & Co. or its

registered assigns, the Paying Agent shall cooperate with Cede & Co., as sole registered owner, or its registered assigns in effecting payment of the principal of and interest on the Notes by arranging for payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due.

Registration and Transfer of Notes

The Notes shall be initially issued and registered in the name of “Cede & Co.,” as nominee of The Depository Trust Company, New York, New York and shall be evidenced by a single Note for each of the Notes. Registered ownership of the Notes, or any portion thereof, may not thereafter be transferred except as set forth in the County Resolution.

In the event that the book-entry system as described above is no longer used with respect to the

Notes, the following provisions will govern the registration, transfer, and exchange of the Notes. Subject to the provisions of the County Resolution, the registration of any Note may, in

accordance with its terms, be transferred or exchanged for a like aggregate principal amount of Notes in authorized denominations, upon the registration books kept by the Paying Agent for such purpose, by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Note for cancellation, and in the case of a transfer, accompanied by delivery of a written instrument of transfer, duly executed in a form approved by the Paying Agent.

Whenever any Note shall be surrendered for transfer or exchange, the County shall

execute and the Paying Agent shall deliver a new Note or Notes of authorized denominations, for a like aggregate principal amount. The Paying Agent shall require the registered owner requesting such registration of transfer to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange.

The Paying Agent will keep or cause to be kept, at its office in Santa Clara, California,

sufficient books for the registration and transfer of the Notes, which shall at all times be open to inspection. Upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such books, Notes as hereinbefore provided.

-8-

All Notes surrendered for payment or registration of transfer, if surrendered to any person other than the Paying Agent, shall be delivered to the Paying Agent and shall be promptly canceled. No Note shall be delivered in lieu of or in exchange for any canceled Notes except as expressly permitted under the terms of the County Resolution.

SECURITY FOR AND SOURCES OF PAYMENT OF THE NOTES The principal amount of the Notes, together with interest thereon will be payable only

out of taxes, income, revenue, cash receipts and other moneys which are received by the Districts for Fiscal Year 2012-13 and which are lawfully available for the payment of current expenses and other obligations of the Districts (the “Unrestricted Revenues”). Pursuant to the Act, the Districts have, as described below, pledged their Unrestricted Revenues for the payment of the Notes and the interest thereon.

As security for the payment of the interest on and principal of the Dry Creek Notes, the

County (for and on behalf of Dry Creek) has agreed to deposit in trust in a special fund (the “Dry Creek Repayment Fund”): (i) an amount equal to fifty percent (50%) of the principal amount of the Dry Creek Notes from the Unrestricted Revenues received by Dry Creek in the month ending on January 31, 2013, and (ii) an amount equal to fifty percent (50%) of the principal amount of the Dry Creek Notes and an amount sufficient to pay the interest on the Dry Creek Notes at maturity from the Unrestricted Revenues received by Dry Creek in the month ending on April 30, 2013, together with an amount sufficient (net of anticipated earnings on money in the Repayment Fund) to satisfy and make up any deficiency in the Repayment Fund with respect to the prior required deposits therein (the “Dry Creek Pledged Revenues”).

As security for the payment of the interest on and principal of the Loomis Notes, the

County (for and on behalf of Loomis) has agreed to deposit in trust in a special fund (the “Loomis Repayment Fund”): (i) an amount equal to fifty percent (50%) of the principal amount of the Loomis Notes from the Unrestricted Revenues received by Loomis in the month ending on January 31, 2013, and (ii) an amount equal to fifty percent (50%) of the principal amount of the Loomis Notes and an amount sufficient to pay the interest on the Loomis Notes at maturity from the Unrestricted Revenues received by Loomis in the month ending on April 30, 2013, together with an amount sufficient (net of anticipated earnings on money in the Repayment Fund) to satisfy and make up any deficiency in the Repayment Fund with respect to the prior required deposits therein (the “Loomis Pledged Revenues”).

As security for the payment of the interest on and principal of the Rocklin Notes, the

County (for and on behalf of Rocklin) has agreed to deposit in trust in a special fund (the “Rocklin Repayment Fund”): (i) an amount equal to fifty percent (50%) of the principal amount of the Rocklin Notes from the Unrestricted Revenues received by Rocklin no later than August 10, 2013 (derived from moneys allocable to the 2012-13 fiscal year), (ii) an amount equal to twenty-five percent (25%) of the principal amount of the Rocklin Notes from the Unrestricted Revenues received by Rocklin no later than August 25, 2013 (derived from moneys allocable to the 2012-13 fiscal year), and (iii) an amount equal to twenty-five percent (25%) of the principal amount of the Rocklin Notes and an amount sufficient to pay the interest on the Rocklin Notes at maturity from the Unrestricted Revenues received by Rocklin no later than September 10, 2013 (derived from moneys allocable to the 2012-13 fiscal year), together with an amount sufficient (net of anticipated earnings on money in the Repayment Fund) to satisfy and make up any deficiency in the Repayment Fund with respect to the prior required deposits therein (the “Rocklin Pledged Revenues”).

-9-

As security for the payment of the interest on and principal of the Roseville Notes, the County (for and on behalf of Roseville) has agreed to deposit in trust in a special fund (the “Roseville Repayment Fund”): (i) an amount equal to thirty-three percent (33%) of the principal amount of the Roseville Notes from the Unrestricted Revenues received by Roseville in the month ending on January 31, 2013, (ii) an amount equal to thirty-three percent (33%) of the principal amount of the Roseville Notes from the Unrestricted Revenues received by Roseville in the month ending on April 30, 2013, and (iii) an amount equal to thirty-four percent (34%) of the principal amount of the Roseville Notes and an amount sufficient to pay the interest on the Roseville Notes at maturity from the Unrestricted Revenues received by Roseville in the month ending on August 31, 2013 (derived from moneys allocable to the 2012-13 fiscal year), together with an amount sufficient (net of anticipated earnings on money in the Repayment Fund) to satisfy and make up any deficiency in the Repayment Fund with respect to the prior required deposits therein (the “Roseville Pledged Revenues”).

As security for the payment of the interest on and principal of the Western Placer Notes,

the County (for and on behalf of Western Placer) has agreed to deposit in trust in a special fund (the “Western Placer Repayment Fund” and, with the the Dry Creek Repayment Fund, the Loomis Repayment Fund, the Rocklin Repayment Fund and the Roseville Repayment Fund, the “Repayment Fund”): (i) an amount equal to twenty-five percent (25%) of the principal amount of the Western Placer Notes from the Unrestricted Revenues received by Western Placer in the month ending on January 31, 2013, and (ii) an amount equal to seventy-five percent (75%) of the principal amount of the Western Placer Notes and an amount sufficient to pay the interest on the Western Placer Notes at maturity from the Unrestricted Revenues received by Western Placer in the month ending on April 30, 2013, together with an amount sufficient (net of anticipated earnings on money in the Repayment Fund) to satisfy and make up any deficiency in the Repayment Fund with respect to the prior required deposits therein (the “Western Placer Pledged Revenues” and, with the Dry Creek Pledged Revenues, the Loomis Pledged Revenues, the Rocklin Pledged Revenues and the Roseville Pledged Revenues, the “Pledged Revenues”).

In the event that there have been insufficient Unrestricted Revenues received by the

Districts to permit the deposit into the Repayment Fund of the full amount of the Unrestricted Revenues required to be deposited with respect to such month, then the amount of any deficiency in the Repayment Fund shall be satisfied and made up from any other moneys of the Districts lawfully available for the payment of the interest on and principal of the Notes (all as provided in the Resolutions and sections 53856 and 53857 of the California Government Code).

The Notes are by statute general obligations of the Districts, and to the extent the Notes

are not paid from the Pledged Revenues, the principal of and interest on the Notes shall be paid from any other moneys of the Districts lawfully available therefor.

THE DISTRICTS ARE WHOLLY INDEPENDENT LEGAL ENTITIES, AND THE

NOTES ARE SEPARATE SECURITIES, SEPARATELY ISSUED AND SEPARATELY SECURED BY AND PAYABLE FROM, RESPECTIVELY, PLEDGED REVENUES OF EACH DISTRICT. THE OBLIGATION OF EACH DISTRICT TO PAY THE PRINCIPAL OF AND INTEREST ON ITS NOTE IS A GENERAL OBLIGATION SOLELY OF SAID DISTRICT, AND NEITHER THE GENERAL FUND, CREDIT NOR TAXING POWER OF THE OTHER DISTRICTS ARE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE NOTES OF THE OTHER DISTRICTS.

Available Sources of Payment

The Notes, in accordance with California law, are general obligations of each District, and to the extent not paid from taxes, income, revenue, cash receipts and other moneys received by a District during or allocable to the Fiscal Year pledged for the payment thereof, will be paid

-10-

with interest thereon from any other moneys of such District legally available therefor. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING DISTRICT REVENUES AND APPROPRIATIONS.” The Districts may, under existing law, issue the Notes only if the principal of and interest on the Notes and any other short-term debt will not exceed 85% of the moneys estimated to be legally available for the payment of the Notes and such other debt during the applicable fiscal year.

In addition to each District’s obligation to repay its Notes, the Districts have other

contractual commitments that must be paid from general fund revenues. For information regarding the levels of each District’s expenditure commitments for the Fiscal Year and projected commitments for 2012-13, see “CASH FLOW PROJECTIONS,” “DISTRICT FINANCIAL INFORMATION—Budget” and “DISTRICT FINANCIAL INFORMATION—Significant Accounting Policies and Audited Financial Statements.”

Other Funds

The Districts maintain certain segregated and special purpose funds outside of their general funds not pledged to the payment of the Notes, which could, if needed and to the extent monies are available therein, be accessed on a temporary basis through school district legislative action. Such borrowed amounts must be repaid within the fiscal year borrowed, or in the following fiscal year under certain circumstances. See APPENDIX A—AUDITED FINANCIAL STATEMENTS OF THE DISTRICTS FOR THE YEAR ENDED JUNE 30, 2011 for a description of such other significant funds maintained by the Districts.

PLACER COUNTY INVESTMENT POOL

The following information provides a general description of the County’s investment policy, current portfolio holdings, and valuation procedures. The information has been furnished by the County for use as disclosure information on securities issues. The Districts make no guaranty as to the accuracy or completeness of this information, nor has such information been audited by the Districts. Further information may be obtained directly from the Treasurer-Tax Collector, County of Placer, 2976 Richardson Drive, 2nd Floor, Auburn, California 95603.

The County Treasurer manages, in accordance with California Government Code

section 53600 et seq., funds deposited in the Treasury by the County, all school and community college districts within the County, and various special districts within the County. State law requires that all moneys of the County, school and community college districts and certain special districts be held in the County Treasury by the Treasurer. The County Treasurer accepts funds only from agencies located within the County. The moneys on deposit are predominantly derived from local government revenues consisting of property taxes, state and federal funding and other fees and charges.

Moneys deposited in the County Treasury by the participants represent an undivided

interest in all assets and investments in the County Treasury based upon the amount deposited and the average daily balances. All investments in the County Treasurer’s investment pool are amortized and accrued monthly and are priced on a monthly basis for informational purposes. Gains and losses are recorded when they are actually realized upon sale or other disposition of the investment and adjusting entries for market value are made at year-end if necessary as required by GASB 31. Investment earnings, less actual treasury administrative costs, are distributed monthly to all pool participants on a pro-rata basis based on average daily balance.

The County Treasurer’s investment policy states that preservation of capital and

maintenance of liquidity shall be of primary concern with earnings to be at market rates of

-11-

return commensurate with minimum levels of risk. The County Treasurer maintains a reserve of cash and cash equivalents projected to be more than sufficient to meet foreseeable liquidity needs. The County Treasurer’s investment policy allows for the purchase of a variety of securities as specified by California Government Code sections 53601 and 53635 with further limitations and specifications regarding market risk, maturity, credit ratings, and diversification. The County Board of Supervisors adopts the County Treasurer’s investment policy annually. The County Treasury Oversight Committee monitor’s the County Treasurer’s conformance to the investment policy. Copies of the County Treasurer’s investment policy can be obtained from the County Treasurer-Tax Collector, 2976 Richardson Drive, Auburn, California 95603.

The following is a summary of the Treasurer’s Investment Pool as of July 31, 2012:

Type of Investment

Market Value

Book Value

% of Portfolio(2)

U.S. Treasury Securities $ 72,073,900.00 $ 70,627,479.60 7.72 Federal Agency Coupons 351,403,736.11 350,057,178.69 38.27 Medium Term Notes 262,884,980.00 261,708,551.30 28.61 Negotiable Certificates of Deposit 80,076,183.33 80,020,781.22 8.75 PFA – HELICOPTER 888,442.55 888,442.55 0.10 Local Agency GO Bond 65,000.00 65,000.00 0.01 Local Agency Bonds 73,172,486.00 73,172,486.00 8.00 Rolling Repurchase Agreements - 2 77,204,063.26 77,204,063.26 8.44 mPower Placer 1,046,717.78 1,046,717.78 0.11 Total Investments $918,815,509.03 $914,790,700.40 100.00% Cash Passbook/Checking (not included in yield calculations) 52,091,349.37 52,091,349.37

Total Cash and Investments $970,906,858.40 $966,882,049.77 Source: County of Placer Treasurer-Tax Collector’s Office. (1) Market Value priced at Book Value. (2) Excluding cash.

DRY CREEK JOINT ELEMENTARY SCHOOL DISTRICT

General Information

Dry Creek was established in 1876 and encompasses approximately 17 square miles located in Placer and Sacramento Counties, including the eastern portion of the unincorporated community known as Antelope. Dry Creek operates seven elementary schools and three middle schools. Dry Creek is governed by a five-member Board of Trustees (the “Dry Creek Board”), each member of which is elected to a four-year term. Elections for positions to the Board are held every two years, alternating between two and three available positions. The management and policies of Dry Creek are administered by a Superintendent appointed by the Dry Creek Board who is responsible for the day to day operation as well as supervision of Dry Creek’s other key personnel. Mark Geyer is the Dry Creek Superintendent, and Brad Tooker is the Dry Creek Deputy Superintendent.

-12-

Average Daily Attendance and Revenue Limit

The following table reflects historical and estimated average daily attendance for Dry Creek. A.D.A. calculations are based on actual attendance.


Average Daily Attendance

Academic Year 2008-09 2009-10 2010-11 2011-12 2012-13 Average Daily Attendance 7,044 7,000 7,042 6,944 6,848 *Academic Year 2012-13 is estimated.

Dry Creek’s annual revenue limit per A.D.A. was $6,212 per A.D.A. for 2011-12, and is

projected to be approximately $6,415 per A.D.A. for 2012-13. See “GENERAL SCHOOL DISTRICT FINANCIAL INFORMATION—State Funding of Education” for an explanation of revenue limit funding.

Employee Relations

The certificated employees of Dry Creek are represented by the Dry Creek Teachers Association (the “DCTA”). The classified employees of Dry Creek are represented by the Amalgamated Transit Union (the “ATU”) and the California School Employees Association (the “CSEA”). The DCTA contract expires on June 30, 2012. The ATU contract expires on June 30, 2012.

Retirement Programs

Dry Creek’s contribution to STRS for fiscal year 2011-12 was estimated to be $2,097,279 and in fiscal year 2012-13 is projected to be $2,092,889 Dry Creek’s contribution to PERS for fiscal year 2011-12 was estimated to be $560,075 and in fiscal year 2012-13 is projected to be $572,791.

General Fund Budget and Comparative Financial Statements

Dry Creek filed its 2011-12 First Interim Financial Report with the Placer County Office of Education using financial information available as of October 31, 2011, with a positive certification within the meaning of section 42133 of the California Education Code. Dry Creek filed its 2011-12 Second Interim Financial Report with the Placer County Office of Education using financial information available as of January 31, 2012, with a positive certification within the meaning of section 42133 of the California Education Code.

-13-

The following table reflects Dry Creek’s general fund revenues, expenditures and fund balances from fiscal year 2009-10 through fiscal year 2012-13. Year-end general fund balances are comprised of reserved and unreserved funds, including a reserve for economic uncertainty.

DRY CREEK JOINT ELEMENTARY SCHOOL DISTRICT General Fund Revenues, Expenditures and Fund Balance

2009-10 Audited

2010-11 Audited

2011-12 Unaudited

Actuals

2012-13 Budget

REVENUES Revenue Limit Sources: $34,595,096 $36,381,093 $35,874,570 $32,154,334 Federal Revenue Sources 2,670,360 2,815,465 3,313,454 2,241,545 Other State Revenues 6,602,503 6,158,825 6,429,874 5,637,707 Other Local Revenues 3,248,695 3,031,553 3,689,171 3,184,128

Total Revenues 47,116,654 48,386,936 49,307,069 43,217,714 EXPENDITURES Salaries: Certificated Salaries 26,077,622 25,767,295 25,663,561 25,596,976 Classified Salaries 6,314,603 5,977,222 5,929,327 5,617,760 Employee Benefits 8,414,530 8,193,242 8,462,882 8,196,174 Books and Supplies 1,383,751 2,157,509 1,746,908 1,578,070 Services and Other Operating Expenditures 3,590,288 3,668,442 3,752,237 5,376,618 Capital Outlay 292,255 243,469 577,623 33,422 Other Outgo 640,855 949,080 1,211,316 1,361,722 Debt Service 82,533 0 0 0

Total Expenditures 46,796,437 46,956,259 47,343,857 47,760,742 TOTAL OTHER FINANCING SOURCES (USES) (420,272) 3,063 151,539 5,000 CHANGE IN FUND BALANCE (100,055) 1,433,740 2,115,051 (4,538,028) BEGINNING FUND BALANCE 11,525,247 11,425,192 12,858,932 14,973,983 ENDING FUND BALANCE $11,425,192 $12,858,932 $14,973,983 $10,435,955 Source: 2012-13 Budget Adoption of Dry Creek

Audit

Basic Financial Statements with Management’s Discussion and Analysis and Independent Auditors Report and certain Supplementary Information for the year ended June 30, 2011, are included in APPENDIX A—AUDITED FINANCIAL STATEMENTS OF THE DISTRICTS FOR THE YEAR ENDED JUNE 30, 2011. Dry Creek considers its audited financial statements to be documents of public record. Dry Creek has not requested its auditors, Crowe Horwath LLP, to review this Official Statement, nor have they done so.

Dry Creek Debt

Short-Term Obligations. Dry Creek has in the past issued short-term tax and revenue anticipation notes. On October 5, 2011, Dry Creek issued $2,900,000 of Tax and Revenue Anticipation Notes (the “Dry Creek 2011 TRANs”), which were rated “MIG 1” by Moody’s Investors Service and which mature on October 4, 2012. All funds pledged to repayment of the Dry Creek 2011 TRANs have been set aside for payment on the maturity date of the 2011 Dry Creek TRANs. Dry Creek has never defaulted on any of its short-term obligations.

-14-

General Obligation Bonds. As of June 30, 2011, the principal or denominational amounts of

Dry Creek general obligation bonds outstanding, all payable from ad valorem property taxes levied and collected within Dry Creek by the County, was $48,693,526.

Special Tax Bonds: As of June 30, 2011, the principal or denominational amounts of Dry

Creek special tax bonds outstanding, all payable from special taxes levied and collected within Dry Creek’s community facilities district by the County was $16,629,690.

Current Ratings. Dry Creek’s current credit ratings are as follows:

Standard & Poor’s Moody's Fitch Uninsured Ratings Uninsured Ratings Uninsured Ratings

GO/Issuer Lease GO/Issuer Lease GO/Issuer Lease

AA- NA Aa2 NA AA- NA Assessed Value

The following table shows Dry Creek’s assessed value for the most recent five years:


Assessed Value

Year Assessed Value 2008-09 $3,560,679,258 2009-10 3,341,717,013 2010-11 3,192,009,846 2011-12 3,106,686,444 2012-13 3,062,645,118

Monthly Cash Flows

Dry Creek has prepared for use in this Official Statement the following cash flow statements that show unaudited actual and projected cash receipts and disbursements for Fiscal Year 2011-12, and projected cash receipts and disbursements for Fiscal Year 2012-13.

2011

-201

2 G

ener

al F

und

Act

ual C

ashf

low

Ju

lyA

ugus

tSe

ptem

ber

Oct

ober

Nov

embe

rD

ecem

ber

Janu

ary

Febr

uary

Mar

chA

pril

May

June

Tota

lB

egin

ning

Cas

h$5

,214

,680

$4,1

67,8

17$5

,323

,790

$7,9

16,0

35$1

0,53

1,45

8$9

,803

,525

$14,

819,

994

$15,

151,

500

$11,

380,

652

$8,5

40,6

22$7

,056

,793

$6,3

07,1

82$5

,214

,680

Rec

eipt

s:

R

even

ue L

imit

8,77

911

8,23

12,

981,

808

(53,

989)

2,20

2,23

05,

876,

069

7,14

1,07

65,

651

299,

025

4,43

1,94

82,

624,

919

798,

788

26,4

34,5

34

Fed

eral

Sou

rces

1,17

9,65

328

149,

345

3,67

51,

140

22,2

2930

0,85

853

2,97

644

0,56

350

,021

167,

255

430,

176

3,27

7,92

0

Oth

er S

tate

Sou

rces

59,2

7785

,046

805,

581

187,

298

416,

082

310,

860

786,

626

807,

083

7,15

172

2,89

216

6,91

22,

075,

065

6,42

9,87

4

Loc

al S

ourc

es18

,474

35,9

2237

6,27

411

3,96

323

9,57

623

4,26

170

9,81

318

4,06

520

1,66

215

1,70

991

,295

425,

922

2,78

2,93

4

201

1 TR

AN

Dep

osit

00

02,

922,

566

00

00

00

00

2,92

2,56

6To

tal R

ecei

pts

$1,2

66,1

83$2

39,2

27$4

,313

,008

$3,1

73,5

13$2

,859

,027

$6,4

43,4

18$8

,938

,373

$1,5

29,7

75$9

48,4

01$5

,356

,570

$3,0

50,3

81$3

,881

,791

$41,

999,

668

Dis

burs

emen

ts:

Sal

arie

s and

Ben

efits

2,99

9,36

73,

281,

058

3,39

1,04

73,

305,

771

3,42

5,93

721

0,90

76,

390,

963

3,28

8,04

63,

337,

389

3,36

1,66

03,

274,

756

3,78

8,87

040

,055

,771

S

uppl

ies a

nd S

ervi

ces

441,

682

385,

558

396,

933

535,

666

399,

099

296,

783

643,

588

399,

724

441,

438

298,

502

517,

700

687,

133

5,44

3,80

8

Cap

ital O

utla

y0

17,9

520

(805

)10

,684

6,08

411

7,93

316

3,40

98,

747

224,

927

6,39

822

,294

577,

624

O

ther

Out

go0

00

00

00

(46,

289)

00

00

(46,

289)

2

011

TRA

N P

aym

ent P

ledg

e0

00

00

01,

450,

000

00

1,45

0,00

058

,000

02,

958,

000

Tota

l Dis

burs

emen

ts$3

,441

,049

$3,6

84,5

68$3

,787

,981

$3,8

40,6

33$3

,835

,721

$513

,774

$8,6

02,4

84$3

,804

,890

$3,7

87,5

74$5

,335

,089

$3,8

56,8

54$4

,498

,297

$48,

988,

915

Prio

r Yea

r Tra

nsac

tions

1,12

8,00

34,

601,

315

2,06

7,21

73,

282,

542

248,

761

(913

,175

)(4

,382

)(1

,495

,733

)(8

56)

(1,5

05,3

10)

56,8

61(1

,246

,529

)6,

218,

714

Net

Incr

ease

/Dec

reas

e(1

,046

,863

)1,

155,

974

2,59

2,24

52,

615,

423

(727

,932

)5,

016,

468

331,

506

(3,7

70,8

49)

(2,8

40,0

30)

(1,4

83,8

29)

(749

,611

)(1

,863

,035

)(7

70,5

33)

End

ing

Bal

ance

$4,1

67,8

17$5

,323

,790

$7,9

16,0

35$1

0,53

1,45

8$9

,803

,525

$14,

819,

994

$15,

151,

500

$11,

380,

652

$8,5

40,6

22$7

,056

,793

$6,3

07,1

82$4

,444

,147

$4,4

44,1

47

2012

-201

3 G

ener

al F

und

Proj

ecte

d C

ashf

low

Ju

lyA

ugus

tSe

ptem

ber

Oct

ober

Nov

embe

rD

ecem

ber

Janu

ary

Febr

uary

Mar

chA

pril

May

June

Tota

lB

egin

ning

Cas

h$4

,444

,147

$7,1

96,5

63$7

,559

,415

$7,6

80,0

91$5

,616

,605

$2,3

15,8

29$4

,378

,116

$7,3

74,1

89$5

,457

,554

$2,4

36,0

60$1

,495

,885

$648

,520

$4,4

44,1

47

Rec

eipt

s:

R

even

ue L

imit

23,7

8023

,780

2,18

0,20

339

,966

1,54

7,66

81,

558,

009

9,29

0,51

239

,966

39,9

662,

818,

772

2,60

6,80

561

9,13

620

,788

,563

F

eder

al S

ourc

es0

40,0

000

21,1

770

24,7

5033

8,59

752

2,59

324

,750

404,

328

025

,500

1,40

1,69

5

Oth

er S

tate

Sou

rces

81,2

4081

,240

237,

445

029

8,32

989

0,36

452

4,32

640

9,30

554

0,47

049

3,39

915

2,37

747

0,18

94,

178,

684

L

ocal

Sou

rces

8,42

231

,522

303,

468

8,42

214

,672

225,

152

235,

052

855,

181

8,42

241

,795

123,

109

250,

201

2,10

5,41

7

201

2 TR

AN

Dep

osit

00

02,

018,

739

00

00

00

00

2,01

8,73

9To

tal R

ecei

pts

$113

,442

$176

,542

$2,7

21,1

16$2

,088

,304

$1,8

60,6

68$2

,698

,275

$10,

388,

486

$1,8

27,0

44$6

13,6

08$3

,758

,295

$2,8

82,2

91$1

,365

,026

$30,

493,

097

Dis

burs

emen

ts:

Sal

arie

s and

Ben

efits

3,04

2,05

73,

278,

030

3,40

6,27

63,

369,

294

3,41

6,77

421

4,54

06,

428,

292

3,31

6,74

73,

380,

831

3,36

0,64

73,

294,

029

2,79

7,88

239

,305

,400

S

uppl

ies a

nd S

ervi

ces

553,

151

801,

441

557,

647

782,

496

531,

354

421,

448

376,

476

438,

918

375,

336

320,

475

447,

613

404,

191

6,01

0,54

5

Cap

ital O

utla

y16

,711

16,7

110

00

00

00

00

033

,422

2

012

TRA

N P

aym

ent P

ledg

e0

00

00

01,

000,

000

00

1,02

9,33

30

02,

029,

333

Tota

l Dis

burs

emen

ts$3

,611

,919

$4,0

96,1

82$3

,963

,923

$4,1

51,7

91$3

,948

,128

$635

,988

$7,8

04,7

68$3

,755

,664

$3,7

56,1

68$4

,710

,455

$3,7

41,6

41$3

,202

,073

$47,

378,

700

Prio

r Yea

r Tra

nsac

tions

6,25

0,89

34,

282,

493

1,36

3,48

30

(1,2

13,3

16)

041

2,35

511

,985

121,

066

11,9

8511

,985

2,01

6,52

813

,269

,458

Net

Incr

ease

/Dec

reas

e2,

752,

416

362,

852

120,

676

(2,0

63,4

86)

(3,3

00,7

76)

2,06

2,28

72,

996,

073

(1,9

16,6

35)

(3,0

21,4

93)

(940

,175

)(8

47,3

65)

179,

482

(3,6

16,1

45)

End

ing

Bal

ance

$7,1

96,5

63$7

,559

,415

$7,6

80,0

91$5

,616

,605

$2,3

15,8

29$4

,378

,116

$7,3

74,1

89$5

,457

,554

$2,4

36,0

60$1

,495

,885

$648

,520

$828

,002

$828

,002

DR

Y C

RE

EK

JO

INT

EL

EM

EN

TAR

Y S

CH

OO

L D

IST

RIC

T20

12 T

ax a

nd R

even

ue A

ntic

ipat

ion

Not

es

-16-

LOOMIS UNION SCHOOL DISTRICT

General Information

Loomis was established in 1856. In 2005, Loomis annexed the Penryn Elementary School

District. On November 6, 2007 voters approved the merger of Ophir Elementary School District into Loomis. The merger took effect on July 1, 2008. Loomis encompasses approximately 64 square miles, including the town of Loomis, the community of Penryn, and adjacent unincorporated territory within Placer County. Loomis operates six K-8 elementary schools, and one K-6 charter school. Loomis is a feeder district to the Placer Union High School District. Loomis is governed by a five-member Board of Trustees (the “Loomis Board”), each member of which is elected to a four-year term. Elections for positions to the Board are held every two years, alternating between two and three available positions. The management and policies of Loomis are administered by a Superintendent appointed by the Loomis Board who is responsible for the day to day operation as well as supervision of Loomis’ other key personnel. Gordon Medd is Superintendent, and Jay Stewart is the Assistant Superintendent, Business Services and Operations.


The following table reflects historical and estimated average daily attendance for Loomis. A.D.A. calculations are based on actual attendance.



Academic Year 2008-09 2009-10 2010-11 2011-12 2012-13* Average Daily Attendance 2,189 2,167 2,202 2,186 2,134 *Academic Year 2012-13 is estimated.

Loomis’ annual revenue limit per A.D.A. was $5,031 per A.D.A. for 2011-12, and is


Employee Relations

The certificated employees of Loomis are represented by the Loomis Teachers Association (the “LTA”). The classified employees of Loomis are represented by the California School Employees Association, Chapter 571 (the “CSEA 571”). Both contracts are settled through June 30, 2014.

Retirement Programs

Loomis’ contribution to STRS for fiscal year 2011-12 was estimated to be $687,903 and in fiscal year 2012-13 is projected to be $643,659. Loomis’ contribution to PERS for fiscal year 2011-12 was estimated to be $299,047 and in fiscal year 2012-13 is projected to be $304,179.


Loomis filed its 2011-12 First Interim Financial Report with the Placer County Office of Education using financial information available as of October 31, 2011, with a positive

-17-

certification within the meaning of section 42133 of the California Education Code. Loomis filed its 2011-12 Second Interim Financial Report with the Placer County Office of Education using financial information available as of January 31, 2012, with a positive certification within the meaning of section 42133 of the California Education Code.

The following table reflects Loomis’ general fund revenues, expenditures and fund

balances from fiscal year 2009-10 through fiscal year 2012-13. Year-end general fund balances are comprised of reserved and unreserved funds, including a reserve for economic uncertainty.


General Fund Revenues, Expenditures and Fund Balance

2009-10 Audited

2010-11 Audited

2011-12 Estimated

Actuals

2012-13 Budget

REVENUES Revenue Limit Sources: $10,653,921 $11,366,742 $11,265,282 $10,191,872 Federal Revenue Sources 792,224 1,387,566 1,916,975 745,699 Other State Revenues 2,208,059 2,055,796 2,237,347 2,077,670 Other Local Revenues 1,124,667 1,374,566 1,468,620 1,279,397

Total Revenues 14,778,871 16,184,670 16,888,224 14,294,638 EXPENDITURES Salaries: Certificated Salaries 7,987,931 7,550,895 8,379,039 7,869,583 Classified Salaries 2,196,513 2,114,184 2,144,708 2,104,314 Employee Benefits 2,722,867 2,680,318 2,999,159 2,910,270 Books and Supplies 494,829 548,861 858,677 577,613 Services and Other Operating Expenditures 1,690,196 1,565,965 1,701,993 1,536,112 Capital Outlay 25,626 801,162 15,395 0 Other Outgo 279,495 357,850 968,420 929,047 Direct Support and Indirect Costs 0 0 (88,657) (99,531)Debt Service 5,579,279 536,040 0 0

Total Expenditures 20,976,736 16,155,275 16,978,734 15,827,408 TOTAL OTHER FINANCING SOURCES (USES) 5,265,573 826,431 167,924 0 CHANGE IN FUND BALANCE (932,292) 855,826 77,414 (1,532,770) BEGINNING FUND BALANCE 3,086,100 2,540,923 2,704,029 2,781,443 ENDING FUND BALANCE $2,153,808 $3,396,749 $2,781,443 $1,248,673 Source: 2nd Interim Report of Loomis

Audit

Basic Financial Statements with Management’s Discussion and Analysis and Independent Auditors Report and certain Supplementary Information for the year ended June 30, 2011, are included in APPENDIX A—AUDITED FINANCIAL STATEMENTS OF THE DISTRICTS FOR THE YEAR ENDED JUNE 30, 2011. Loomis considers its audited financial statements to be documents of public record. Loomis has not requested its auditors, Perry-Smith LLP, to review this Official Statement, nor have they done so.

-18-

Loomis Debt

Short-Term Obligations. Loomis has in the past issued short-term tax and revenue anticipation notes. On October 5, 2011, Loomis issued $2,000,000 of Tax and Revenue Anticipation Notes (the “Loomis 2011 TRANs”), which were rated “MIG 1” by Moody’s Investors Service and which mature on October 4, 2012. All funds pledged to repayment of the Loomis 2011 TRANs have been set aside for payment on the maturity date of the 2011 Loomis TRANs. Loomis has never defaulted on any of its short-term obligations.


Loomis general obligation bonds outstanding, all payable from ad valorem property taxes levied and collected within Dry Creek by the County, was $6,520,000.

Certificates of Participation: Loomis has outstanding certificates of participation, issued to

fund purchase, construction and renovation of certain school facilities. As of June 30, 2011, Loomis had $4,735,000 of certificates of participation outstanding. Although Loomis certificates of participation are general fund obligations and subject to annual appropriations, revenues from several revenue funds are used by Loomis as the source of lease payments. Loomis has covenanted to include all debt service payments on each of its certificates of participation in its annual budgets.

Current Ratings. Loomis’ current credit ratings are as follows:



A+ A NA NA NA NA Assessed Value

The following table shows Loomis’ assessed value for the most recent five years:


Assessed Value

Year Assessed Value 2008-09 $3,396,671,149 2009-10 3,495,420,926 2010-11 3,328,019,772 2011-12 3,270,589,344 2012-13 3,302,641,292

Monthly Cash Flows

Loomis has prepared for use in this Official Statement the following cash flow statements that show unaudited actual and projected cash receipts and disbursements for Fiscal Year 2011-12, and projected cash receipts and disbursements for Fiscal Year 2012-13.

2011

-201

2 G

ener

al F

und

Act

ual C

ashf

low

Ju

lyA

ugus

tSe

ptem

ber

Oct

ober

Nov

embe

rD

ecem

ber

Janu

ary

Febr

uary

Mar

chA

pril

May

June

Tota

lB

egin

ning

Cas

h$1

,640

,716

$1,4

66,2

08$1

,313

,772

$3,4

36,4

39$2

,004

,354

$882

,717

$5,5

80,4

84$3

,447

,993

$2,6

27,9

75$7

72,8

37$2

,185

,605

$1,2

15,9

61$1

,640

,716

Rec

eipt

s:

R

even

ue L

imit

3,49

0(3

1,68

2)95

7,41

8(5

05,6

87)

271,

953

4,91

9,46

358

5,10

6(7

4,67

9)(5

54,6

06)

3,45

0,18

527

4,55

732

7,03

99,

622,

557

F

eder

al S

ourc

es0

1,02

5,90

31,

007

00

9,12

760

,730

140,

754

123,

839

2,66

5(5

38,5

29)

102,

028

927,

524

O

ther

Sta

te S

ourc

es33

,331

169,

084

259,

931

78,8

7816

0,10

598

,815

294,

110

262,

153

22,7

7423

0,80

678

,042

204,

021

1,89

2,05

0

Loc

al S

ourc

es9,

738

297,

906

126,

626

60,2

6210

3,57

193

,538

182,

801

64,1

7658

,011

77,2

6660

,216

204,

098

1,33

8,20

9

201

1 TR

AN

Dep

osit

00

2,01

0,23

00

00

00

00

00

2,01

0,23

0To

tal R

ecei

pts

$46,

559

$1,4

61,2

11$3

,355

,212

-$21

3,62

3$5

35,6

29$5

,120

,943

$1,1

22,7

47$3

92,4

04-$

349,

982

$3,7

60,9

22-$

125,

714

$851

,458

$15,

957,

766

Dis

burs

emen

ts:

Sal

arie

s and

Ben

efits

400,

359

1,14

2,43

81,

139,

419

1,17

9,49

71,

178,

215

339,

369

2,01

2,47

51,

156,

764

1,20

9,79

31,

175,

292

1,19

1,91

11,

324,

633

13,4

50,1

65

Sup

plie

s and

Ser

vice

s18

5,68

930

8,25

420

7,28

112

6,28

217

6,05

893

,750

226,

629

111,

148

200,

169

169,

042

125,

388

151,

050

2,08

0,74

0

Cap

ital O

utla

y3,

955

7,91

10

3,96

43,

955

3,95

5(2

8,11

3)3,

955

3,95

53,

955

3,95

53,

955

15,4

02

Oth

er O

utgo

00

444,

997

036

5,57

30

47,4

640

76,3

310

34,0

19(2

46,1

06)

722,

278

2

011

TRA

N P

aym

ent P

ledg

e0

00

00

01,

000,

000

00

1,00

0,00

040

,000

02,

040,

000

Tota

l Dis

burs

emen

ts$5

90,0

03$1

,458

,603

$1,7

91,6

97$1

,309

,743

$1,7

23,8

01$4

37,0

74$3

,258

,455

$1,2

71,8

67$1

,490

,248

$2,3

48,2

89$1

,395

,273

$1,2

33,5

32$1

8,30

8,58

5

Prio

r Yea

r Tra

nsac

tions

368,

936

(155

,044

)55

9,15

291

,281

66,5

3513

,898

3,21

759

,445

(14,

908)

135

551,

343

66,9

731,

610,

963

Net

Incr

ease

/Dec

reas

e(1

74,5

08)

(152

,436

)2,

122,

667

(1,4

32,0

85)

(1,1

21,6

37)

4,69

7,76

7(2

,132

,491

)(8

20,0

18)

(1,8

55,1

38)

1,41

2,76

8(9

69,6

44)

(315

,101

)(7

39,8

56)

End

ing

Bal

ance

$1,4

66,2

08$1

,313

,772

$3,4

36,4

39$2

,004

,354

$882

,717

$5,5

80,4

84$3

,447

,993

$2,6

27,9

75$7

72,8

37$2

,185

,605

$1,2

15,9

61$9

00,8

60$9

00,8

60

2012

-201

3 G

ener

al F

und

Proj

ecte

d C

ashf

low

Ju

lyA

ugus

tSe

ptem

ber

Oct

ober

Nov

embe

rD

ecem

ber

Janu

ary

Febr

uary

Mar

chA

pril

May

June

Tota

lB

egin

ning

Cas

h$9

00,8

60$1

,850

,106

$1,1

65,2

17$8

86,3

97$1

,699

,487

$595

,836

$4,9

86,1

45$3

,652

,719

$2,6

11,1

98$1

,203

,141

$2,3

05,3

52$1

,212

,029

$900

,860

Rec

eipt

s:

R

even

ue L

imit

8,32

3(1

33,0

07)

528,

429

(175

,355

)30

3,65

34,

645,

365

1,19

5,43

3(1

55,3

22)

(450

,480

)3,

106,

656

23,1

90(3

4,50

0)8,

862,

385

F

eder

al S

ourc

es0

00

00

10,5

6819

2,45

314

7,14

212

4,52

27,

768

7,76

831

,472

521,

693

O

ther

Sta

te S

ourc

es30

,952

157,

016

241,

380

73,2

4914

8,67

891

,762

273,

120

136,

836

155,

626

201,

774

67,2

1482

,181

1,65

9,78

8

Loc

al S

ourc

es48

,926

48,9

2611

0,36

848

,926

95,7

0995

,709

179,

815

53,4

4148

,926

90,4

6762

,472

67,1

5695

0,84

1

201

2 TR

AN

Dep

osit

00

02,

113,

275

00

00

00

00

2,11

3,27

5To

tal R

ecei

pts

$88,

201

$72,

935

$880

,177

$2,0

60,0

95$5

48,0

40$4

,843

,404

$1,8

40,8

21$1

82,0

97-$

121,

406

$3,4

06,6

65$1

60,6

44$1

46,3

09$1

4,10

7,98

2

Dis

burs

emen

ts:

Sal

arie

s and

Ben

efits

390,

785

1,10

5,09

71,

090,

806

1,13

8,99

71,

137,

385

338,

142

1,93

2,76

61,

104,

164

1,11

6,42

61,

128,

195

1,12

0,23

11,

281,

173

12,8

84,1

67

Sup

plie

s and

Ser

vice

s15

4,47

125

6,40

517

2,43

610

5,05

214

6,46

077

,978

188,

525

107,

001

90,9

1310

2,39

013

0,78

012

2,95

91,

655,

370

O

ther

Out

go2,

956

2,95

639

0,99

72,

956

367,

846

36,9

752,

956

2,95

679

,312

2,95

62,

956

(66,

306)

829,

516

2

012

TRA

N P

aym

ent P

ledg

e0

00

00

01,

050,

000

00

1,07

0,91

30

02,

120,

913

Tota

l Dis

burs

emen

ts$5

48,2

12$1

,364

,458

$1,6

54,2

39$1

,247

,005

$1,6

51,6

91$4

53,0

95$3

,174

,247

$1,2

14,1

21$1

,286

,651

$2,3

04,4

54$1

,253

,967

$1,3

37,8

26$1

7,48

9,96

6

Prio

r Yea

r Tra

nsac

tions

1,40

9,25

760

6,63

449

5,24

20

00

0(9

,497

)0

00

224,

197

2,72

5,83

3

Net

Incr

ease

/Dec

reas

e94

9,24

6(6

84,8

89)

(278

,820

)81

3,09

0(1

,103

,651

)4,

390,

309

(1,3

33,4

26)

(1,0

41,5

21)

(1,4

08,0

57)

1,10

2,21

2(1

,093

,323

)(9

67,3

20)

(656

,151

)

End

ing

Bal

ance

$1,8

50,1

06$1

,165

,217

$886

,397

$1,6

99,4

87$5

95,8

36$4

,986

,145

$3,6

52,7

19$2

,611

,198

$1,2

03,1

41$2

,305

,352

$1,2

12,0

29$2

44,7

10$2

44,7

10

LO

OM

IS U

NIO

N S

CH

OO

L D

IST

RIC

T20

12 T

ax a

nd R

even

ue A

ntic

ipat

ion

Not

es

-20-

ROCKLIN UNIFIED SCHOOL DISTRICT

General Information

Rocklin was established in 1866 and unified in 1987. Rocklin encompasses approximately 19 square miles, including most of the incorporated area of the City of Rocklin, a small portion of the town of Loomis, and adjacent unincorporated territory within Placer County. Rocklin operates ten elementary schools, two middle schools, two comprehensive high schools, and one continuation high school. Rocklin is governed by a five-member Board of Trustees (the “Rocklin Board”), each member of which is elected to a four-year term. Elections for positions to the Board are held every two years, alternating between two and three available positions. The management and policies of Rocklin are administered by a Superintendent appointed by the Rocklin Board who is responsible for the day to day operation as well as supervision of Rocklin’s other key personnel. Kevin Brown is Superintendent, and Barbara Patterson is the Associate Superintendent, Business Services.


ROCKLIN UNIFIED SCHOOL DISTRICT Average Daily Attendance

The following table reflects historical and estimated average daily attendance for

Rocklin. A.D.A. calculations are based on actual attendance.

Academic Year 2008-09 2009-10 2010-11 2011-12 2012-13 Average Daily Attendance 9,936 10,145 10,421 10,687 10,761* *Academic Year 2012-13 is estimated.

Rocklin’s annual revenue limit per A.D.A. was $6,535 per A.D.A. for 2011-12, and is


Employee Relations

The certificated employees of Rocklin are represented by the Rocklin Teachers Professional Association (the “RTPA”). The classified employees of Rocklin are represented by the California School Employees Association, Chapter 773 (the “CSEA 773”). The RTPA contract expires on June 30, 2013. The CSEA 773 contract expires on June 30, 2013.

Retirement Programs

Rocklin’s contribution to STRS for fiscal year 2011-12 was estimated to be $3,182,165 and in fiscal year 2012-13 is projected to be $3,323,110. Rocklin’s contribution to PERS for fiscal year 2011-12 was estimated to be $1,089,584 and in fiscal year 2012-13 is projected to be $1,162,238.


Rocklin filed its 2011-12 First Interim Financial Report with the Placer County Office of Education using financial information available as of October 31, 2011, with a positive certification within the meaning of section 42133 of the California Education Code. Rocklin filed its 2011-12 Second Interim Financial Report with the Placer County Office of Education using

-21-

financial information available as of January 31, 2012, with a positive certification within the meaning of section 42133 of the California Education Code.

The following table reflects Rocklin’s general fund revenues, expenditures and fund


ROCKLIN UNIFIED SCHOOL DISTRICT


2009-10 Audited

2010-11 Audited

2011-12 Estimated

Actuals

2012-13 Budget


Total Revenues 70,782,811 73,611,117 76,393,001 74,105,908 EXPENDITURES Salaries: Certificated Salaries 38,062,991 36,837,162 39,030,375 40,393,497 Classified Salaries 11,773,008 11,417,512 11,868,322 12,193,122 Employee Benefits 13,051,013 12,482,131 13,255,196 13,531,448 Books and Supplies 2,204,683 2,132,749 3,140,157 2,307,203 Services and Other Operating Expenditures 5,788,748 5,520,915 6,794,593 6,219,882 Capital Outlay 247,527 91,578 94,586 0 Other Outgo 1,313,404 1,737,255 1,977,075 1,949,398 Direct Support and Indirect Costs (112,676) (108,446) (111,821) (108,221)Debt Service 0 0 0 0

Total Expenditures 72,328,698 70,110,856 76,048,483 76,486,329 TOTAL OTHER FINANCING SOURCES (USES) (267,884) 70,793 238,097 (337,000) CHANGE IN FUND BALANCE (1,813,771) 3,571,054 582,615 (2,717,421) BEGINNING FUND BALANCE 11,646,236 9,832,465 13,403,519 13,986,134 ENDING FUND BALANCE $9,832,465 $13,403,519 $13,986,134 $11,268,713 Source: 2nd Interim Report of Rocklin

Audit

Basic Financial Statements with Management’s Discussion and Analysis and Independent Auditors Report and certain Supplementary Information for the year ended June 30, 2011, are included in APPENDIX A—AUDITED FINANCIAL STATEMENTS OF THE DISTRICTS FOR THE YEAR ENDED JUNE 30, 2011. Rocklin considers its audited financial statements to be documents of public record. Rocklin has not requested its auditors, Gilbert Associates Inc., to review this Official Statement, nor have they done so.

Rocklin Debt

Short-Term Obligations. Rocklin has in the past issued short-term tax and revenue anticipation notes. On October 5, 2011, Rocklin issued $6,400,000 of Tax and Revenue

-22-

Anticipation Notes (the “Rocklin 2011 TRANs”), which were rated “MIG 1” by Moody’s Investors Service and which mature on October 4, 2012. All funds pledged to repayment of the Rocklin 2011 TRANs have been set aside for payment on the maturity date of the 2011 Rocklin TRANs. Rocklin has never defaulted on any of its short-term obligations.


Rocklin general obligation bonds outstanding, all payable from ad valorem property taxes levied and collected within Dry Creek by the County, was $75,057,250.

Certificates of Participation: Rocklin has outstanding certificates of participation, issued to

fund purchase, construction and renovation of certain school facilities. As of June 30, 2011, Rocklin had $19,890,000 of certificates of participation outstanding. Although Rocklin certificates of participation are general fund obligations and subject to annual appropriations, revenues from several revenue funds are used by Rocklin as the source of lease payments. Rocklin has covenanted to include all debt service payments on each of its certificates of participation in its annual budgets.

Special Tax Bonds: As of June 30, 2011, the principal or denominational amounts of

Rocklin special tax bonds outstanding, all payable from special taxes levied and collected within Rocklin’s community facilities districts by the County, was $66,254,057.

Capital Leases: Rocklin has entered into certain financing leases of equipment, portable

buildings, furniture and vehicles. The combined future minimum payment of all of these lease obligations of Rocklin, all payable from the general fund, of Rocklin, as of June 30, 2011, was $11,523.

Current Ratings. Rocklin’s current credit ratings are as follows:



A+ NA Aa2 NA NA NA Assessed Value

The following table shows Rocklin’s assessed value for the most recent five years:

ROCKLIN UNIFIED SCHOOL DISTRICT Assessed Value

Year Assessed Value

2008-09 $7,331,352,566 2009-10 7,011,707,685 2010-11 6,535,718,803 2011-12 6,311,322,489 2012-13 6,233,015,286

Monthly Cash Flows

Rocklin has prepared for use in this Official Statement the following cash flow statements that show unaudited actual and projected cash receipts and disbursements for Fiscal Year 2011-12, and projected cash receipts and disbursements for Fiscal Year 2012-13.

2011

-201

2 G

ener

al F

un

d A

ctu

al C

ash

flow

Ju

lyA

ugus

tSe

ptem

ber

Oct

ober

Nov

embe

rD

ecem

ber

Janu

ary

Febr

uary

Mar

chA

pril

May

June

Tota

lB

egin

nin

g C

ash

$2,3

38,2

71$7

77,2

07($

4,35

1,76

7)$4

,520

,730

$5,7

97,8

55$3

,997

,373

$17,

017,

684

$12,

817,

562

$8,5

16,8

12$3

,450

,073

$7,1

44,0

42$3

,092

,318

$2,3

38,2

71

Rec

eip

ts:

Rev

enue

Lim

it16

,355

23,3

453,

923,

133

(49,

437)

2,69

2,45

215

,364

,921

7,57

0,40

8(1

39,9

44)

(37,

211)

11,4

81,7

311,

859,

323

1,24

0,73

743

,945

,814

F

eder

al S

ourc

es0

1,90

01,

785,

672

4,94

550

,178

29,9

2826

0,52

41,

136,

185

602,

971

17,6

9561

,131

158,

711

4,10

9,83

9

Oth

er S

tate

Sou

rces

105,

011

155,

113

795,

850

240,

511

604,

127

406,

950

1,19

6,05

353

8,79

098

,023

1,30

5,19

040

4,29

188

9,31

66,

739,

225

L

ocal

Sou

rces

2947

,170

516,

270

229,

587

368,

372

519,

680

855,

762

148,

125

175,

230

251,

527

189,

089

664,

526

3,96

5,36

7

201

1 TR

AN

Dep

osit

00

6,48

3,64

80

00

00

00

00

6,48

3,64

8T

otal

Rec

eip

ts$1

21,3

95$2

27,5

28$1

3,50

4,57

3$4

25,6

06$3

,715

,129

$16,

321,

479

$9,8

82,7

48$1

,725

,032

$869

,416

$13,

074,

554

$2,6

66,0

94$2

,954

,706

$65,

488,

256

Dis

bu

rsem

ents

:

S

alar

ies a

nd B

enef

its4,

164,

886

4,92

1,07

65,

286,

665

5,33

4,36

35,

575,

521

1,30

1,54

19,

594,

342

5,29

4,81

45,

487,

278

5,41

7,21

85,

608,

566

5,99

6,00

763

,982

,275

S

uppl

ies a

nd S

ervi

ces

466,

023

563,

072

859,

133

829,

789

663,

293

504,

554

1,18

7,53

360

0,17

162

3,07

367

0,85

389

4,67

541

4,63

48,

276,

804

C

apita

l Out

lay

00

08,

000

5,00

035

,929

00

00

15,5

810

64,5

10

Oth

er O

utgo

00

03,

825

00

06,

961

42,6

927,

062

0(1

56,5

07)

(95,

968)

2

011

TRA

N P

aym

ent P

ledg

e0

00

00

03,

200,

000

00

3,20

0,00

012

8,00

00

6,52

8,00

0T

otal

Dis

bu

rsem

ents

$4,6

30,9

09$5

,484

,147

$6,1

45,7

97$6

,175

,977

$6,2

43,8

14$2

,029

,148

$13,

981,

875

$5,7

19,6

75$6

,153

,042

$9,2

95,1

33$6

,646

,821

$6,2

54,1

34$7

8,76

0,47

3

Pri

or Y

ear

Tra

nsa

ctio

ns

2,94

8,45

012

7,64

61,

513,

722

7,02

7,49

672

8,20

4(1

,272

,020

)(1

00,9

95)

(306

,107

)21

6,88

8(8

5,45

2)(7

0,99

6)24

3,42

110

,970

,258

Net

In

crea

se/D

ecre

ase

(1,5

61,0

64)

(5,1

28,9

74)

8,87

2,49

81,

277,

124

(1,8

00,4

81)

13,0

20,3

11(4

,200

,123

)(4

,300

,750

)(5

,066

,739

)3,

693,

969

(4,0

51,7

23)

(3,0

56,0

07)

(2,3

01,9

59)

En

din

g B

alan

ce$7

77,2

07($

4,35

1,76

7)$4

,520

,730

$5,7

97,8

55$3

,997

,373

$17,

017,

684

$12,

817,

562

$8,5

16,8

12$3

,450

,073

$7,1

44,0

42$3

,092

,318

$36,

312

$36,

312

2012

-201

3 G

ener

al F

un

d P

roje

cted

Cas

hfl

ow

July

Aug

ust

Sept

embe

rO

ctob

erN

ovem

ber

Dec

embe

rJa

nuar

yFe

brua

ryM

arch

Apr

ilM

ayJu

neTo

tal

Beg

inn

ing

Cas

h$3

6,31

2$5

,433

,938

$5,9

82,7

48$4

,874

,961

$9,8

68,9

78$6

,660

,205

$18,

774,

111

$14,

329,

839

$11,

795,

332

$5,9

70,8

99$1

2,95

3,78

0$7

,564

,402

$36,

312

Rec

eip

ts:

Rev

enue

Lim

it13

,545

394,

723

3,22

8,51

598

4,10

21,

976,

992

14,6

48,5

383,

977,

474

1,61

5,61

3(3

93,3

84)

11,8

47,2

1262

6,35

065

,617

38,9

85,2

97

Fed

eral

Sou

rces

01,

671

5,97

74,

349

41,0

7527

,810

159,

680

861,

750

564,

901

18,3

8332

,709

159,

874

1,87

8,17

9

Oth

er S

tate

Sou

rces

105,

013

155,

115

816,

192

120,

868

264,

847

404,

098

1,27

0,77

289

9,72

310

6,03

11,

021,

756

310,

279

755,

592

6,23

0,28

6

Loc

al S

ourc

es0

46,9

1957

2,89

317

6,60

940

4,17

252

4,89

21,

046,

142

60,4

2212

2,86

925

3,57

717

8,03

688

1,54

54,

268,

076

2

012

TRA

N D

epos

it0

00

10,1

43,8

600

00

00

00

010

,143

,860

Tot

al R

ecei

pts

$118

,558

$598

,428

$4,6

23,5

77$1

1,42

9,78

8$2

,687

,086

$15,

605,

338

$6,4

54,0

68$3

,437

,508

$400

,417

$13,

140,

928

$1,1

47,3

74$1

,862

,628

$61,

505,

698

Dis

bu

rsem

ents

:

S

alar

ies a

nd B

enef

its4,

295,

059

5,07

2,10

95,

448,

945

5,49

7,32

15,

745,

958

1,33

6,48

39,

892,

536

5,45

6,81

85,

654,

985

5,58

2,88

45,

778,

990

5,94

8,88

865

,710

,976

S

uppl

ies a

nd S

ervi

ces

394,

707

476,

904

727,

659

702,

806

561,

789

427,

342

1,00

5,80

450

8,32

652

7,72

456

8,19

275

7,76

285

5,50

87,

514,

523

O

ther

Out

go0

00

3,77

60

00

6,87

142

,141

6,97

10

059

,759

2

012

TRA

N P

aym

ent P

ledg

e0

00

00

00

00

00

00

Tot

al D

isb

urs

emen

ts$4

,689

,766

$5,5

49,0

13$6

,176

,604

$6,2

03,9

03$6

,307

,747

$2,1

00,8

25$1

0,89

8,34

0$5

,972

,015

$6,2

24,8

50$6

,158

,047

$6,5

36,7

52$6

,804

,396

$73,

622,

258

Pri

or Y

ear

Tra

nsa

ctio

ns

9,96

8,83

45,

499,

395

445,

240

(231

,868

)41

1,88

8(1

,390

,607

)0

00

00

(112

,603

)14

,590

,279

Net

In

crea

se/D

ecre

ase

5,39

7,62

654

8,81

0(1

,107

,787

)4,

994,

017

(3,2

08,7

73)

12,1

13,9

06(4

,444

,272

)(2

,534

,507

)(5

,824

,433

)6,

982,

881

(5,3

89,3

78)

(5,0

54,3

71)

2,47

3,71

9

En

din

g B

alan

ce$5

,433

,938

$5,9

82,7

48$4

,874

,961

$9,8

68,9

78$6

,660

,205

$18,

774,

111

$14,

329,

839

$11,

795,

332

$5,9

70,8

99$1

2,95

3,78

0$7

,564

,402

$2,5

10,0

31$2

,510

,031

2013

-201

4 G

ener

al F

un

d P

roje

cted

Cas

hfl

ow

July

Aug

ust

Sept

embe

r 1-2

4To

tal

Be g

inn

ing

Cas

h$2

,510

,031

$8,4

79,2

88$2

,086

,053

$2,5

10,0

31

Rec

eip

ts:

Rev

enue

Lim

it13

,545

543,

706

4,16

6,64

44,

723,

895

F

eder

al S

ourc

es0

1,67

15,

977

7,64

8

Oth

er S

tate

Sou

rces

105,

013

155,

115

816,

192

1,07

6,32

0

Loc

al S

ourc

es0

46,9

1957

2,89

361

9,81

2

201

2 TR

AN

Dep

osit

00

00

Tot

al R

ecei

pts

118,

558

747,

411

5,56

1,70

66,

427,

675

Dis

bu

rsem

ents

:

Sal

arie

s and

Ben

efits

3,88

8,64

94,

581,

649

08,

470,

298

S

uppl

ies a

nd S

ervi

ces

397,

319

480,

060

087

7,37

9

201

2 TR

AN

Pay

men

t Ple

dge

07,

500,

000

2,69

5,55

610

,195

,556

Tot

al D

isb

urs

emen

ts4,

285,

968

12,5

61,7

092,

695,

556

19,5

43,2

33

Pri

or Y

ear

Tra

nsa

ctio

ns

10,1

36,6

675,

421,

063

015

,557

,730

Net

In

crea

se/D

ecre

ase

5,96

9,25

7(6

,393

,235

)2,

866,

150

2,44

2,17

2

En

din

g B

alan

ce$8

,479

,288

$2,0

86,0

53$4

,952

,203

$4,9

52,2

03

RO

CK

LIN

UN

IFIE

D S

CH

OO

L D

IST

RIC

T20

12 T

ax a

nd

Rev

enu

e A

nti

cip

atio

n N

otes

-24-

ROSEVILLE CITY SCHOOL DISTRICT

General Information

Roseville was established in 1869 and encompasses approximately 45 square miles in the southwestern portion of Placer County including part of the City of Roseville. Roseville operates fourteen elementary schools and four middle schools. Roseville is a feeder elementary school district to the Roseville Joint Union High School District. Roseville is governed by a five-member Board of Trustees (the “Roseville Board”), each member of which is elected to a four-year term. Elections for positions to the Board are held every two years, alternating between two and three available positions. The management and policies of Roseville are administered by a Superintendent appointed by the Roseville City Board who is responsible for the day to day operation as well as supervision of Roseville’s other key personnel. Richard Pierucci is Superintendent, and Dennis Snelling is the Assistant Superintendent, Business Services.


The following table reflects historical and estimated average daily attendance for Roseville. A.D.A. calculations are based on actual attendance.




Roseville’s annual revenue limit per A.D.A. was $6,214 per A.D.A. for 2011-12, and is


Employee Relations

The certificated employees of Roseville are represented by the Roseville Teachers Association (the “RTA”). The classified employees of Roseville are represented by the California School Employees Association, Chapter 475 (the “CSEA 475”). The RTA contract expires on June 30, 2013. The CSEA 475 contract expires on June 30, 2013.

Retirement Programs

Roseville’s contribution to STRS for fiscal year 2011-12 was estimated to be $3,034,405 and in fiscal year 2012-13 is projected to be $2,954,015. Roseville’s contribution to PERS for fiscal year 2011-12 was estimated to be $1,301,364 and in fiscal year 2012-13 is projected to be $1,361,170.


Roseville filed its 2011-12 First Interim Financial Report with the Placer County Office of Education using financial information available as of October 31, 2011, with a positive certification within the meaning of section 42133 of the California Education Code. Roseville filed its 2011-12 Second Interim Financial Report with the Placer County Office of Education

-25-

using financial information available as of January 31, 2012, with a positive certification within the meaning of section 42133 of the California Education Code.

The following table reflects Roseville’s general fund revenues, expenditures and fund




2009-10 Audited

2010-11 Audited

2011-12 Unaudited

Actuals

2012-13 Budget


Total Revenues 61,7461,68 66,195,848 68,016,954 60,123,402 EXPENDITURES Salaries: Certificated Salaries 35,757,403 35,497,156 37,278,554 36,337,797 Classified Salaries 7,329,829 7,401,208 7,935,881 8,096,361 Employee Benefits 10,984,133 11,173,838 11,948,418 11,523,231 Books and Supplies 2,985,424 2,880,270 2,751,872 2,436,690 Services and Other Operating Expenditures 5,294,935 5,371,391 5,736,059 5,614,690 Capital Outlay 274,408 102,985 15,511 0 Other Outgo 949,728 1,090,325 2,172,770 2,271,075 Direct Support and Indirect Costs 0 0 (200,084) (214,000)Debt Service 266,131 563,237 0 0

Total Expenditures 63,841,992 64,080,410 67,638,981 66,065,844 TOTAL OTHER FINANCING SOURCES (USES) 505,000 479,516 0 0 CHANGE IN FUND BALANCE (1,590,823) 2,594,954 377,973) (5,942,442) BEGINNING FUND BALANCE 10,304,248 8,713,425 11,308,377 11,686,350 ENDING FUND BALANCE $8,713,425 $11,308,379 $11,686,350 $5,743,908 Source: 2012-13 Adopted Budget of Roseville

Audit

Basic Financial Statements with Management’s Discussion and Analysis and Independent Auditors Report and certain Supplementary Information for the year ended June 30, 2011, are included in APPENDIX A—AUDITED FINANCIAL STATEMENTS OF THE DISTRICTS FOR THE YEAR ENDED JUNE 30, 2011. Roseville considers its audited financial statements to be documents of public record. Roseville has not requested its auditors, Stephen Roatch Accountancy Corporation, to review this Official Statement, nor have they done so.

Roseville Debt

Short-Term Obligations. Roseville has in the past issued short-term tax and revenue anticipation notes. On October 5, 2011, Roseville issued $5,700,000 of Tax and Revenue

-26-

Anticipation Notes (the “Roseville 2011 TRANs”), which were rated “MIG 1” by Moody’s Investors Service and which mature on October 4, 2012. All funds pledged to repayment of the Roseville 2011 TRANs have been set aside for payment on the maturity date of the 2011 Roseville TRANs. Roseville has never defaulted on any of its short-term obligations.


Roseville general obligation bonds outstanding, all payable from ad valorem property taxes levied and collected within Dry Creek by the County, was $51,573,519.

Certificates of Participation: Roseville has outstanding certificates of participation, issued

to fund purchase, construction and renovation of certain school facilities. As of June 30, 2011, Roseville had $12,810,000 of certificates of participation outstanding. Although Roseville certificates of participation are general fund obligations and subject to annual appropriations, revenues from several revenue funds are used by Roseville as the source of lease payments. Roseville has covenanted to include all debt service payments on each of its certificates of participation in its annual budgets.

Capital Leases: Roseville has entered into certain financing leases of equipment, portable

buildings, furniture and vehicles. The combined future minimum payment of all of these lease obligations of Roseville, all payable from the general fund, of Roseville, as of June 30, 2011, was $540,408.

Current Ratings. Roseville’s current credit ratings are as follows:



A+ A Aa2 NA AA- NA Assessed Value

The following table shows Roseville’s assessed value for the most recent five years:

ROSEVILLE CITY SCHOOL DISTRICT Assessed Value

Year Assessed Value

2008-09 $12,656,657,099 2009-10 12,434,534,805 2010-11 11,606,600,867 2011-12 10,984,685,852 2012-13 11,012,713,818

Monthly Cash Flows

Roseville has prepared for use in this Official Statement the following cash flow statements that show unaudited actual and projected cash receipts and disbursements for Fiscal Year 2011-12, and projected cash receipts and disbursements for Fiscal Year 2012-13.

2011

-201

2 G

ener

al F

und

Act

ual C

ashf

low

July

Aug

ust

Sept

embe

rO

ctob

erN

ovem

ber

Dec

embe

rJa

nuar

yFe

brua

ryM

arch

Apr

ilM

ayJu

neTo

tal

Beg

inni

ng C

ash

$1,4

99,7

19$3

,714

,130

$3,3

73,0

48$1

1,14

7,94

1$6

,492

,049

$3,2

72,2

41$1

6,50

8,46

9$1

1,02

8,03

1$7

,664

,198

$3,2

02,1

08$6

,749

,829

$3,0

66,1

28$1

,499

,719

Rec

eipt

s:

R

even

ue L

imit

9,94

812

8,62

13,

161,

999

115,

964

2,09

7,22

714

,407

,817

5,68

5,28

210

,486

317,

160

10,7

74,3

321,

542,

982

1,31

9,24

139

,571

,059

F

eder

al S

ourc

es0

01,

881,

281

060

,295

61,7

2922

3,12

573

1,57

175

5,20

334

,843

42,0

1230

3,57

94,

093,

638

O

ther

Sta

te S

ourc

es75

,531

267,

640

1,14

9,24

924

1,43

649

1,10

639

0,31

277

9,60

91,

499,

903

81,6

1598

3,85

523

4,28

184

5,72

07,

040,

257

L

ocal

Sou

rces

51,0

9946

,933

644,

108

230,

514

429,

040

341,

217

747,

876

74,1

3118

3,91

625

2,65

814

7,97

146

0,73

73,

610,

200

2

011

TR

AN

Dep

osit

00

5,75

9,13

50

00

00

00

00

5,75

9,13

5T

otal

Rec

eipt

s$1

36,5

78$4

43,1

94$1

2,59

5,77

2$5

87,9

14$3

,077

,668

$15,

201,

075

$7,4

35,8

92$2

,316

,091

$1,3

37,8

94$1

2,04

5,68

8$1

,967

,246

$2,9

29,2

77$6

0,07

4,28

9

Dis

burs

emen

ts:

S

alar

ies

and

Ben

efits

639,

919

5,07

5,50

25,

036,

026

5,09

8,52

35,

130,

372

1,23

7,88

39,

068,

615

5,08

0,93

85,

156,

322

5,12

2,30

25,

241,

210

5,29

0,53

257

,178

,144

S

uppl

ies

and

Serv

ices

411,

070

869,

668

618,

913

327,

803

313,

975

801,

570

966,

907

576,

496

616,

252

562,

326

550,

251

1,01

1,78

37,

627,

014

C

apita

l Out

lay

15,5

1219

,618

00

00

019

,763

12,6

710

00

67,5

64

O

ther

Out

go30

,440

00

0(6

2,74

4)0

14,2

500

00

011

4,46

396

,409

2

011

TR

AN

Pay

men

t Ple

dge

00

00

00

2,85

0,00

00

02,

850,

000

114,

000

05,

814,

000

Tot

al D

isbu

rsem

ents

$1,0

96,9

41$5

,964

,788

$5,6

54,9

39$5

,426

,326

$5,3

81,6

03$2

,039

,453

$12,

899,

772

$5,6

77,1

97$5

,785

,245

$8,5

34,6

28$5

,905

,461

$6,4

16,7

78$7

0,78

3,13

1

Pri

or Y

ear

Tra

nsac

tion

s3,

174,

774

5,18

0,51

283

4,06

018

2,52

0(9

15,8

73)

74,6

06(1

6,55

8)(2

,727

)(1

4,73

9)36

,661

254,

514

1,00

0,00

09,

787,

750

Net

Inc

reas

e/D

ecre

ase

2,21

4,41

1(3

41,0

82)

7,77

4,89

3(4

,655

,892

)(3

,219

,808

)13

,236

,228

(5,4

80,4

38)

(3,3

63,8

33)

(4,4

62,0

90)

3,54

7,72

1(3

,683

,701

)(2

,487

,501

)(9

21,0

92)

End

ing

Bal

ance

$3,7

14,1

30$3

,373

,048

$11,

147,

941

$6,4

92,0

49$3

,272

,241

$16,

508,

469

$11,

028,

031

$7,6

64,1

98$3

,202

,108

$6,7

49,8

29$3

,066

,128

$578

,627

$578

,627

2012

-201

3 G

ener

al F

und

Pro

ject

ed C

ashf

low

July

Aug

ust

Sept

embe

rO

ctob

erN

ovem

ber

Dec

embe

rJa

nuar

yFe

brua

ryM

arch

Apr

ilM

ayJu

neTo

tal

Beg

inni

ng C

ash

$578

,627

$1,5

01,4

42$1

,299

,023

$4,4

84,3

42$7

,275

,969

$2,9

28,8

84$1

6,08

5,70

9$1

0,30

8,22

0$6

,958

,596

$3,6

78,6

67$9

,718

,532

$7,4

50,3

92$5

78,6

27

Rec

eipt

s:

R

even

ue L

imit

9,52

662

,990

2,58

3,91

956

,842

1,01

1,82

414

,354

,752

4,61

9,03

16,

767

1,54

6,82

812

,542

,181

2,74

6,30

038

4,18

039

,925

,140

F

eder

al S

ourc

es0

01,

320,

339

042

,317

43,3

2315

6,59

651

3,43

853

0,02

424

,454

29,4

8519

,973

2,67

9,94

9

O

ther

Sta

te S

ourc

es82

,796

293,

382

1,25

9,78

526

4,65

853

8,34

142

7,85

385

4,59

31,

644,

165

89,4

651,

078,

483

256,

814

297,

135

7,08

7,47

0

L

ocal

Sou

rces

64,5

0559

,246

813,

088

290,

989

541,

597

430,

734

944,

079

93,5

7923

2,16

631

8,94

218

6,79

113

0,60

34,

106,

319

2

012

TR

AN

Dep

osit

00

07,

534,

616

00

00

00

00

7,53

4,61

6T

otal

Rec

eipt

s$1

56,8

27$4

15,6

18$5

,977

,131

$8,1

47,1

05$2

,134

,079

$15,

256,

662

$6,5

74,2

99$2

,257

,949

$2,3

98,4

83$1

3,96

4,06

0$3

,219

,390

$831

,891

$61,

333,

494

Dis

burs

emen

ts:

S

alar

ies

and

Ben

efits

625,

801

4,97

5,67

64,

935,

679

4,99

7,07

15,

027,

944

1,23

7,93

88,

863,

169

4,97

9,42

25,

053,

982

5,02

0,31

15,

136,

584

5,10

3,81

255

,957

,389

S

uppl

ies

and

Serv

ices

432,

974

789,

238

646,

033

540,

927

537,

347

934,

391

972,

061

616,

950

609,

691

435,

352

620,

127

916,

289

8,05

1,38

0

O

ther

Out

go35

0,01

133

,635

00

00

011

,201

00

011

4,46

450

9,31

1

2

012

TR

AN

Pay

men

t Ple

dge

00

00

00

2,50

0,00

00

02,

500,

000

00

5,00

0,00

0T

otal

Dis

burs

emen

ts$1

,408

,786

$5,7

98,5

49$5

,581

,712

$5,5

37,9

98$5

,565

,291

$2,1

72,3

29$1

2,33

5,23

0$5

,607

,573

$5,6

63,6

73$7

,955

,663

$5,7

56,7

11$6

,134

,565

$69,

518,

080

Pri

or Y

ear

Tra

nsac

tion

s2,

174,

774

5,18

0,51

22,

789,

900

182,

520

(915

,873

)72

,492

(16,

558)

0(1

4,73

9)31

,468

269,

181

09,

753,

677

Net

Inc

reas

e/D

ecre

ase

922,

815

(202

,419

)3,

185,

319

2,79

1,62

7(4

,347

,085

)13

,156

,825

(5,7

77,4

89)

(3,3

49,6

24)

(3,2

79,9

29)

6,03

9,86

5(2

,268

,140

)(5

,302

,674

)1,

569,

091

End

ing

Bal

ance

$1,5

01,4

42$1

,299

,023

$4,4

84,3

42$7

,275

,969

$2,9

28,8

84$1

6,08

5,70

9$1

0,30

8,22

0$6

,958

,596

$3,6

78,6

67$9

,718

,532

$7,4

50,3

92$2

,147

,718

$2,1

47,7

18

2013

-201

4 G

ener

al F

und

Pro

ject

ed C

ashf

low

Ju

l yA

ugus

tSe

ptem

ber

Tota

lB

egin

nin

g C

ash

$2,1

47,7

18$3

,854

,494

$948

,246

$2,1

47,7

18$0

Rec

eip

ts:

Rev

enue

Lim

it9,

833

65,0

192,

667,

154

2,74

2,00

6

Fed

eral

Sou

rces

00

1,32

0,33

91,

320,

339

O

ther

Sta

te S

ourc

es83

,742

296,

735

1,27

4,18

41,

654,

661

L

ocal

Sou

rces

64,5

0559

,246

813,

088

936,

839

T

rans

fers

In/

Oth

er S

ourc

es0

00

0T

otal

Rec

eip

ts$1

58,0

80$4

21,0

00$6

,074

,765

$6,6

53,8

45

Dis

burs

emen

ts:

S

alar

ies

and

Ben

efits

640,

427

5,08

5,07

05,

033,

622

10,7

59,1

19

Su p

plie

s an

d Se

rvic

es43

7,03

279

6,63

665

2,08

81,

885,

756

O

ther

Out

go54

8,61

952

,721

060

1,34

0

201

2 T

RA

N P

a ym

ent P

ledg

e0

2,57

3,33

30

2,57

3,33

3T

otal

Dis

burs

emen

ts$1

,626

,078

$8,5

07,7

60$5

,685

,710

$15,

819,

548

Pri

or Y

ear

Tra

nsac

tion

s3,

174,

774

5,18

0,51

21,

021,

376

9,37

6,66

2

Net

Inc

reas

e/D

ecre

ase

1,70

6,77

6(2

,906

,248

)1,

410,

431

210,

959

End

ing

Bal

ance

$3,8

54,4

94$9

48,2

46$2

,358

,677

$2,3

58,6

77

RO

SEV

ILL

E C

ITY

SC

HO

OL

DIS

TR

ICT

2012

Tax

and

Rev

enue

Ant

icip

atio

n N

otes

-28-

WESTERN PLACER UNIFIED SCHOOL DISTRICT

General Information

Western Placer, established as a school district in 1966, encompasses approximately 175 square miles and is located in the western portion of the County. Western Placer currently operates seven elementary schools, two middle schools, one high school, one continuation high school, and one charter home school program. The current student-teacher ratio in Western Placer is 25:1 in grade K, 20:1 in grades 1-3, 31:1 in grades 4-5, 25:1 in grades 6-8 and 28:1 in grades 9-12.

Western Placer is governed by a five-member Board of Trustees (the “Western Placer

Board”), each member of which is elected to a four-year term. Elections for positions to the Board are held every two years, alternating between two and three available positions. The management and policies of Western Placer are administered by a Superintendent appointed by the Western Placer Board who is responsible for the day to day operation as well as supervision of Western Placer’s other key personnel. Scott Leaman is Superintendent, and Joyce Lopes, is Assistant Superintendent of Business Services.


The following table reflects historical and estimated average daily attendance for Western Placer. A.D.A. calculations are based on actual attendance.




Western Placer’s annual revenue limit per A.D.A. was $6,491 per A.D.A. for 2011-12, and

is projected to be approximately $6,262 per A.D.A. for 2012-13. See “GENERAL SCHOOL DISTRICT FINANCIAL INFORMATION—State Funding of Education” for an explanation of revenue limit funding.

Employee Relations

Western Placer has two recognized bargaining units which represent its employees. The California Teachers Association, represents teachers, nurses, and librarians. Its contract with Western Placer expires on June 30, 2013. The California School Employees Association represents classified employees. Its contract with Western Placer expires on June 30, 2013.

Retirement Programs

Western Placer’s contribution to STRS for fiscal year 2011-12 was estimated to be $1,966,476 and in fiscal year 2012-13 is projected to be $1,897,838. Western Placer’s contribution to PERS for fiscal year 2011-12 was estimated to be $1,056,158 and in fiscal year 2012-13 is projected to be $1,017,149.

-29-


Western Placer filed its 2011-12 First Interim Financial Report with the Placer County Office of Education using financial information available as of October 31, 2011, with a positive certification within the meaning of section 42133 of the California Education Code. Western Placer filed its 2011-12 Second Interim Financial Report with the Placer County Office of Education using financial information available as of January 31, 2012, with a positive certification within the meaning of section 42133 of the California Education Code.

The following table reflects Western Placer’s general fund revenues, expenditures and

fund balances from fiscal year 2009-10 through fiscal year 2012-13. Year-end general fund balances are comprised of reserved and unreserved funds, including a reserve for economic uncertainty.



2009-10 Audited

2010-11 Audited

2011-12 Estimated

Actuals

2012-13 Budget


Total Revenues 47,318,255 45,797,130 46,533,634 42,927,503 EXPENDITURES Salaries: Certificated Salaries 25,296,276 25,437,724 24,050,658 23,167,559 Classified Salaries 7,250,533 7,416,725 6,876,218 6,241,098 Employee Benefits 9,861,424 10,565,871 10,664,987 10,262,435 Books and Supplies 2,415,064 2,409,875 2,199,361 2,975,068 Services and Other Operating Expenditures 4,407,379 4,190,433 4,193,279 3,558,243 Capital Outlay 828,999 563,152 241,955 10,000 Other Outgo 1,634,666 1,393,152 1,639,204 1,694,974 Debt Service 60,466 5,316 0 0

Total Expenditures 51,754,807 51,982,248 49,865,662 47,909,377 TOTAL OTHER FINANCING SOURCES (USES) 308,679 (109,549) 3,215,739 (5,960) CHANGE IN FUND BALANCE (4,127,873) (6,294,667) (116,289) (4,987,834) BEGINNING FUND BALANCE 18,746,312 16,187,547 8,621,761 8,505,472 ENDING FUND BALANCE $14,618,439 $9,892,880 $8,505,472 $3,517,638 Source: 2nd Interim Report of Western Placer

Audit

Basic Financial Statements with Management’s Discussion and Analysis and Independent Auditors Report and certain Supplementary Information for the year ended June 30, 2011, are included in APPENDIX A—AUDITED FINANCIAL STATEMENTS OF THE DISTRICTS FOR THE YEAR ENDED JUNE 30, 2011. Western Placer considers its audited

-30-

financial statements to be documents of public record. Western Placer has not requested its auditors, Crowe Horwath LLP, to review this Official Statement, nor have they done so.

Western Placer Debt

Short-Term Obligations. Western Placer has in the past issued short-term tax and revenue anticipation notes. On October 5, 2011, Western Placer issued $6,500,000 of Tax and Revenue Anticipation Notes (the “Western Placer 2011 TRANs”), which were rated “MIG 1” by Moody’s Investors Service and which mature on October 4, 2012. All funds pledged to repayment of the Western Placer 2011 TRANs have been set aside for payment on the maturity date of the 2011 Western Placer TRANs. Western Placer has never defaulted on any of its short-term obligations.


Western Placer general obligation bonds outstanding, all payable from ad valorem property taxes levied and collected within Dry Creek by the County, was $6,375,694.

Certificates of Participation: Western Placer has outstanding certificates of participation,

issued to fund purchase, construction and renovation of certain school facilities. As of June 30, 2011, Western Placer had $129,600,000 of certificates of participation outstanding. Although Western Placer certificates of participation are general fund obligations and subject to annual appropriations, revenues from several revenue funds are used by Western Placer as the source of lease payments. Western Placer has covenanted to include all debt service payments on each of its certificates of participation in its annual budgets.

Special Tax Bonds: As of June 30, 2011, the principal or denominational amounts of

Western Placer special tax bonds outstanding, all payable from special taxes levied and collected within Western Placer’s community facilities districts by the County, was $13,465,000.

Capital Leases: Western Placer has entered into certain financing leases of equipment,

portable buildings, furniture and vehicles. The combined future minimum payment of all of these lease obligations of Western Placer, all payable from the general fund, of Western Placer, as of June 30, 2011, was $131,065.

Current Ratings. Western Placer’s current credit ratings are as follows: Standard & Poor’s Moody's Fitch Uninsured Ratings Uninsured Ratings Uninsured Ratings


A+ A NA NA NA NA Assessed Value

The following table shows Western Placer’s assessed value for the most recent five years:

WESTERN PLACER UNIFIED SCHOOL DISTRICT Assessed Value

Year Assessed Value

2008-09 $7,755,117,097 2009-10 7,122,145,824 2010-11 6,611,363,686 2011-12 6,350,965,316 2012-13 6,201,012,743

-31-

Monthly Cash Flows

Western Placer has prepared for use in this Official Statement the following cash flow statements that show unaudited actual and projected cash receipts and disbursements for Fiscal Year 2011-12, and projected cash receipts and disbursements for Fiscal Year 2012-13.

2011

-201

2 G

ener

al F

und

Act

ual C

ashf

low

Ju

lyA

ugus

tSe

ptem

ber

Oct

ober

Nov

embe

rD

ecem

ber

Janu

ary

Febr

uary

Mar

chA

pril

May

June

Tota

lB

egin

ning

Cas

h$9

,159

,199

$5,1

40,2

65$2

,655

,558

$852

,361

$3,2

74,2

70$7

61,3

06$1

7,64

7,06

3$8

,920

,447

$5,7

11,4

20$1

,580

,029

$7,8

38,3

95$4

,476

,774

$9,1

59,1

99

Rec

eipt

s:

R

even

ue L

imit

11,5

30(4

81,5

07)

688,

161

(675

,855

)13

9,48

017

,124

,021

1,72

7,43

1(7

53,7

05)

(1,0

28,6

79)

12,6

12,4

3831

3,49

8(3

64,0

18)

29,3

12,7

95

Fed

eral

Sou

rces

00

00

1,10

7,76

30

198,

237

501,

915

557,

375

26,6

8613

,057

922,

663

3,32

7,69

6

Oth

er S

tate

Sou

rces

49,6

3634

5,84

877

2,75

317

8,68

735

0,91

528

2,92

170

8,60

578

0,81

913

4,59

270

5,67

118

0,84

61,

265,

915

5,75

7,20

8

Loc

al S

ourc

es0

57,1

3229

2,80

148

,818

258,

325

248,

859

564,

922

174,

329

212,

965

178,

437

274,

744

1,29

3,80

13,

605,

133

T

rans

fers

In/O

ther

Sou

rces

00

00

500,

000

00

00

00

2,76

2,43

03,

262,

430

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6,56

7,75

50

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06,

567,

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s$6

1,16

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78,5

27$1

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$6,1

19,4

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,356

,483

$17,

655,

801

$3,1

99,1

95$7

03,3

58-$

123,

747

$13,

523,

232

$782

,145

$5,8

80,7

91$5

1,83

3,01

7

Dis

burs

emen

ts:

Sal

arie

s and

Ben

efits

3,21

4,36

13,

306,

898

3,35

6,66

53,

462,

407

3,51

0,21

429

9,31

26,

706,

172

3,43

8,94

53,

468,

291

3,47

7,87

73,

474,

986

3,87

5,73

541

,591

,863

S

uppl

ies a

nd S

ervi

ces

202,

747

443,

755

571,

788

502,

289

496,

817

433,

816

605,

831

478,

232

480,

905

478,

274

580,

937

1,11

7,24

96,

392,

640

C

apita

l Out

lay

10,3

767,

173

00

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8,54

214

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05,

583

21,2

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39,7

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6,83

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443

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443

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1,12

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(680

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,913

1,83

6,73

12,

957,

226

2

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N P

aym

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ledg

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03,

250,

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3,25

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6,63

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$3,4

27,9

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,758

,269

$3,9

28,8

96$3

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,384

$5,1

28,9

42$8

71,4

16$1

0,56

9,89

2$3

,916

,497

$3,9

55,2

22$7

,227

,818

$4,2

56,8

36$6

,869

,468

$57,

808,

566

Prio

r Yea

r Tra

nsac

tions

(652

,173

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352,

089

371,

985

199,

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259,

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101,

371

(1,3

55,9

19)

4,11

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2,42

2)(3

7,04

8)11

3,07

00

304,

448

Net

Incr

ease

/Dec

reas

e(4

,018

,934

)(2

,484

,707

)(1

,803

,196

)2,

421,

909

(2,5

12,9

64)

16,8

85,7

56(8

,726

,616

)(3

,209

,027

)(4

,131

,391

)6,

258,

366

(3,3

61,6

21)

(988

,676

)(5

,671

,101

)

End

ing

Bal

ance

$5,1

40,2

65$2

,655

,558

$852

,361

$3,2

74,2

70$7

61,3

06$1

7,64

7,06

3$8

,920

,447

$5,7

11,4

20$1

,580

,029

$7,8

38,3

95$4

,476

,774

$3,4

88,0

98$3

,488

,098

2012

-201

3 G

ener

al F

und

Proj

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ashf

low

Ju

lyA

ugus

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Oct

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Nov

embe

rD

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ber

Janu

ary

Febr

uary

Mar

chA

pril

May

June

Tota

lB

egin

ning

Cas

h$3

,488

,098

$2,4

18,8

48$7

12,5

55$6

,167

,843

$2,8

91,4

51$4

73,7

68$1

6,01

1,33

7$7

,092

,046

$4,0

65,2

01$4

17,6

86$3

,753

,435

$2,8

09,1

49$3

,488

,098

Rec

eipt

s:

R

even

ue L

imit

(145

,947

)(1

6,90

3)19

4,14

433

2,95

618

4,91

715

,776

,645

(1,1

98,0

83)

(408

,579

)(4

90,8

79)

12,4

34,5

7950

0,71

21,

306,

142

28,4

69,7

04

Fed

eral

Sou

rces

00

00

632,

942

011

3,26

728

6,77

931

8,46

715

,248

7,46

052

7,18

11,

901,

344

O

ther

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te S

ourc

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,145

307,

589

687,

268

158,

920

312,

095

251,

623

630,

216

694,

441

119,

703

627,

607

160,

840

1,12

5,87

45,

120,

321

L

ocal

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rces

055

,257

283,

193

47,2

1624

9,84

824

0,69

354

6,38

516

8,60

920

5,97

717

2,58

229

4,82

41,

191,

145

3,45

5,72

9

201

2 TR

AN

Dep

osit

00

$8,0

77,6

250

00

00

00

00

8,07

7,62

5To

tal R

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pts

-$84

,402

$345

,943

$9,2

42,2

29$5

39,0

92$1

,379

,803

$16,

268,

961

$91,

785

$741

,250

$153

,268

$13,

250,

015

$963

,837

$4,1

50,3

42$4

7,04

2,12

3

Dis

burs

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ts:

Sal

arie

s and

Ben

efits

3,06

8,49

13,

155,

719

3,20

2,14

13,

301,

713

3,34

7,50

628

2,55

16,

397,

448

3,27

9,99

83,

308,

634

3,31

7,92

53,

314,

951

3,69

4,01

439

,671

,092

S

uppl

ies a

nd S

ervi

ces

207,

208

453,

520

584,

370

513,

342

507,

750

443,

362

619,

162

488,

756

491,

487

488,

798

593,

721

1,14

1,83

46,

533,

311

C

apita

l Out

lay

429

296

00

05,

726

587

023

187

70

1,64

39,

788

O

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Out

go43

043

043

043

0(5

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47)

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6,10

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222

Tota

l Dis

burs

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ts$3

,276

,558

$3,6

09,9

65$3

,786

,941

$3,8

15,4

85$3

,797

,486

$731

,392

$9,0

11,0

77$3

,768

,095

$3,8

00,7

82$9

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,267

$3,9

08,1

22$6

,618

,580

$56,

038,

748

Prio

r Yea

r Tra

nsac

tions

2,29

1,71

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557,

729

00

00

00

00

00

3,84

9,43

9

Inte

rnal

Bor

row

ing

00

00

00

00

00

2,00

0,00

00

2,00

0,00

0

Net

Incr

ease

/Dec

reas

e(1

,069

,250

)(1

,706

,293

)5,

455,

289

(3,2

76,3

93)

(2,4

17,6

83)

15,5

37,5

69(8

,919

,292

)(3

,026

,845

)(3

,647

,515

)3,

335,

749

(944

,286

)(2

,468

,238

)(3

,147

,186

)

End

ing

Bal

ance

$2,4

18,8

48$7

12,5

55$6

,167

,843

$2,8

91,4

51$4

73,7

68$1

6,01

1,33

7$7

,092

,046

$4,0

65,2

01$4

17,6

86$3

,753

,435

$2,8

09,1

49$3

40,9

12$3

40,9

12

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ntic

ipat

ion

Not

es

-33-

LOCAL PROPERTY TAXATION

Ad Valorem Property Taxation

Taxes are levied for each fiscal year on taxable real and personal property located in the County as of the preceding January 1. Real property which changes ownership or is newly constructed is revalued at the time the change in ownership occurs or the new construction is completed. The current year property tax rate will be applied to the reassessment, and the taxes will then be adjusted by a proration factor to reflect the portion of the remaining tax year for which taxes are due.

For assessment and collection purposes, property is classified either as “secured” or

“unsecured” and is listed accordingly on separate parts of the assessment roll. The “Secured roll” is then part of the assessment roll also containing State-assessed property, and property, the taxes on which are a lien on real property sufficient, in the opinion of the County Assessor, to secure payment of the taxes. Other property is assessed on the “unsecured roll.”

Property taxes on the secured roll are due in installments, on November 1 and February

1 of each fiscal year, and if unpaid become delinquent on December 10 and April 20, respectively. A penalty of 10% attaches immediately to all delinquent payments. Property on the secured roll with respect to which taxes are delinquent becomes tax defaulted on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment of a penalty of 1.5% per month from the time of becoming tax delinquent to the time of redemption, plus costs and a redemption fee. If taxes are unpaid for a period of five years or more, the property is subject to sale by the County Treasurer.

Property taxes on the unsecured roll are due on February 1 and if unpaid become

delinquent on August 1. A penalty of 1% attaches immediately to delinquent unsecured taxes. If unsecured taxes are unpaid at 5 p.m. on October 31, an additional penalty of 1.5% attaches to them on the first day of each month until paid. The County has four ways of collecting delinquent unsecured personal property taxes: (1) bringing a civil action against the taxpayer; (2) filing a certificate in the office of the County Clerk specifying certain facts in order to obtain a lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the County Recorder’s office in order to obtain a lien on certain property of the taxpayer; and (4) seizing and selling personal property improvements or possessor’s interest belonging or assessed to the delinquent taxpayer.

Taxation of State-Assessed Utility Property

A portion of property tax revenue of each District is derived from utility property subject to assessment by the State Board of Equalization (“SBE”). State-assessed property, or “unitary property,” is property of a utility system with components located in many taxing jurisdictions that are assessed as part of a “going concern” rather than as individual pieces of real or personal property. The assessed value of unitary and certain other state-assessed property is allocated to the counties by the SBE, taxed at special county-wide rates, and the tax revenues distributed to taxing jurisdictions (including the Districts) according to statutory formulae generally based on the distribution of taxes in the prior year.

Changes in the California electric utility industry structure and in the way in which

components of the industry are regulated and owned, including the sale of electric generation assets to largely unregulated, nonutility companies, may affect how utility assets are assessed in the future, and which local agencies are to receive the property taxes. The Districts are unable to predict the impact of these changes on its utility property tax revenues, or whether legislation

-34-

or litigation may affect ownership of utility assets or the State’s methods of assessing utility property and the allocation of assessed value to local taxing agencies, including the Districts.

Alternative Method of Tax Apportionment

In June of 1993, the Board of Supervisors of the County approved the implementation of the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”), as provided for in section 4701 et seq. of the California Revenue and Taxation Code. Under the Teeter Plan, the County apportions secured property taxes on an accrual basis (irrespective of actual collections) to local political subdivisions, including the District, for which the County acts as the tax-levying or tax-collecting agency.

The Teeter Plan was effective for the fiscal year commencing July 1, 1993, and pursuant

to the Teeter Plan the County purchased all delinquent receivables (comprised of delinquent taxes, penalties, and interest) which had accrued as of June 30, 1993, from local taxing entities and selected special assessment districts and community facilities districts. Under the Teeter Plan, the County distributes tax collections on a cash basis to taxing entities during the fiscal year and at year-end distributes 100% of any taxes delinquent as of June 30th to the respective taxing entities and those special assessment districts and community facilities districts which the County determines are eligible to participate in the Teeter Plan.

The County reserves the right to exclude from the Teeter Plan any special tax levying

agency or assessment levying agency if such agency has provided for accelerated foreclosure proceedings in the event of non-payment of such special taxes or assessments except that, if such agency has a delinquency rate in the collection of such special tax or assessment as of June 30 of any fiscal year that is equal to or less than the County’s delinquency rate on the collection of current year ad valorem taxes on the countywide secured assessment roll, such agency’s special taxes or assessments may, at the County’s option, be included in the Teeter Plan.

The Teeter Plan is to remain in effect unless the Board of Supervisors of the County

orders its discontinuance or unless, prior to the commencement of any fiscal year of the County (which commences on July 1), the Board of Supervisors receives a petition for its discontinuance joined in by resolutions adopted by at least two-thirds of the participating revenue districts in the County, in which event the Board of Supervisors is to order discontinuance of the Teeter Plan effective at the commencement of the subsequent fiscal year. The Board of Supervisors of the County may, by resolution adopted not later than July 15 of the fiscal year for which it is to apply after holding a public hearing on the matter, discontinue the procedures under the Teeter Plan with respect to any tax levying agency or assessment levying agency in the County if the rate of secure tax delinquency in that agency in any year exceeds 3% of the total of all taxes and assessments levied on the secured rolls for that agency. If the Teeter Plan is discontinued subsequent to its implementation, secured property taxes would be allocated to political subdivisions (including the Districts) for which the County acts as the tax-levying or tax-collecting agency as collected (see “Ad Valorem Property Taxation” above).

-35-

CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING DISTRICT REVENUES AND APPROPRIATIONS

The primary source of revenue for the payment of the Notes will be the general fund of

each District. Amounts available to the Districts for such payment will vary, dependent in large part upon funding available from the State. See “GENERAL SCHOOL DISTRICT INFORMATION—State Funding of School Districts.”

Article XIIIA of the California Constitution

Article XIIIA of the California Constitution limits the amount of any ad valorem tax on real property, to 1% of the full cash value thereof, except that additional ad valorem taxes may be levied to pay debt service on indebtedness approved by the voters prior to July 1, 1978 and on bonded indebtedness for the acquisition or improvement of real property which has been approved on or after July 1, 1978 by two-thirds of the voters on such indebtedness. Article XIIIA defines full cash value to mean “the county assessor’s valuation of real property as shown on the 1975-76 tax bill under “full cash value,” or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership have occurred after the 1975 assessment.” The full cash value may be increased at a rate not to exceed 2% per year to account for inflation.

Article XIIIA has subsequently been amended to permit reduction of the “full cash

value” base in the event of declining property values caused by damage, destruction or other factors, to provide that there would be no increase in the “full cash value” base in the event of reconstruction of property damaged or destroyed in a disaster and in other minor or technical ways.

Legislation Implementing Article XIIIA

Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA. Under current law, local agencies are no longer permitted to levy directly any property tax (except to pay voter-approved indebtedness). The 1% property tax is automatically levied by the county and distributed according to a formula among taxing agencies. The formula apportions the tax roughly in proportion to the relative shares of taxes levied prior to 1989.

Increases of assessed valuation resulting from reappraisals of property due to new

construction, change in ownership or from the two percent annual adjustment are allocated among the various jurisdictions in the “taxing area” based upon their respective “situs.” Any such allocation made to a local agency continues as part of its allocation in future years.

All taxable property is shown at full market value on the tax rolls, with tax rates

expressed as $1 per $100 of taxable value. All taxable property value included in this Official Statement is shown at 100% of market value (unless noted differently) and all tax rates reflect the $1 per $100 of taxable value.

Article XIIIB of the California Constitution

Under Article XIIIB of the California State Constitution state and local government entities have an annual “appropriations limit” and are not permitted to spend certain moneys which are called “appropriations subject to limitation” (consisting of tax revenues, state subventions and certain other funds) in an amount higher than the “appropriations limit.” Article XIIIB does not affect the appropriations of moneys which are excluded from the definition of “appropriations subject to limitation,” including debt service on indebtedness

-36-

existing or authorized as of January 1, 1979, or bonded indebtedness subsequently approved by the voters. In general terms, the “appropriations limit” is to be based on certain 1978-79 expenditures, and is to be adjusted annually to reflect changes in consumer prices, populations, and services provided by these entities. Among other provisions of Article XIIIB, if these entities’ revenues in any year exceed the amounts permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years.

Unitary Property

AB 454 (Chapter 921, Statutes of 1986) provides that revenues derived from most utility property assessed by the State Board of Equalization (“Unitary Property”), commencing with the 1988-89 fiscal year, will be allocated as follows: (1) each jurisdiction will receive up to 102% of its prior year State-assessed revenue; and (2) if county-wide revenues generated from Unitary Property are less than the previous year’s revenues or greater than 102% of the previous year’s revenues, each jurisdiction will share the burden of the shortfall or excess revenues by a specified formula. This provision applies to all Unitary Property except railroads, whose valuation will continue to be allocated to individual tax rate areas.

The provisions of AB 454 do not constitute an elimination of the assessment of any State-

assessed properties nor a revision of the methods of assessing utilities by the State Board of Equalization. Generally, AB 454 allows valuation growth or decline of Unitary Property to be shared by all jurisdictions in a county.

California Lottery

In the November 1984 general election, the voters of the State approved a Constitutional Amendment establishing a California State Lottery (the “State Lottery”), the net revenues (revenues less expenses and prizes) of which shall be used to supplement other moneys allocated to public education. The legislation further requires that the funds shall be used for the education of pupils and students and cannot be used for the acquisition of real property, the construction of facilities or the financing of research.

Allocation of State Lottery net revenues is based upon the average daily attendance of

each school and community college district; however, the exact allocation formula may vary from year to year. At this time, the amount of revenues that may be generated by the State Lottery in any given year cannot be predicted.

Proposition 46

On June 3, 1986, California voters approved Proposition 46, which added an additional exemption to the 1% tax limitation imposed by Article XIIIA. Under this amendment to Article XIIIA, local governments and school and community college districts may increase the property tax rate above 1% for the period necessary to retire new, general obligation bonds, if two-thirds of those voting in a local election approve the issuance of such bonds and the money raised through the sale of the bonds is used exclusively to purchase or improve real property.

Proposition 39

On November 7, 2000, California voters approved Proposition 39, called the “Smaller Classes, Safer Schools and Financial Accountability Act” (the “Smaller Classes Act”) which amends Section 1 of Article XIIIA, Section 18 of Article XVI of the California Constitution and Section 47614 of the California Education Code and allows an alternative means of seeking voter approval for bonded indebtedness by 55% of the vote, rather than the two-thirds majority required under Section 18 of Article XVI of the Constitution. The 55% voter requirement applies

-37-

only if the bond measure submitted to the voters includes, among other items: (1) a restriction that the proceeds of the bonds may be used for “the construction, reconstruction, rehabilitation, or replacement of school facilities, including the furnishing and equipping of school facilities, or the acquisition or lease of real property for school facilities,” (2) a list of projects to be funded and a certification that the school district board has evaluated “safety, class size reduction, and information technology needs in developing that list” and (3) that annual, independent performance and financial audits will be conducted regarding the expenditure and use of the bond proceeds.

Section 1(b)(3) of Article XIIIA has been added to exempt the 1% ad valorem tax

limitation that Section 1(a) of Article XIIIA of the Constitution levies, to pay bonds approved by 55% of the voters, subject to the restrictions explained above.

The Legislature enacted AB 1908, Chapter 44, which became effective upon passage of

Proposition 39 and amends various sections of the Education Code. Under amendments to Section 15268 and 15270 of the Education Code, the following limits on ad valorem taxes apply in any single election: (1) for an elementary and high school district, indebtedness shall not exceed $30 per $100,000 of taxable property, (2) for a unified school district, indebtedness shall not exceed $60 per $100,000 of taxable property, and (3) for a community college district, indebtedness shall not exceed $25 per $100,000 of taxable property. These requirements are not part of Proposition 39 and can be changed with a majority vote of both houses of the Legislature and approval by the Governor. Finally, AB 1908 requires that a citizens’ oversight committee must be appointed who will review the use of the bond funds and inform the public about their proper usage.

Article XIIIC and XIIID of the California Constitution

On November 5, 1996, an initiative to amend the California Constitution known as the “Right to Vote on Taxes Act” (“Proposition 218”) was approved by a majority of California voters. Proposition 218 added Articles XIIIC and XIIID to the State Constitution and requires majority voter approval for the imposition, extension or increase of general taxes and 2/3 voter approval for the imposition, extension or increase of special taxes by a local government, which is defined in Proposition 218 to include counties. Proposition 218 also provides that any general tax imposed, extended or increased without voter approval by any local government on or after January 1, 1995, and prior to November 6, 1996 shall continue to be imposed only if approved by a majority vote in an election held within two years following November 6, 1996. All local taxes and benefit assessments which may be imposed by public agencies will be defined as “general taxes” (defined as those used for general governmental purposes) or “special taxes” (defined as taxes for a specific purpose even if the revenues flow through the local government’s general fund) both of which would require a popular vote. New general taxes require a majority vote and new special taxes require a two-thirds vote. Proposition 218 also extends the initiative power to reducing or repealing local taxes, assessments, fees and charges, regardless of the date such taxes, assessments or fees or charges were imposed, and lowers the number of signatures necessary for the process. In addition, Proposition 218 limits the application of assessments, fees and charges and requires them to be submitted to property owners for approval or rejection, after notice and public hearing.

The Districts have no power to impose taxes except property taxes associated with a

general obligation bond election, following approval by 55% or 2/3 of the District’s voters, depending upon the Article of the Constitution under which it is passed.

Proposition 218 also expressly extends the initiative power to give voters the power to

reduce or repeal local taxes, assessments, fees and charges, regardless of the date such taxes, assessments, fees or charges were imposed, and reduces the number of signatures required for

-38-

the initiative process. This extension of the initiative power to some extent constitutionalizes the March 6, 1995 State Supreme Court decision in Rossi v. Brown, which upheld an initiative that repealed a local tax and held that the State constitution does not preclude the repeal, including the prospective repeal, of a tax ordinance by an initiative, as contrasted with the State constitutional prohibition on referendum powers regarding statutes and ordinances which impose a tax. Generally, the initiative process enables California voters to enact legislation upon obtaining requisite voter approval at a general election. Proposition 218 extends the authority stated in Rossi v. Brown by expanding the initiative power to include reducing or repealing assessments, fees and charges, which had previously been considered administrative rather than legislative matters and therefore beyond the initiative power. This extension of the initiative power is not limited by the terms of Proposition 218 to fees imposed after November 6,1996 and absent other legal authority could result in retroactive reduction in any existing taxes, assessments or fees and charges. Such legal authority could include the limitations imposed on the impairment of contracts under the contract clause of the United States Constitution.

Proposition 218 has no effect upon the Districts’ ability to pursue approval of a general

obligation bond or a community facilities district bond in the future, although certain procedures and burdens of proof may be altered slightly. The Districts are unable to predict the nature of any future challenges to Proposition 218 or the extent to which, if any, Proposition 218 may be held to be unconstitutional.

Future Initiatives

Article XIIIA, Article XIIIB, Article XIIIC, Article XIIID and Propositions 26 and 98 were each adopted as measures that qualified for the ballot pursuant to the State’s initiative process. From time to time, other initiative measures could be adopted, further affecting the Districts’ revenues or their ability to expend revenues.

GENERAL SCHOOL DISTRICT INFORMATION

State Funding of Education

The State Constitution requires that from all State revenues there will first be set apart the moneys to be applied by the State for support of the public school system and public institutions of higher education. As discussed below, most school districts in the State receive a significant portion of their funding from State appropriations.

The principal component of local revenues is a school district’s property tax revenues,

i.e., each district’s share of the local 1% property tax, received pursuant to Sections 75 and following and Sections 95 and following of the California Revenue and Taxation Code. Education Code Section 42238(h) itemizes the local revenues that are counted towards the base revenue limit before calculating how much the State must provide in State aid. The more local property taxes a district receives, the less State aid it is entitled to; ultimately, a school district whose local property tax revenues exceed its base revenue limit is entitled to receive no State aid, and receives only its special categorical aid which is deemed to include the “basic aid” of $120 per student per year guaranteed by Article IX, Section 6 of the Constitution. Such districts are known as “basic aid districts.” Districts that receive some State aid are commonly referred to as “revenue limit districts.”

Annual State apportionments of basic and equalization aid to school districts for general

purposes are computed up to a revenue limit (as described below) per unit of average daily

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attendance (“ADA”). Generally, such apportionments will amount to the difference between the district’s revenue limit and the district’s local property tax allocation. Revenue limit calculations are adjusted annually in accordance with a number of factors designed primarily to provide cost of living increases and to equalize revenues among all of the same type of California school districts (i.e., unified, high school or elementary). State law also provides for State support of specific school-related programs, including summer school, adult education, deferred maintenance of facilities, pupil transportation, portable classrooms and other capital outlays and various categorical aids.

The State revenue limit is calculated three times a year for each school district. The first

calculation is performed for the February 20th First Principal Apportionment, the second calculation for the June 25th Second Principal Apportionment, and the final calculation for the end of the year Annual Principal Apportionment. Calculations are reviewed by the County Office of Education and submitted to the State Department of Education to review the calculations for accuracy, calculate the amount of State aid owed to such school district and notify the State Controller of the amount, who then distributes the State aid.

The calculation of the amount of State aid a school district is entitled to receive each year

is a five step process. First, the prior year State revenue limit per ADA is established, with recalculations as are necessary for adjustments for equalization or other factors. Second, the adjusted prior year State revenue limit per ADA is inflated according to formulas based on the implicit price deflator for government goods and services and the statewide average State revenue limit per ADA for the school districts. Third, the current year’s State revenue limit per ADA for each school district is multiplied by such school district’s ADA for either the current or prior year, whichever is greater. Fourth, revenue limit add-ons are calculated for each school district if such school district qualifies for the add-ons. Add-ons include the necessary small school district adjustments, meals for needy pupils and small school district transportation, and are added to the State revenue limit for each qualifying school district. Finally, local property tax revenues are deducted from the State revenue limit to arrive at the amount of state aid based on the State revenue limit each school district is entitled to for the current year.

State Cash Management Legislation

Since 2002, the State has engaged in the practice of deferring certain apportionments to school districts in order to manage the State’s cash flow. This practice has included deferring certain apportionments from one fiscal year to the next. These “cross-year” deferrals have been codified and are expected to be on-going. Legislation enacted with respect to fiscal year 2011-12 provides for additional inter-fiscal year deferrals.

On March 24, 2011, the Governor signed into law Senate Bill 82 (“SB 82”), which

extended into fiscal year 2011-12 provisions of existing law designed to effectively manage the State’s cash resources. SB 82 authorizes the deferral of State apportionments during fiscal year 2011-12, as follows: (i) $700 million from July 2011 to September 2011, (ii) $700 million from July 2011 to January 2012, (iii) $1.4 billion from August 2011 to January 2012, (iv) $2.4 billion from October 2011 to January 2012, and (v) $1.4 billion from March 2012 to April 2012. Collectively, these deferrals are referred to as the “Cash Management Deferrals.” SB 82 required the State Department of Education was required to certify to school districts no later than April 15, 2011 which of the 2011-12 Cash Management Deferrals will be implemented, and in what amounts. On April 15, 2011, the Department of Education released a projected scheduled of State apportionments showing that all of the 2011-12 Cash Management Deferrals would be implemented. SB 82 provides for an exemption to the Cash Management Deferrals for a school district that would be unable to meet its expenditure obligations if its State apportionments are delayed. In the event any of the Cash Management Deferrals are implemented, SB 82 requires that the State Controller, State Treasurer and State Treasurer-Tax Collector review, as necessary

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but no less than monthly, the actual State general fund cash receipts and disbursements in comparison to the Governor’s most recent revenue and expenditure projections. If the Controller, Treasurer and Treasurer-Tax Collector determine that sufficient cash is available to pay the State apportionments being deferred while maintaining a prudent cash reserve, such State apportionments are required to be paid as soon as feasible.

Future Initiatives

Article XIIIA, Article XIIIB, Article XIIIC and Article XIIID of the California Constitution

and Propositions 26, 98 and 111 were each adopted as measures that qualified for the ballot pursuant to the State’s initiative process. From time to time other initiative measures could be adopted further affecting district revenues or a district’s ability to expend revenues. The nature and impact of these measures cannot be anticipated by the Districts.

State Budget

The following information concerning the State’s budgets for the current and most recent preceding years has been compiled from publicly-available information provided by the State. Neither the District, the County, nor the Underwriter is responsible for the information relating to the State’s budgets provided in this section. Further information is available from the Public Finance Division of the State Treasurer’s Office.

The Budget Process. The State’s fiscal year begins on July 1 and ends on June 30. The

annual budget is proposed by the Governor by January 10 of each year for the next fiscal year (the “Governor’s Budget”). Under State law, the annual proposed Governor’s Budget cannot provide for projected expenditures in excess of projected revenues and balances available from prior fiscal years. Following the submission of the Governor’s Budget, the Legislature takes up the proposal.

Under the State Constitution, money may be drawn from the State Treasury only

through an appropriation made by law. The primary source of the annual expenditure authorizations is the Budget Act as approved by the Legislature and signed by the Governor. The Budget Act must be approved by a majority vote of each House of the Legislature. The Governor may B-14 reduce or eliminate specific line items in the Budget Act or any other appropriations bill without vetoing the entire bill. Such individual line-item vetoes are subject to override by a two-thirds majority vote of each House of the Legislature.

Appropriations also may be included in legislation other than the Budget Act. Bills

containing appropriations (including for K-14 education) must be approved by a majority vote in each House of the Legislature, unless such appropriations require tax increases, in which case they must be approved by a two-thirds vote of each House of the Legislature, and be signed by the Governor. Continuing appropriations, available without regard to fiscal year, may also be provided by statute or the State Constitution.

Funds necessary to meet an appropriation need not be in the State Treasury at the time

such appropriation is enacted; revenues may be appropriated in anticipation of their receipt.

Recent State Budgets

Certain information about the State budgeting process and the State Budget is available through several State of California sources. A convenient source of information is the State’s website, where recent official statements for State bonds are posted. The references to internet websites shown below are shown for reference and convenience only, the information

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contained within the websites may not be current and has not been reviewed by the District and is not incorporated herein by reference.

• The California State Treasurer Internet home page at www.treasurer.ca.gov, under the

heading “Bond Information”, posts various State of California Official Statements, many of which contain a summary of the current State Budget, past State Budgets, and the impact of those budgets on school districts in the State.

• The California State Treasurer’s Office Internet home page at www.treasurer.ca.gov,

under the heading “Financial Information”, posts the State’s audited financial statements. In addition, the Financial Information section includes the State’s Rule 15c2-12 filings for State bond issues. The Financial Information section also includes the Overview of the State Economy and Government, State Finances, State Indebtedness, Litigation from the State’s most current Official Statement, which discusses the State budget and its impact on school districts.

• The California Department of Finance’s Internet home page at www.dof.ca.gov, under

the heading “California Budget”, includes the text of proposed and adopted State Budgets.

• The State Legislative Analyst’s Office prepares analyses of the proposed and adopted

State budgets. The analyses are accessible on the Legislative Analyst’s Internet home page at www.lao.ca.gov under the heading “Subject Area – Budget (State)”.

State IOUs and Deferrals of Education Funding. In recent years, fiscal stress and difficulties

in achieving a balanced State budget have resulted in actions which include the State issuing IOUs (defined below) to its creditors, and the deferral of school funding.

On July 2, 2009, as a result of declines in State revenues commencing in fiscal years B-15

2008-09, the State Controller began to issue registered warrants (or “IOUs”) for certain lower priority State obligations in lieu of warrants (checks) which could be immediately cashed. The registered warrants, the issuance of which did not require the consent of recipients, bore interest. With enactment of an amended budget in late July, 2009, the State was able to call all its outstanding registered warrants for redemption on September 4, 2009. The issuance of state registered warrants in 2009 was only the second time the State has issued state registered warrants to such types of state creditors since the 1930s.

Furthermore, commencing in fiscal year 2008-09, to better manage its cash flow in light

of declining revenues, the State has enacted several statutes deferring amounts owed to public schools, until a later date in the fiscal year, or even into the following fiscal year, in order to more closely align the State’s revenues with its expenditures. This technique has been used several times through the enactment of budget bills in fiscal years 2008-2009 through 2011-12. Some of these statutory deferrals were made permanent, and others were implemented only for one fiscal year.

Fiscal stress and cash pressures currently facing the State may continue or become more

difficult, and continuing declines in State tax receipts or other results of the current economic recession may materially adversely affect the financial condition of the State. The Department of Finance has projected that multi-billion dollar budget gaps will occur annually for several years in the future, although the 2012-13 Budget described below includes measures which are intended to address these budgetary difficulties.

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2012-13 State Budget.

The Governor signed the fiscal year 2012-13 State budget (the “2012-13 State Budget”) on June 27, 2012. The 2012-13 State Budget closes a $15.7 billion budget gap and builds a reserve of nearly $1 billion with (i) $8.1 billion in expenditure reductions, (ii) $6 billion in increased revenues (which assumes the approval by the voters of temporary taxes at the November 2012 election, as further described below) and (iii) $2.5 billion from certain loan and transfer measures. This $15.7 billion budget gap is less than the $26.6 billion budget gap encountered for fiscal year 2011-12. The 2012-13 State Budget purports to position the State to have a balanced budget in an ongoing manner for the first time in over a decade, with future spending expected to stay within available revenues.

The 2012-13 State Budget assumes the passage of The Schools and Local Public Safety

Protection Act (the “Temporary Tax Measure”) at the November 2012 election. Such measure, if approved by the voters, would increase the personal income tax on the State’s wealthiest taxpayers by up to three percent for a period of seven years, and increase the sales tax by one-quarter percent for a period of four years. The 2012-13 State Budget projects that the Temporary Tax Measure will generate an estimated $8.5 billion in revenues in fiscal year 2012-13. Such additional revenues would increase the State’s Proposition 98 obligation by $2.9 billion and provide a net benefit of $5.6 billion to the State’s general fund. With the assumed voter approval of the Temporary Tax Measure, the 2012-13 State Budget provides $53.6 billion in Proposition 98 funding for K-12 schools and community colleges, a $6.7 billion (or 14%) increase from fiscal year 2011-12. Of such increased amount, $6.1 billion is designated for K-12 schools. The 2012-13 State Budget maintains level Proposition 98 programmatic funding for all K-12 schools, pays off $2.2 billion in the amount of payments to K-12 schools and community colleges that are deferred each year, and funds the Quality Education Investment Act program (as described below) within the Proposition 98 guarantee. According to the 2012-13 State Budget, the Temporary Tax Measure is expected to increase Proposition 98 funding for K-12 schools and community colleges by an aggregate amount of $17.2 billion (or 37%) over the next B-16 four fiscal years when compared to fiscal year 2011-12. This projected increase reverses years of cuts in funding for K-12 schools and community colleges.

Proposed K-12 adjustments provided in the 2012-13 State Budget include the following:

• Proposition 98 Adjustments. A decrease approximately $630 million due to (i) eliminating the hold-harmless adjustment provided to K-12 schools from the elimination of the sales tax on gasoline in fiscal year 2010-11, and (ii) using a consistent current value methodology to rebench the Proposition 98 minimum guarantee for the exclusion of child care programs, the inclusion of special education mental health services, and new property tax shifts.

• Redevelopment Agency Asset Liquidation. An increase of $1.21.3 billion in offsetting

local property taxes for fiscal year 2012-13 to reflect the distribution of cash assets previously held by redevelopment agencies, which increase in local revenues also reduces Proposition 98 general fund by an identical amount.

• Quality Education Investment Act. A decrease of $450 million in funding for fiscal year

2012-13 with respect to the Quality Education Investment Act. The over-appropriation in fiscal year 2011-12 will be used to prepay the $450 million required to be provided on top of the Proposition 98 minimum guarantee in fiscal year 2012-13. The program will be funded within the Proposition 98 minimum guarantee to achieve one-time savings of $450 million for fiscal year 2012-13.

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• K-12 Deferrals. An increase of $2.1 billion in Proposition 98 funding to reduce K-12 inter-year budgetary deferrals from $9.5 billion to $7.4 billion.

• Mandates Block Grant. An increase of $86.2 million from fiscal year 2011-12 to provide a

total of $166.6 million for K-12 mandates through a new voluntary block grant, in which participating school districts and county offices of education would receive $28 per student and participating charter schools would receive $14 per student. School districts and county offices of education that choose not to participate in the block grant program would retain their right to submit claims for reimbursement, subject to audit by the State Controller.

• Charter Schools. An increase of $53.7 million in Proposition 98 funding for charter

school categorical programs to fund growth in charter school enrollment. Additionally, the 2012- 13 State Budget provides for (i) the expansion of the ability of school districts to convey surplus property to charter schools, (ii) the authorization of county treasurers to provide charter schools with short-term cash loans, and (iii) the authorization of charter schools to participate in the temporary revenue anticipation note financing mechanisms that are currently available to school districts and county offices of education.

• Child Care. Total savings of $294.3 million from (i) the inclusion of part-day centerbased

services for 3- and 4- year-olds within the State Preschool Program funded through Proposition 98, (ii) the reduction of child care provider contracts, and (iii) not providing the statutory cost-of-living-adjustment for non-CalWORKs programs.

As stated above, the increased Proposition 98 funding for K-12 schools, among other

things, is contingent upon the approval of the Temporary Tax Measure. If the Temporary Tax Measure is not approved by the voters at the November 2012 election, the 2012-13 State Budget includes a backup plan of $6 billion in trigger cuts which would go into effect on January 1, 2013. With respect to K-12 schools, such cuts would (i) reduce funding for K-12 schools and B-17 community colleges by $5.4 billion – a funding decrease equivalent to three weeks of instruction, and (ii) eliminate the ability of the State to begin repaying funding deferrals.

The complete 2012-13 State Budget is available from the California Department of

Finance website at www.dof.ca.gov. The District can take no responsibility for the continued accuracy of this internet address or for the accuracy, completeness or timeliness of information posted there, and such information is not incorporated herein by such reference.

Uncertainty Regarding Future State Budgets

The District cannot predict what actions will be taken in future years by the State Legislature and the Governor to address the State’s current or future budget deficits. Future State budgets will be affected by national and state economic conditions and other factors over which the District has no control. The District cannot predict what impact any future budget proposals will have on the financial condition of the District. To the extent that the State budget process results in reduced revenues to the District, the District will be required to make adjustments to its budgets.

The State has not entered into any contractual commitment with the District, the

County, or the Owners of the Bonds to provide State budget information to the District or the owners of the Bonds. Although they believe the State sources of information listed above are reliable, neither the District nor the Underwriter assumes any responsibility for the accuracy of the State Budget information set forth or referred to in this Official Statement or incorporated herein. However, the Bonds are secured by ad valorem taxes levied and collected on taxable

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property in the District, without limit as to rate or amount, and are not secured by a pledge of revenues of the District or its general fund.

Litigation Challenging State Funding of Education

On May 20, 2010, more than 60 individual students and their respective families, nine California school districts, the California Congress of Parents Teachers & Students, the Association of California School Administrators, and the California School Boards Association filed a complaint for declaratory and injunctive relief, entitled Maya Robles-Wong, et al. v. State of California, et al., (the “Robles Complaint”) in the Alameda County Superior Court. The Robles Complaint alleges, among other things, that the State’s current system of funding public education is not designed to support core education programs and that the State has failed to meet its constitutional duties to maintain and support a system of common schools. The Robles Complaint further alleges that the State’s system for funding education is not rationally or demonstrably aligned with the goals and objectives of the State’s prescribed educational program, and the costs of ensuring that children of all needs have the opportunity to become proficient in accordance with State academic standards. The Robles Complaint requests that the court enter a permanent injunction to, among other things, require the State to align its school finance system with its prescribed educational program, as well as to direct the defendants to cease operating the existing public school finance system or any other system of public finance that does not meet the requirements of the State Constitution.

On January 14, 2011, the Superior Court dismissed major portions of the Robles

Complaint, allowing the plaintiffs to proceed only on the question of whether the State’s public education funding scheme provides equal opportunities to students throughout the State but rejecting that part that claimed that the State constitution mandates an overall qualitative standard for public education. On July 26, 2011, the Superior Court rejected the plaintiffs’ amended complaint as not stating an equal protection claim but allowed them to amend their complaint, if filed by August 25. On August 22, 2011, the Superior Court granted the plaintiffs’ request for an extension of time to file their amended complaint until September 26, 2011. No amended complaint was filed.

On September 28, 2011, the California School Boards Association, the Association of

California School Administrators, the Los Angeles Unified School District, the San Francisco Unified School District and the Turlock Unified School District filed a petition for a writ of mandate in the Superior Court of the State of California in and for the City and County of San Francisco (the “CSBA Petition”). The petitioners allege that the 2011-12 Budget improperly diverted sales tax revenues away from the State general fund, resulting in a reduction to the minimum funding guarantee of approximately $2.1 billion. The CSBA Petition seeks an order from the Court compelling the State Treasurer, Superintendent of Public Instruction and the State Controller to recalculate the minimum funding guarantee in accordance with the provisions of the California Constitution.

The District is not a party to the Robles Complaint or the CSBA Petition. The District

cannot predict whether any of the plaintiffs listed in the Robles Complaint or the CSBA Petition will be successful, what the potential remedies would be or the State’s response to any such remedies. The District makes no representation with regards to how any final court decision with respect to the Robles Complaint or the CSBA Petition would affect the financial status of the District or the State.

Significant Accounting Policies and Audited Financial Statements

The California State Department of Education imposes by law uniform financial reporting and budgeting requirements for K-12 school districts. Financial transactions are

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accounted for in accordance with the California School Accounting Manual. Independently audited financial reports are prepared annually in conformity with generally accepted accounting principles for educational institutions.

Ad Valorem Property Taxes

Taxes are levied for each fiscal year on taxable real and personal property which is situated in the County as of the preceding January 1, effective with the lien date of January 1, 1997. However, upon a change in ownership of property or completion of new construction, State law permits an accelerated recognition and taxation of increases in real property assessed valuation (known as a “floating lien date”). For assessment and collection purposes, property is classified either as “secured” or “unsecured” and is listed accordingly on separate parts of the assessment roll. The “secured roll” is that part of the assessment roll containing State assessed property secured by a lien which is sufficient, in the opinion of the assessor, to secure payment of the taxes. Other property is assessed on the “unsecured roll.”

The County levies a 1% property tax on behalf of all taxing agencies in the County. The

taxes collected are allocated on the basis of a formula established by State law enacted in 1979. Under this formula, the County and all other taxing entities receive a base year allocation plus an allocation on the basis of “situs” growth in assessed value (new construction, change of ownership, inflation) prorated among the jurisdictions which serve the tax rate areas within which the growth occurs. Tax rate areas are specifically defined geographic areas which were developed to permit the levying of taxes for less than county-wide or less than city-wide special and school districts. In addition, the County levies and collects additional approved property taxes and assessments on behalf of any taxing agency within the County.

Property taxes on the secured roll are due in two installments, on November 1 and

February 1. If unpaid, such taxes become delinquent after December 10 and April 10, respectively, and a 10% penalty attaches to any delinquent payment. In addition, property on the secured roll secured by the assessee’s fee ownership of land with respect to which taxes are delinquent is declared tax-defaulted on or about June 30. Those properties on the secured roll that become tax-defaulted on June 30 of the fiscal year that are not secured by the assessee’s fee ownership of land are transferred to the unsecured roll and are then subject to the Treasurer’s enforcement procedures (i.e., seizures of money and property, liens and judgments). Such property may thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus costs and redemption penalty of one and one-half percent per month to the time of redemption. If taxes are unpaid for a period of five years or more, the tax-defaulted property is subject to sale by the Treasurer.

Property taxes on the unsecured roll are currently due as of the January 1 lien date prior

to the commencement of a fiscal year and become delinquent, if unpaid, on August 31. A 10% penalty attaches to delinquent taxes on property on the unsecured roll and an additional penalty of one and one-half percent per month begins to accrue on November 1. The taxing authority has four ways of collecting unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the County Clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for recordation in the County Recorder’s office in order to obtain a lien on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements, bank accounts or possessory interests belonging or assessed to the taxpayer.

Proposition 26

On November 2, 2010, voters in the State approved Proposition 26. Proposition 26 amends Article XIIIC of the State Constitution to expand the definition of “tax” to include “any

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levy, charge, or exaction of any kind imposed by a local government” except the following: (1) a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege; (2) a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product; (3) a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof; (4) a charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property; (5) A fine, penalty, or other monetary charge imposed by the judicial branch of government or a local government, as a result of a violation of law; (6) a charge imposed as a condition of property development; and (7) assessments and property-related fees imposed in accordance with the provisions of Article XIIID. Proposition 26 provides that the local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity.

Proposition 98

General. In 1988, California voters approved Proposition 98, an initiative that amended Article XVI of the State Constitution and provided specific procedures to determine a minimum guarantee for annual grade kindergarten to 14 (“K-14”) funding. The constitutional provision links the K-14 funding formulas to growth factors that are also used to compute the State appropriations limit. Proposition 111 (Senate Constitutional Amendment 1), adopted in June 1990, among other things, revised certain funding provisions of Proposition 98 relating to the treatment of revenues in excess of the State spending limit and added a third funding “test” to calculate the annual funding guarantee. This third calculation is operative in years in which general fund tax revenue growth is weak. The amendment also specified that under Test 2 (see below), the annual cost of living adjustment (“COLA”) for the minimum guarantee would be the change in California’s per-capita personal income, which is the same COLA used to make annual adjustments to the State appropriations limit (Article XIII B).

Calculating Minimum Funding Guarantee. There are currently three tests which determine

the minimum level of K-14 funding. Test 1 guarantees that K-14 education will receive at least the same funding share of the State general fund budget it received in 1986-87. Initially, that share was just over 40 percent. Because of the major shifts of property tax from local government to community colleges and K-12 which began in 1992-93 and increased in 1993-94, the percentage dropped to 33.0%.

Under implementing legislation (AB 198 and SB 98 of 1989), each segment of public

education (K-12 districts, community college districts, and direct elementary and secondary level instructional services provided by the State of California) has separately calculated amounts under the Proposition 98 tests. The base year for the separate calculations is 1989-90. Each year, each segment is entitled to the greater of the amounts separately computed for each under Test 1 or 2. Should the calculated amount Proposition 98 guarantee (K-14 aggregated) be less than the sum of the separate calculations, then the Proposition 98 guarantee amount shall be prorated to the three segments in proportion to the amount calculated for each. This statutory split has been suspended in every year beginning with 1992-93. In those years, community colleges received less than was required from the statutory split.

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Test 2 provides that K-14 education will receive as a minimum, its prior-year total funding (including State general fund and local revenues) adjusted for enrollment growth (“ADA”) and per-capita personal income COLA.

A third formula, established pursuant to Proposition 111 as “Test 3,” provides an

alternative calculation of the funding base in years in which State per-capita general fund revenues grow more slowly than per-capita personal income. When this condition exists, K-14 minimum funding is determined based on the prior-year funding level, adjusted for changes in enrollment and COLA where the COLA is measured by the annual increase in per-capita general fund revenues, instead of the higher per-capita personal income factor. The total allocation, however, is increased by an amount equal to one-half of one percent of the prior-year funding level as a funding supplement.

In order to make up for the lower funding level under Test 3, in subsequent years K-14

education receives a maintenance allowance equal to the difference between what should have been provided if the revenue conditions had not been weak and what was actually received under the Test 3 formula. This maintenance allowance is paid in subsequent years when the growth in per-capita State tax revenue outpaces the growth in per-capita personal income.

The enabling legislation to Proposition 111, Chapter 60, Statutes of 1990 (SB 88,

Garamendi), further provides that K-14 education shall receive a supplemental appropriation in a Test 3 year if the annual growth rate in non-Proposition 98 per-capita appropriations exceeds the annual growth rate in per-pupil total spending.

Supplemental Information Concerning Litigation Against the State of California

In June 1998, a complaint was filed in Los Angeles County Superior Court challenging the authority of the State Controller to make payments in the absence of a final, approved State Budget. The Superior Court judge issued a preliminary injunction preventing the State Controller from making payments including those made pursuant to continuing appropriations prior to the enactment of the State’s annual budget. As permitted by the State Constitution, the Legislature immediately enacted and the Governor signed an emergency appropriations bill that allowed continued payment of various State obligations, including debt service, and the injunction was stayed by the California Court of Appeal, pending its decision.

On May 29, 2003, the California Court of Appeal for the Second District decided the case

of Steven White, et al. v. Gray Davis (as Governor of the State of California), et al. The Court of Appeal concluded that, absent an emergency appropriation, the State Controller may authorize the payment of state funds during a budget impasse only when payment is either (i) authorized by a “continuing appropriation” enacted by the Legislature, (ii) authorized by a self-executing provision of the California Constitution, or (iii) mandated by federal law. The Court of Appeal specifically concluded that the provisions of Article XVI, Section 8 of the California Constitution – the provision establishing minimum funding of K-14 education enacted as part of Proposition 98 – did not constitute a self-executing authorization to disburse funds, stating that such provisions merely provide formulas for determining the minimum funding to be appropriated every budget year but do not appropriate funds. The State Controller has concluded that the provisions of the Education Code establishing K-12 and county office revenue limit funding do constitute continuing appropriations enacted by the Legislature and, therefore, the State Controller has indicated that State payments of such amounts would continue during a budget impasse. However, no similar continuing appropriation has been cited with respect to K-12 categorical programs and revenue limit funding for community college districts, and the State Controller has concluded that such payments are not authorized pursuant to a continuing appropriation enacted by the Legislature and, therefore, cannot be paid during a budget impasse. The California Supreme Court granted the State Controller’s Petition for Review on a

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procedural issue unrelated to continuous appropriations and on the substantive question as to whether the State Controller is authorized to pay State employees their full and regular salaries during a budget impasse. No other aspect of the Court of Appeal’s decision was addressed by the State Supreme Court.

On May 1, 2003, with respect to the substantive question, the California Supreme Court

concluded that the State Controller is required, notwithstanding a budget impasse and the limitations imposed by State law, to timely pay those state employees who are subject to the minimum wage and overtime compensation provisions of the federal Fair Labor Standards Act. The Supreme Court also remanded the preliminary injunction issue to the Court of Appeal with instructions to set aside the preliminary injunction in its entirety.

Propositions 1A and 22

Proposition 1A (SCA 4) provides that the State may not reduce any local sales tax rate, limit existing local government authority to levy a sales tax rate or change the allocation of local sales tax revenues, subject to certain exceptions. Proposition 1A generally prohibits the State from shifting to schools or community colleges any share of property tax revenues allocated to local governments for any fiscal year, as set forth under the laws in effect as of November 3, 2004. Any change in the allocation of property tax revenues among local governments within a county must be approved by two-thirds of both houses of the State Legislature. Proposition 1A provides, however, that beginning in fiscal year 2008-09, the State may shift to schools and community colleges up to 8% of local government property tax revenues, which amount must be repaid, with interest, within three years, if the Governor proclaims that the shift is needed due to a severe state financial hardship, the shift is approved by two-thirds of both houses of the State Legislature and certain other conditions are met. The State may also approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county. Proposition 1A also provides that if the State reduces the Vehicle License Fee rate from 0.65% of vehicle value, the State must provide local governments with equal replacement revenues. Further, Proposition 1A requires the State, beginning June 1, 2009, to suspend State mandates affecting cities, counties and special districts, schools or community colleges, excepting mandates relating to employee rights, in any year that the State does not fully reimburse local governments for their costs of compliance with such mandates.

Under Proposition 1A, the State no longer has the authority to permanently shift city,

county, and special district property tax revenues to schools, or take certain other actions that affect local governments. In addition, Proposition 1A restricts the State’s ability to borrow state gasoline sales tax revenues. These provisions in the Constitution, however, do not eliminate the State’s authority to temporarily borrow or redirect some city, county, and special district funds or the State’s authority to redirect local redevelopment agency revenues. However, Proposition 22, The Local Taxpayer, Public Safety, and Transportation Protection Act, approved by the voters of the State on November 2, 2010, reduces or eliminates the State’s authority: (1) to use State fuel tax revenues to pay debt service on state transportation bonds; (2) to borrow or change the distribution of state fuel tax revenues; (3) to direct redevelopment agency property taxes to any other local government; (4) to temporarily shift property taxes from cities, counties, and special districts to schools; (5) and to use vehicle license fee revenues to reimburse local governments for state mandated costs. As a result, Proposition 22 impacts resources in the State’s General Fund and transportation funds, the State’s main funding source for schools and community colleges, as well as universities, prisons and health and social services programs. According to the LAO analysis of Proposition 22 submitted by the LAO on July 15, 2010, the expected reduction in resources available for the State to spend on these other programs as a consequence of the passage of Proposition 22 would be approximately $1 billion in fiscal year 2010–11, with an estimated immediate fiscal effect equal to approximately 1 percent of the State’s total General Fund spending. The longer-term effect of Proposition 22, according to the

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LAO analysis, will be an increase in the State’s General Fund costs by approximately $1 billion annually for several decades.

On December 30, 2011, the California Supreme Court issued its decision in the case of

California Redevelopment Association v. Matosantos, finding ABx1 26, a trailer bill to the 2011-12 State budget, to be constitutional. As a result, all redevelopment agencies in California will be dissolved as of February 1, 2012, and all net tax increment revenues, after payment of redevelopment bonds debt service and administrative costs, will be distributed to cities, counties, special districts and school districts. The Court also found that ABx1 27, a companion bill to ABx1 26, violated the California Constitution, as amended by Proposition 22. ABx1 27 would have permitted redevelopment agencies to continue operations provided their establishing cities or counties agreed to make specified payments to school districts and county offices of education, totaling $1.7 billion statewide. The District can make no representations regarding what affect the implementation of ABx1 26 will have on the District’s future receipt of tax increment revenues.

State Funding of School Construction

The State makes funding for school facility construction and modernization available to K-12 districts throughout the State through the Office of Public School Construction (“OPSC”) and the State Allocation Board (“SAB”), from proceeds of State general obligation bonds authorized and issued for this purpose. Such bonds were authorized in the amount of $13.05 billion, $11.40 billion of which were for K-12 school facilities and $1.65 billion of which were for higher education facilities, on November 5, 2002 under Proposition 47, passed by 58.9% of the State-wide vote. An additional bond measure for education capital projects was approved on March 2, 2006 under Proposition 55, passed by 50.6% of the State-wide vote, in an authorization amount of $12.3 billion, $10.0 billion of which is for K-12 school facilities and $2.3 billion of which is for higher education facilities. A State general obligation bond measure that includes $7.329 billion for construction, modernization and related purposes for K-12 school districts was approved by a majority of voters in the November 7, 2006 State-wide election.

The SAB allocates bond funds for 50% of approved new construction costs, 60% of

approved modernization costs (80% for modernization project applications made prior to February 1, 2002), or up to 100% of approved costs of any type if the school district is approved for “hardship” funding. The school district is responsible for the portion of costs not funded by the State, commonly funding their portion with their own general obligation bonds, certificates of participation or accumulated builder’s fee revenue. School districts routinely apply for such funding whenever they have projects they believe meet OPSC and SAB criteria for funding.

State Retirement Programs

School districts participate in the State of California Teachers Retirement System (“CalSTRS”). CalSTRS covers all full-time and most part-time employees with teaching certificates. In order to receive CalSTRS benefits, an employee must be at least 55 years old and have provided five years of service to California public schools. School districts also participate in the State of California Public Employees Retirement System (“PERS”). PERS covers all classified personnel, generally those employees without teaching must be at least 50 years old and have had five years of covered PERS service as a public employee.

Contribution rates to PERS varies with changes in actuarial assumptions and other

factors, such as changes in benefits and investment performance, and are set by a State retirement board for PERS. The contribution rates are set by statute for CalSTRS at a constant 8.25% of salary. CalSTRS has a substantial Statewide unfunded liability. Under current law, the liability is the responsibility of the State and not of individual school districts. See “DISTRICT

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INFORMATION” herein for information regarding the District’s contributions to these retirement systems.

County Office of Education

In each county there is a county superintendent of schools (the “County Superintendent”) and a county Board of Education. The Office of the County Superintendent, frequently known as the “County Office of Education” (the “County Office”) in each county provides the staff and organization that carries out the activities and policies of the County Superintendent and county Board of Education for that county.

County Office provides instructional and support services to school districts within their

counties, and various State mandated services county-wide, particularly in special education and juvenile court education services. County Office business services departments act as a control point for a variety of information, including pupil data collection, attendance accounting, teacher credential registration, payroll accounting, retirement and tax information and school district budgets, and also report such information to the State Department of Education. All school district budgets must be approved by their County Office and each district must provide its County Office with scheduled interim reports throughout the fiscal year. The County Office also act as enforcement entities which intervene in district fiscal matters should a district fail to meet State budget and reporting criteria.

The District is under the jurisdiction of, and is served by, the County Office.

School District Budget Process

School districts are required by provisions of the State Education Code to maintain a balanced budget each year, in which the sum of expenditures and the ending fund balance cannot exceed the sum of revenues and the carry-over fund balance from the previous year. School districts’ annual general fund expenditures are characterized in large part by multi-year expenditure commitments such as union contracts. Year-to-year fluctuations in State and local funding of school district general funds could result in revenue decreases which, if large enough, may not easily be offset by an equal reduction in expenditures until at least the following fiscal year. School districts are required by State law to maintain general fund reserves which can be drawn upon in the event of a resulting excess of expenditures over revenues for a given fiscal year. The State Department of Education imposes a uniform budgeting and accounting format for school districts.

School districts must adopt a budget no later than June 30 of each year. The budget must

be submitted to the County Superintendent within five days of adoption or by July 1, whichever occurs first. A district may be on either a dual or single budget cycle. The dual budget option requires a revised and readopted budget by September 1 that is subject to State mandated standards and criteria. The revised budget must reflect changes in projected income and expenses subsequent to July 1. The single budget is only readopted if it is disapproved by the County Superintendent, or as needed. Under either procedure, the school board must revise its adopted budget within 45 days after the Governor signs the State budget act to reflect any changes in budgeted revenues or expenditures made necessary by the adoption of the State’s budget.

For both dual and single budgets submitted on July 1, the County Superintendent will

examine the adopted budget for compliance with the standards and criteria adopted by the State Board of Education and identify technical corrections necessary to bring the budget into compliance, and will determine if the budget allows the district to meet its current obligations and is consistent with a financial plan that will enable the district to meet its multi-year financial

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commitments. On or before August 15, the County Superintendent will approve or disapprove the adopted budget for each school district. Pursuant to State law, the county superintendent has available various remedies by which to impose and enforce a budget that complies with State criteria, depending on the circumstances, if a budget is disapproved.

Subsequent to approval, the County Superintendent throughout the fiscal year is

authorized to monitor each school district under his or her jurisdiction pursuant to its adopted budget to determine on an ongoing basis if the district can meet its current or subsequent year financial obligations. If a County Superintendent determines that a district cannot meet its current or subsequent year obligations, the County Superintendent will notify the district’s governing board of the determination and the County Superintendent may do either or both of the following: (a) assign a fiscal advisor to enable the district to meet those obligations or (b) if a study and recommendations are made and a district fails to take appropriate action to meet its financial obligations, the County Superintendent will so notify the State Superintendent of Public Instruction, and then may do any or all of the following for the remainder of the fiscal year: (i) request additional information regarding the district’s budget and operations; (ii) develop and impose, after also consulting with the district’s board, revisions to the budget that will enable the district to meet its financial obligations; and (iii) stay or rescind any action inconsistent with such revisions. However, the County Superintendent may not abrogate any provision of any collective bargaining agreement that was entered into prior to the date upon which the County Superintendent assumed authority.

At minimum, school districts are required by statute to file with their County

Superintendent and the State Department of Education a First Interim Financial Report by December 15th covering financial operations from July 1 through October 31st, and a Second Interim Financial Report by March 15th covering financial operations from November 1 through January 31st. Section 42131 of the Education Code requires that each interim report be certified by the school board as either (a) “positive,” certifying that the district, “based upon current projections, will meet its financial obligations for the current fiscal year and subsequent two fiscal years,” (b) “qualified,” certifying that the district, “based upon current projections, may not meet its financial obligations for the current fiscal year or two subsequent fiscal years,” or (c) “negative,” certifying that the district, “based upon current projections, will be unable to meet its financial obligations for the remainder of the fiscal year or the subsequent fiscal year.” A certification by a school board may be revised by the County Superintendent. If either the First or Second Interim Report is not “positive,” the County Superintendent may require the district to provide a Third Interim Financial Report by June 1st covering financial operations from February 1st through April 30th. If not required, a Third Interim Financial Report generally is not prepared (though may be at the election of the district). Each interim report shows fiscal year to date financial operations and the current budget, with any budget amendments made in light of operations and conditions to that point. After the close of the fiscal year, an unaudited financial report for the fiscal year is prepared and filed without certification with the County Superintendent and the State Department of Education.

Temporary Inter-fund Borrowing

The Education Code generally authorizes a school district to temporarily transfer cash from a specific purpose fund to any other district fund by district board action, including transfer of cash from proceeds of general obligation bonds; provided that, (a) the transferred cash is repaid to the original fund within the same fiscal year or (b), if transferred within the final 120 days of a fiscal year, then repaid to the original fund within the following fiscal year. However, depending on the circumstances of a particular such transfer, other State law, grant or contractual restrictions, or in the case of proceeds of tax-exempt obligations, federal tax law, may apply and may further restrict the use of such cash.

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Accounting Practices

The accounting policies of California school districts conform to generally accepted accounting principles, as modified in accordance with policies and procedures of the California School Accounting Manual. This manual, pursuant to Section 41010 of the Education Code, is to be followed by all California school districts. Revenues are recognized in the period in which they become both measurable and available to finance expenditures of the current fiscal period. Expenditures are recognized in the period in which the liability is incurred. See also “Notes to Financial Statements - Note 1” in Appendix A herein for further discussion of applicable accounting policies.

County Investment Pool

In accordance with Education Code Section 41001, each California public school district maintains substantially all of its operating funds in the county treasury of the county in which it is located, and each county treasurer or finance director serves as ex officio treasurer for those school districts located within the county. Each county treasurer or finance director has the authority to invest school district funds held in the county treasury. Generally, the county treasurer or finance director pools county funds with school district funds and funds from certain other public agencies and invests the cash. These pooled funds are carried at cost. Interest earnings are accounted for on either a cash or accrual basis and apportioned to pool participants on a regular basis.

Each county treasurer is required to invest funds, including those pooled funds

described above, in accordance with Government Code Sections 53601 et seq. and 53635 et seq. In addition, each county treasurer is required to establish an investment policy which may impose further limitations beyond those required by the Government Code. See “PLACER COUNTY INVESTMENT POOL.”

TAX MATTERS Federal tax law contains a number of requirements and restrictions which apply to the

Notes, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of bond proceeds and the facilities financed therewith, and certain other matters. The Districts have covenanted to comply with all requirements that must be satisfied in order for the interest on the Notes to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the Notes to become includible in gross income for federal income tax purposes retroactively to the date of issuance of the Notes.

Subject to the Districts’ compliance with the above referenced covenants, under present

law, in the opinion of Quint & Thimmig LLP, San Francisco, California, Bond Counsel, interest on the Notes is excludable from the gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but interest on the Notes is taken into account, however, in computing an adjustment used in determining the federal alternative minimum tax for certain corporations.

Subject to Dry Creek’s, Loomis’ and Western Pacer’s compliance with certain covenants,

in the opinion of Bond Counsel, the Notes issued by Dry Creek, Loomis and Western Placer are “qualified tax exempt obligations” under the small issuer exception provided under section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), which affords banks

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and certain other financial institutions more favorable treatment of their deduction for interest expense than would otherwise be allowed under section 265(b)(2) of the Code.

In rendering its opinion, Bond Counsel will rely upon certifications of the Districts with

respect to certain material facts within the Districts’ knowledge. Bond Counsel’s opinion represents its legal judgment based upon its review of the law and the facts that it deems relevant to render such opinion and is not a guarantee of a result.

The Code includes provisions for an alternative minimum tax (“AMT”) for corporations

in addition to the corporate regular tax in certain cases. The AMT, if any, depends upon the corporation’s alternative minimum taxable income (“AMTI”), which is the corporation’s taxable income with certain adjustments. One of the adjustment items used in computing the AMTI of a corporation (with certain exceptions) is an amount equal to 75% of the excess of such corporation’s “adjusted current earnings” over an amount equal to its AMTI (before such adjustment item and the alternative tax net operating loss deduction). “Adjusted current earnings” would include certain tax exempt interest, including interest on the Notes.

Ownership of the Notes may result in collateral federal income tax consequences to

certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax exempt obligations. Prospective purchasers of the Notes should consult their tax advisors as to applicability of any such collateral consequences.

The issue price (the “Issue Price”) for the Notes is the price at which a substantial

amount of the Notes is first sold to the public. The Issue Price of the Notes may be different from the price set forth, or the price corresponding to the yield set forth, on the cover page hereof.

Owners of Notes who dispose of Notes prior to the stated maturity (whether by sale,

redemption or otherwise), purchase Notes in the initial public offering, but at a price different from the Issue Price or purchase Notes subsequent to the initial public offering should consult their own tax advisors.

If a Note is purchased at any time for a price that is less than the Note’s stated

redemption price at maturity, the purchaser will be treated as having purchased a Note with market discount subject to the market discount rules of the Code (unless a statutory de minimis rule applies). Accrued market discount is treated as taxable ordinary income and is recognized when a Note is disposed of (to the extent such accrued discount does not exceed gain realized) or, at the purchaser’s election, as it accrues. The applicability of the market discount rules may adversely affect the liquidity or secondary market price of such Note. Purchasers should consult their own tax advisors regarding the potential implications of market discount with respect to the Notes.

An investor may purchase a Note at a price in excess of its stated principal amount. Such

excess is characterized for federal income tax purposes as “bond premium” and must be amortized by an investor on a constant yield basis over the remaining term of the Note in a manner that takes into account potential call dates and call prices. An investor cannot deduct amortized bond premium relating to a tax exempt bond. The amortized bond premium is treated as a reduction in the tax exempt interest received. As bond premium is amortized, it reduces the investor’s basis in the Note. Investors who purchase a Note at a premium should consult their own tax advisors regarding the amortization of bond premium and its effect on the

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Note’s basis for purposes of computing gain or loss in connection with the sale, exchange, redemption or early retirement of the Note.

There are or may be pending in the Congress of the United States legislative proposals,

including some that carry retroactive effective dates, that, if enacted, could alter or amend the federal tax matters referred to above or affect the market value of the Notes. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to bonds issued prior to enactment. Prospective purchasers of the Notes should consult their own tax advisors regarding any pending or proposed federal tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal tax legislation.

The Internal Revenue Service (the “Service”) has an ongoing program of auditing tax

exempt obligations to determine whether, in the view of the Service, interest on such tax exempt obligations is includible in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Notes. If an audit is commenced, under current procedures the Service may treat the Districts as a taxpayer and the Noteholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Notes until the audit is concluded, regardless of the ultimate outcome.

Payments of interest on, and proceeds of the sale, redemption or maturity of, tax exempt

obligations, including the Notes, are in certain cases required to be reported to the Service. Additionally, backup withholding may apply to any such payments to any Note owner who fails to provide an accurate Form W 9 Request for Taxpayer Identification Number and Certification, or a substantially identical form, or to any Note owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes.

In the further opinion of Bond Counsel, interest on the Notes is exempt from California

Person income taxes. Ownership of the Notes may result in other state and local tax consequences to certain

taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Bonds. Prospective purchasers of the Bonds should consult their tax advisors regarding the applicability of any such state and local taxes.

The complete text of the final opinion that Bond Counsel expects to deliver upon the

issuance of the Notes is set forth in APPENDIX C—PROPOSED FORM OF OPINIONS OF BOND COUNSEL.

LEGALITY FOR INVESTMENT IN CALIFORNIA

Under the provisions of the State of California Financial Code, the Notes are legal investments for commercial banks in the State to the extent that the Notes, in the informed opinion of the bank, are prudent for the investment of funds of its depositors. Under provisions of the State Government Code the Notes are eligible to secure deposits of public moneys in the State.

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NO LITIGATION

No litigation is pending or threatened concerning the validity of the Notes, and a Certificate of the District from each District to that effect will be furnished to the Underwriter at the time of the original delivery of the Notes. The Districts are not aware of any litigation pending or threatened questioning the political existence of the Districts or contesting each Districts’ ability to collect pledged revenues or contesting each Districts’ ability to issue and retire the Notes.

There may be one or more lawsuits and claims pending against the Districts. The

aggregate amount of the liabilities of the Districts which may result from existing suits and claims will not materially affect the Districts’ ability to repay the Notes.

APPROVAL OF LEGALITY

The validity of the Notes and certain other legal matters are subject to the approving opinion Quint & Thimmig LLP, Bond Counsel. A complete copy of the proposed form of Bond Counsel opinion is set forth in APPENDIX C—PROPOSED FORM OF OPINIONS OF BOND COUNSEL. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement.

RATINGS Moody’s Investors Service (“Moody’s”) has assigned a credit rating of “MIG 1” to the

Dry Creek, Loomis, Rocklin and Roseville Notes. A rating for the Western Placer Notes has been requested from Moody’s. Certain information was supplied by the Districts to Moody’s to be considered in evaluating the Notes. Such ratings reflect only the view of those organizations, and an explanation of the significance of such ratings may be obtained from the following: Moody’s, 99 Church Street, New York, New York, 10007, tel. (212) 553-0300. There is no assurance that the rating will be retained for any given period of time or that the same will not be revised downward or withdrawn entirely by Moody’s if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of the rating obtained may have an adverse effect on the market price of the Notes.

FINANCIAL ADVISOR The Districts have retained Capitol Public Finance Group, LLC as Financial Advisor (the

“Financial Advisor”) for the sale of the Notes. The Financial Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. The Financial Advisor is not engaged in the business of underwriting, trading or distributing municipal or other financial securities.

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UNDERWRITING All of the Notes are being purchased by Southwest Securities, Inc. (the “Underwriter”).

The Underwriter has agreed to purchase the Notes as follows:

Purchase Reoffering Underwriter’s District Price Price Compensation

Dry Creek Joint Elementary School District $2,018,739.21 $2,021,420.00 $2,680.79 Loomis Union School District $2,113,274.97 $2,115,981.00 $2,706.03 Rocklin Unified School District $10,143,860.03 $10,155,800.00 $11,939.97 Roseville City School District $7,534,616.02 $7,543,800.00 $9,183.98 Western Placer Unified School District $8,077,624.82 $8,087,360.00 $9,735.18

Each Note Purchase Agreement with respect to an issue of Notes provides that the

Underwriter will purchase all of such Notes if any are purchased. The obligation to make such purchase is subject to certain terms and conditions set forth in such Note Purchase Agreement. After a bona fide initial public offering at the price stated on the cover page hereof, the Underwriter may offer and sell the Notes to certain dealers and others at prices lower than the initial public offering price. The offering price may be changed from time to time by the Underwriter.

CONTINUING DISCLOSURE

The Districts have covenanted for the benefit of the registered owners of the Notes to provide notice of the occurrence of certain enumerated events which notice of material events will be filed by the Districts with the Municipal Securities Rulemaking Board. The specific nature of the information to be contained in the notices is summarized below under the caption APPENDIX C—FORM OF CONTINUING DISCLOSURE CERTIFICATE. These covenants have been made in order to assist the Underwriter in complying with S.E.C. Rule 15c2-12(b)(5). In the last five years, the Districts have never failed to comply in all material respects with any previous undertakings with regard to said Rule to provide annual reports or notices of events.

ADDITIONAL INFORMATION

Quotations from and summaries and explanations of the Notes and the Resolutions providing for issuance of the Notes, and the constitutional provisions, statutes and other documents referenced herein, do not purport to be complete, and reference is made to said documents, constitutional provisions and statutes for full and complete statements of their provisions.

Some of the data contained herein has been taken or constructed from the Districts’

records. Appropriate District officials, acting in their official capacities, have reviewed this Official Statement and have determined that, as of the date hereof, the information contained herein is, to the best of their knowledge and belief, true and correct in all material respects and does not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made herein, in light of the circumstances under which they were made, not misleading.

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For purposes of compliance with Rule 15c2-12 of the United States Securities and Exchange Commission as amended (“Rule 15c2-12”), this Preliminary Official Statement constitutes an “official statement” of the Districts with respect to the Notes that has been deemed “final” by the Districts as of its date except for the omission of no more than the information permitted by Rule 15c2-12.

The execution and delivery of this Official Statement by each District has been duly

authorized by its Governing Board.

DRY CREEK JOINT ELEMENTARY SCHOOL DISTRICT By ___/s/ Brad Tooker____________________

Brad Tooker Deputy Superintendent

LOOMIS UNION SCHOOL DISTRICT By ___/s/ Jay M. Stewart___________________

Jay M. Stewart Associate Superintendent, Business Services

ROCKLIN UNIFIED SCHOOL DISTRICT By ___/s/ Barbara L. Patterson_____________

Barbara L. Patterson Associate Superintendent, Business

ROSEVILLE CITY SCHOOL DISTRICT By ___/s/ Dennis Snelling__________________

Dennis Snelling Assistant Superintendent, Business Services

WESTERN PLACER UNIFIED SCHOOL DISTRICT By ___/s/ Joyce Lopes____________________

Joyce Lopes Assistant Superintendent


Appendix A

APPENDIX A

AUDITED FINANCIAL STATEMENTS OF THE DISTRICTS FOR THE YEAR ENDED JUNE 30, 2011


DRY CREEK JOINT ELEMENTARYSCHOOL DISTRICTRoseville, California

FINANCIAL STATEMENTSJune 30, 2011



FINANCIAL STATEMENTSWITH SUPPLEMENTARY INFORMATION

For the Year Ended June 30, 2011

TABLE OF CONTENTS

Page

Independent Auditors' Report 1-2

Management's Discussion and Analysis 3-9

Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Assets 10

Statement of Activities 11

Fund Financial Statements:

Balance Sheet - Governmental Funds 12

Reconciliation of the Governmental Funds Balance Sheet to theStatement of Net Assets 13

Statement of Revenues, Expenditures and Change in FundBalances - Governmental Funds 14

Reconciliation of the Statement of Revenues, Expenditures andChange in Fund Balances - Governmental Funds - to theStatement of Activities 15

Statement of Fiduciary Net Assets - Agency Funds 16

Notes to Basic Financial Statements 17-40

Required Supplementary Information:

General Fund Budgetary Comparison Schedule 41

Note to Required Supplementary Information 42

Supplementary Information:

Combining Balance Sheet - All Non-Major Funds 43

Combining Statement of Revenues, Expenditures and Change in Fund Balances - All Non-Major Funds 44




TABLE OF CONTENTS(Continued)

Page

Supplementary Information: (Continued)

Combining Statement of Changes in Assets and Liabilities - AllAgency Funds 45-47

Organization 48

Schedule of Average Daily Attendance 49

Schedule of Instructional Time 50

Schedule of Expenditure of Federal Awards 51

Reconciliation of Unaudited Actual Financial Report with AuditedFinancial Statements 52

Schedule of Financial Trends and Analysis 53

Schedule of Charter Schools 54

Notes to Supplementary Information 55-56

Independent Auditors' Report on Compliance with State Laws andRegulations 57-59

Independent Auditors' Report on Internal Control over FinancialReporting and on Compliance and Other Matters Based on anAudit of Financial Statements Performed in Accordance withGovernment Auditing Standards 60-61

Independent Auditors' Report on Compliance with RequirementsThat Could Have a Direct and Material Effect on Each MajorProgram and on Internal Control over Compliance in Accordancewith OMB Circular A-133 62-63

Findings and Recommendations:

Schedule of Audit Findings and Questioned Costs 64-67

Status of Prior Year Findings and Recommendations 68

3

9707 Cook Riolo Road, Roseville, CA 95747

(916) 770-8800 www.drycreek.k12.ca.us

Management’s Discussion and Analysis

Introduction The Management’s Discussion and Analysis section of Dry Creek Joint Elementary School District (“the District”) financial statements is District management’s view of the District’s financial condition, and provides an opportunity to discuss important fiscal issues with the Board of Trustees and the public. Accounting rules require this discussion and analysis and make reporting of District’s finances similar to that of private business. Dry Creek Joint Elementary School District The District serves residents of the Dry Creek Community in Placer County, the City of Roseville, and the Antelope Community in the County of Sacramento. At the time of this report the District serves approximately 7,000 students in seven elementary schools and three middle schools. The mission statement of the District is:

The Dry Creek Joint Elementary School District, a partnership of families, community and educators, prepares students to become active and responsible citizens in a diverse society by engaging students in a challenging curriculum that provides a solid foundation of academic skills in a safe learning environment.

Overview of the Financial Statements The report consists of three parts: management’s discussion and analysis (this section), the basic financial statements, and the required supplementary information. The basic financial statements reflect different views of the District. The first two statements are district-wide financial statements that provide information about the District’s overall financial status. The remaining statements are fund financial statements that focus on individual parts of the District, reporting District operations in more detail than the district-wide statements. The governmental funds statements tell how basic services such as regular and special education were financed as well as what remains for future spending. Fiduciary fund statements provide information about the financial relationship in which the District acts solely as a trustee or agent for the benefit of others who own the resources.


4

Financial Reports The Statement of Net Assets and the Statement of Activities, reports District-wide financial conditions and activities. In contrast, the individual fund statements focus on reporting the District’s operations in more detail. The fund financial statements reports the District’s major funds separately and combines all other non-major funds in total in one column. The major funds for the District are:

General Fund Mello-Roos Fund

Statement of Net Assets The District’s net assets increased to $113.9 million, an increase of $1.8 million. Other liabilities increased by $1.2 million mainly due to the deferral of revenues for the AARA Educational Funds Job program which will be spent in 2011-12, while long-term liabilities decreased by almost $1.9 million primarily due payments on General Obligation and Mello Roos Bonds. The table below summarizes the District’s net assets.

2010-11 2009-2010 2008-2009 % ChangeCurrent & Other Assets $ 34,954,991 $ 30,029,734 $ 33,339,645 16%Capital Assets 165,198,202 168,679,026 170,848,253 -2%

Total Assets 200,153,193$ 198,708,760$ 204,187,898$ 1%

Other Liabilities $ 8,428,109 $ 6,926,480 $ 7,694,325 22%Long-Term Liabilities 77,729,941 79,622,152 82,179,301 -2%

Total Liabilities 86,158,050$ 86,548,632$ 89,873,626$ 0%

Total Net Assets 113,995,143$ 112,160,128$ 114,314,272$ 2%

Dry Creek J.E.S.D Net Assets

Statement of Activities The District’s total revenue was $57.7 million, an increase of 9% from 2009-2010. Program revenues increased mainly due to the use of one-time American Recovery and Reinvestment Act (ARRA) funds. As discussed in prior years, one-time revenues such as state construction matching funds and the ARRA funds results in fluctuations in the revenues and expenses. Total expenses increase by $694 thousand or by 1% for 2010-11. The change in net asset totaled $1.8 million. The following table summarizes the change in net assets.


5

2010-11 2009-2010 2008-2009 % ChangeRevenues:

General Revenues:Property Taxes 17,257,857$ 17,838,447$ 18,739,888$ -3%State Aid Formula 30,678,694 28,298,107 30,967,502 8%Other 1,075,570 986,148 3,264,818 9%

Program Revenues 8,715,003 5,920,388 9,725,681 47%Total Revenues 57,727,124 53,043,090 62,697,889 9%

Expenses:Instructional-related 37,127,767 36,703,643 40,025,084 1%Pupil Services 1,970,351 1,920,710 2,101,502 3%General Administration 3,055,598 3,306,190 2,099,366 -8%Plant Services 8,696,803 8,501,651 8,865,942 2%Ancillary Services 169,243 135,478 162,469 25%Debt Service 2,940,083 2,938,402 2,440,836 0%Other Outgo 1,932,264 1,691,160 2,137,345 14%

Total Expense 55,892,109 55,197,234 57,832,544 1%

Change in Net Assets 1,835,015 (2,154,144) 4,865,345 -185%

Net Assets, July 1 112,160,128 114,314,272 109,448,927

Net Assets, June 30 113,995,143$ 112,160,128$ 114,314,272$ 2%

Dry Creek J.E.S.D.Change in Net Assets

State aid formula and property taxes accounted for 83% of the District’s revenue. Another 15% came from state and federal aid for specific programs and the remaining 2% of revenues are from miscellaneous sources as shown in the graph below.

Property Taxes30%

State Aid Formula53%

Other2%

Program Revenues15%

2010‐2011 Revenues


6

The total cost of programs and services was $55.8 million, which represents a 1% increase over the prior year. Depreciation expenses have been charged to programs, thus no depreciation is unallocated. The District expenses are predominately related to educating and caring for students (66%) as shown in the graph below.

Financial Highlights

The District’s enrollments for the current and past two year were higher than originally projected, thus lessening the impact of declining enrollment.

Long-term debt decreased $2.5 million primarily to payments on the outstanding General Obligation bonds and Mello Roos bonds.

Strong reserve levels were maintained in the 2010-2011 year. The Board of Trustees requires a 4% Designation for Economic Uncertainties and a 2% General Reserve for the General Fund. Additionally, the District reserved funds for the declining enrollment.

General Fund Budgetary Highlights Over the course of the year, the District revised the annual operating budget several times due to changes and updated projections. These revisions fall into the following categories:

Budget revisions to the adopted budget required after approval of the state budget. Budget revisions acknowledging the inclusions of restricted ending balances, deferred

revenues, and carryover from the prior year. Budget revisions to update revenues to actual enrollment information and to update

expenditures for staffing.

Instructional‐related66%

Pupil Services4%

General Administration

6%Plant Services

16%Ancillary Services

0%

Debt Service5%

Other Outgo3%

2010‐2011 Expenses


7

Other budget revisions which are routine in nature, including adjustments to categorical revenues and expenditures based on final awards, and adjustments between categories for school and department budgets.

The major differences between the final budget and actuals included:

Approximately $1.5 million of program dollars were not spent and will be brought forward into the 2011-12 budget.

Budgeted revenue over expense was anticipated to be $(622) thousand, however actual revenue to expense was $1.4 million due the carrying over of funds into 11-12.

Employee Relations The employees of the District were represented by the following groups: Dry Creek Teachers Association (DCTA), California School Employees Association (CSEA) and Amalgamated Transit Union (ATU). Agreements were reached with DCTA for an early retirement incentive, class size, and the reduction of certain items for the restoration of certain positions for 2011-12. An agreement was reached in August of 2011 with CSEA for the one furlough day for the restoration of certain positions for 2011-12. Portions of the contracts can be “reopened” each year and negotiated by the District and representatives of the respective groups. Upon completion of the negotiations, tentative agreements are subject to formal ratification by the Board of Trustees and the membership of the respective groups. Financial Condition of General Fund The District continues to maintain a solid financial condition. It has made many difficult decisions as a result state budget reductions and declining enrollment. These decisions allowed the district to reduce expenditures and resulted in a better than projected ending fund balance. The District’s reserves remain at the Board of Trustees required levels of a 4% Designation for Economic Uncertainties and a 2% General Reserve. The District continues its practice of assigning Lottery funds for expense in the following year. In 2008-09 the District created an Enrollment Decline assigning to assist when enrollment and the resulting staffing increase, yet revenues lag one-year behind. The sound financial condition is a result of the Board of Trustees requirements and policies, good fiscal management by staff, and the focus on long-term impacts of decisions.

Student Growth Since the 1990’s the District has experienced tremendous student growth, however over the past seven years enrollment has remained relatively flat as displayed in the chart below. The October 2011 enrollment was 7,000 a decline of 123 or 1.7% from the prior year. Within in the District’s boundaries there remains a considerable amount of undeveloped land with approximately 18 developments composing of approximately 2,700 projected residential units. The District is positioned to accommodate the future growth as it has obtained a school site and has state-approved plans for the next elementary school and will expand an existing elementary school. These projects will be funded through a combination of state reimbursement, developer fees and local matching funds.


8

Capital Assets To house the growth in enrollment the District has undertook an aggressive building program and has built nine new schools since 1990 and constructed two major additions. Each of these schools and additions were financed with state reimbursements, developer fees and local funds. The most recent school is Creekview Ranch Middle which opened in August 2008. As shown in the table below, by the end of 2011 the District had invested $165 million in a range of capital assets, including land, site improvements, school buildings, administrative buildings, and equipment. Depreciation expense for the year was $4.3 million.

June 30, 2011 June 30, 2010 June 30, 2009Land 19,758,808$ 19,756,131$ 19,756,131$ Site Improvments 10,909,590 11,843,793 12,490,444 Buildings 129,115,617 121,482,875 124,265,399 Equipment 2,635,094 2,123,696 2,329,697 Work In Progress 2,779,093 13,472,531 12,006,582

165,198,202$ 168,679,026$ 170,848,253$

Dry Creek J.E.S.D Capital Assets (net of depreciation)

District Indebtedness As of June 30, 2011 the District has $77.7 million of long-term liabilities. This is a decrease of $1.9 million primarily due to payments on the two largest sources of indebtedness, General Obligation Bonds and Mello-Roos Bonds. These bonds are financed by the local taxpayers through voter-approved elections and represent 84% of the District long-term debt. Additional details regarding indebtedness may be found in the Notes section of the financial statements.

‐

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

October Enrollment


9

June 30, 2011 June 30, 2010 June 30, 2009General Obligation Bonds 48,693,526$ 49,814,668$ 51,755,064$ Mello Roos Bonds 16,629,690 18,284,251 19,814,923Accreted Interest 10,994,498 9,967,628 8,873,636Unamortized Discount 1,303,062 1,425,392 1,547,722Capitalized Obligations 0 0 78,164Compensated Absences 109,165 126,213 96,820Retirement Incentive 0 4,000 12,972

77,729,941$ 79,622,152$ 82,179,301$

Dry Creek J.E.S.D Long-Term Liabilities

Factors Bearing on the District’s Future At the time the financial statements were prepared and audited, the District was aware of the following circumstances which could significantly affect its financial health in the future: The State’s economic situation remains a significant factor impacting the District’s future as

approximately 88% of total General Fund revenues for 2010-11 were from state sources or formulas.

The 2011-12 State Budget included automatic mid-year reductions if revenue projections as of December 15, 2011 are more than $1.0 billion below forecast. The potential impact to the District is approximately $1.7 million.

More information on the State of California budget and resulting education budget will be known in January 2012 when the governor presents his 2012-13 budget.

The District is unlikely to experience student growth until residential development returns, however the District is well positioned to accommodate future student growth. The District has obtained the school site and has state-approved plans for the next elementary school and will expand an existing elementary school.

Contacting the District’s Financial Management The financial report is designed to provide our citizens, taxpayers, students, investors and creditors with a general overview of the District’s finances and to show the District’s accountability for the money it receives. If you have questions regarding this report or need additional financial information, contact the Administrative Services Office, Dry Creek Joint Elementary School District, 9707 Cook Riolo Road, Roseville, California 95747.

BASIC FINANCIAL STATEMENTS



STATEMENT OF NET ASSETS

June 30, 2011

Governmental Activities

ASSETS

Cash and investments (Note 2) $ 22,854,885Receivables 10,602,116Prepaid expenditures 1,496,637Stores inventory 1,353Non-depreciable capital assets (Note 4) 22,537,901Depreciable capital assets, net of accumulated

depreciation (Note 4) 142,660,301

Total assets 200,153,193

LIABILITIES

Accounts payable 2,937,932Tax and Revenue Anticipation Notes (TRANs) payable (Note 2) 4,200,000Deferred revenue 1,290,177Long-term liabilities (Note 5):

Due within one year 3,107,825Due after one year 74,622,116

Total liabilities 86,158,050

NET ASSETS

Invested in capital assets, net of related debt 90,572,929Restricted (Note 6) 12,436,679Unrestricted 10,985,535

Total net assets $ 113,995,143

The accompanying notes are an integralpart of these financial statements.

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STATEMENT OF ACTIVITIES


Net (Expense)Revenues and

Changes in Program Revenues Net Assets

Charges Operating Capitalfor Grants and Grants and Governmental

Expenses Services Contributions Contributions Activities

Governmental activities (Note 4):Instruction $ 32,857,641 $ 494 $ 4,877,237 $ (27,979,910)Instruction-related services:

Supervision of instruction 769,386 103,238 (666,148)Instructional library, media and

technology 327,386 20 (327,366)School site administration 3,173,354 149 (3,173,205)

Pupil services:Home-to-school transportation 815,780 58,210 56,505 (701,065)Food services 20,849 (20,849)All other pupil services 1,133,722 251,673 (882,049)

General administration:Data processing 247,743 (247,743)All other general administration 2,807,855 4,391 235,879 (2,567,585)

Plant services 8,696,803 1,457 46,221 (8,649,125)Ancillary services 169,243 (169,243)Interest on long-term liabilities 2,940,083 (2,940,083)Other outgo 1,932,264 99,740 2,979,789 1,147,265

Total governmental activities $ 55,892,109 $ 164,292 $ 8,550,711 $ - (47,177,106)

General revenues:Taxes and subventions:

Taxes levied for general purposes 11,053,124Taxes levied for debt service 6,204,733

Federal and state aid not restricted to specific purposes 30,678,694Interest and investment earnings 281,417Miscellaneous 794,153

Total general revenues 49,012,121

Change in net assets 1,835,015

Net assets, July 1, 2010 112,160,128

Net assets, June 30, 2011 $ 113,995,143


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BALANCE SHEET

GOVERNMENTAL FUNDS

June 30, 2011

All TotalGeneral Non-Major Governmental

Fund Funds Funds

ASSETS

Cash and investments:Cash in County Treasury $ 5,214,680 $ 10,429,802 $ 15,644,482Cash in County Treasury, restricted

for repayment of Tax and Revenue Anticipation Notes (TRANs) 4,209,900 4,209,900

Cash in revolving fund 5,000 5,000Cash with Fiscal Agent 2,995,503 2,995,503

Receivables 10,597,553 4,563 10,602,116Prepaid expenditures 175,000 175,000Due from other funds 5,357 5,357Stores inventory 1,353 1,353

Total assets $ 20,203,486 $ 13,435,225 $ 33,638,711

LIABILITIES ANDFUND BALANCES

Liabilities:Accounts payable $ 1,849,020 $ 224,591 $ 2,073,611TRANs payable 4,200,000 4,200,000Deferred revenue 1,290,177 1,290,177Due to other funds 5,357 5,357

Total liabilities 7,344,554 224,591 7,569,145

Fund balances:Nonspendable 181,353 181,353Restricted 718,558 13,210,634 13,929,192Assigned 2,119,918 2,119,918Unassigned 9,839,103 9,839,103

Total fund balances 12,858,932 13,210,634 26,069,566

Total liabilities and fund balances $ 20,203,486 $ 13,435,225 $ 33,638,711


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RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEETTO THE STATEMENT OF NET ASSETS

June 30, 2011

Total fund balances - Governmental Funds $ 26,069,566

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

Capital assets used for governmental activities are not financialresources and, therefore, are not reported as assets ingovernmental funds. The cost of the assets is $203,254,204and the accumulated depreciation is $38,056,002 (Note 4).

165,198,202Long-term liabilities are not due and payable in the current

period and, therefore, are not reported as liabilities in thefunds. Long-term liabilities at June 30, 2011 consisted of(Note 5):

General Obligation Bonds $ (48,693,526)Mello-Roos Bonds (16,629,690)Accreted interest (10,994,498)Unamortized premium (1,303,062)Compensated absences (109,165)

(77,729,941)

Costs associated with the issuance of long-term liabilities arenot financial resources and, therefore, are not reported asassets in governmental funds. 1,321,637

Unmatured interest is not recognized until it is due and,therefore, it is not accrued as a payable in governmentalfunds. (864,321)

Total net assets - governmental activities $ 113,995,143


13


STATEMENT OF REVENUES, EXPENDITURES ANDCHANGE IN FUND BALANCES

GOVERNMENTAL FUNDS


All TotalGeneral Non-Major Governmental

Fund Funds Funds

Revenues:Revenue limit sources:

State apportionment $ 26,265,286 $ 26,265,286Local sources 10,115,807 10,115,807

Total revenue limit 36,381,093 36,381,093

Federal sources 2,815,465 2,815,465Other state sources 6,158,825 $ 1,081,542 7,240,367Other local sources 3,031,553 8,258,647 11,290,200

Total revenues 48,386,936 9,340,189 57,727,125

Expenditures:Certificated salaries 25,767,295 25,767,295Classified salaries 5,977,222 5,977,222Employee benefits 8,193,242 8,193,242Books and supplies 2,157,509 2,157,509Contract services and operating

expenditures 3,668,442 156,764 3,825,206Capital outlay 243,469 1,396,044 1,639,513Other outgo 949,080 949,080Debt service:

Principal retirement 2,775,703 2,775,703Interest 2,924,626 2,924,626

Total expenditures 46,956,259 7,253,137 54,209,396

Excess of revenues overexpenditures 1,430,677 2,087,052 3,517,729

Other financing sources (uses):Operating transfers in 3,063 900,000 903,063Operating transfers out (903,063) (903,063)

Total other financing sources (uses) 3,063 (3,063)

Net change in fund balances 1,433,740 2,083,989 3,517,729

Fund balances, July 1, 2010 11,425,192 11,126,645 22,551,837

Fund balances, June 30, 2011 $ 12,858,932 $ 13,210,634 $ 26,069,566


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RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES ANDCHANGE IN FUND BALANCES - GOVERNMENTAL FUNDS -

TO THE STATEMENT OF ACTIVITIES


Net change in fund balances - Total Governmental Funds $ 3,517,729

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

Acquisition of capital assets is an expenditure in thegovernmental funds, but increases capital assets in thestatement of net assets (Note 4). $ 1,646,314

Depreciation of capital assets is an expense that is notrecorded in the governmental funds (Note 4). (4,723,573)

The entire proceeds from disposal of capital assets arereported as revenue in the governmental funds (Note 4). (403,565)

Amortization of premiums and debt issuance cost are expensesthat are not recorded in the governmental funds. Thedifference between the debt issuance cost recognized in thecurrent period and the issuance cost amortized in the currentperiod is (Note 5): 43,686

Repayment of principal on long-term liabilities is an expenditurein the governmental funds, but decreases the long-termliabilities in the statement of net assets (Note 5). 2,775,703

Accreted interest is an expense that is not recorded in thegovernmental funds (Note 5). (1,026,870)

Unmatured interest is an expense that is not recorded in thegovernmental funds. (15,457)

In the statement of activities, expenses related to compensatedabsences and early retirement incentive are measured by theamounts earned during the year. In the governmental funds,expenditures are measured by the amount of financialresources used (Note 5). 21,048 (1,682,714)

Change in net assets of governmental activities $ 1,835,015


15


STATEMENT OF FIDUCIARY NET ASSETS

AGENCY FUNDS

June 30, 2011

ASSETS

Cash on hand and in banks (Note 2) $ 116,146

LIABILITIES

Due to student groups $ 116,146


16


NOTES TO BASIC FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Dry Creek Joint Elementary School District (the "District") accounts for its financialtransactions in accordance with the policies and procedures of the CaliforniaDepartment of Education's California School Accounting Manual. The accountingpolicies of the District conform to accounting principles generally accepted in the UnitedStates of America as prescribed by the Governmental Accounting Standards Board.The following is a summary of the more significant policies:

Reporting Entity

The Board of Trustees is the level of government which has governance responsibilitiesover all activities related to public elementary school education in the District. TheDistrict and Dry Creek Joint Elementary School District Community Facilities DistrictNo. 1 (the "Facilities District") have a financial and operational relationship which meetsthe reporting entity definition criteria of GASB Codification of Governmental Accountingand Financial Reporting Standards, Section 2100, for inclusion of the Facilities Districtas a component unit of the District. Accordingly, financial activities of the FacilitiesDistrict have been included in the basic financial statements of the District.

The following are those aspects of the relationship between the District and the FacilitiesDistrict which satisfy GASB Codification Section 2100 criteria.

A - Manifestations of Oversight

1. The Facilities District's Board of Directors was appointed by the District'sBoard of Trustees.

2. The Facilities District has no employees. The District's Superintendentand Deputy Superintendent function as agents of the Facilities District.Neither individual received additional compensation for work performedin this capacity.

3. The District exercises significant influence over operations of theFacilities District as it is anticipated that the District will be the sole lesseeof all facilities owned by the Facilities District.

B - Accounting for Fiscal Matters

1. All major financing arrangements, contracts, and other transactions of theFacilities District must have the consent of the District.

2. Any deficits incurred by the Facilities District will be reflected in the leasepayments of the District. Any surpluses of the Facilities District revert tothe District at the end of the lease period.

3. It is anticipated that the District's lease payments will be the sole revenuesource of the Facilities District.

17


NOTES TO BASIC FINANCIAL STATEMENTS(Continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Reporting Entity (Continued)

B - Accounting for Fiscal Matters (Continued)

4. The District has assumed a "moral obligation," and potentially a legalobligation, for any debt incurred by the Facilities District.

C - Scope of Public Service and Financial Presentation

1. The Facilities District was created for the sole purpose of financiallyassisting the District.

2. The Facilities District is a nonprofit, public benefit corporationincorporated under the laws of the State of California and recorded by theSecretary of State. The Facilities District was formed to provide financingassistance to the District for construction and acquisition of major capitalfacilities. When the Facilities District's Mello-Roos Bonds have been paidwith state reimbursements and the District's developer fees, title to all ofthe Facilities District's property will pass to the District for no additionalconsideration.

3. The Facilities District's financial activity is presented in the financialstatements as the Debt Service Funds. Mello-Roos Bonds issued by theFacilities District are included in the District's long-term liabilities.

Basis of Presentation - Financial Statements

The basic financial statements include a Management Discussion and Analysis(MD & A) section providing an analysis of the District's overall financial position andresults of operations, financial statements prepared using full accrual accounting for allof the District's activities, including infrastructure, and a change in the fund financialstatements to focus on the major funds.

Basis of Presentation - Government-Wide Financial Statements

The Statement of Net Assets and the Statement of Activities displays information aboutthe reporting government as a whole. Fiduciary funds are not included in thegovernment-wide financial statements. Fiduciary funds are reported only in theStatement of Fiduciary Net Assets at the fund financial statement level.

The Statement of Net Assets and the Statement of Activities are prepared using theeconomic resources measurement focus and the accrual basis of accounting.Revenues, expenses, gains, losses, assets and liabilities resulting from exchange andexchange-like transactions are recognized when the exchange takes place. Revenues,expenses, gains, losses, assets and liabilities resulting from nonexchange transactionsare recognized in accordance with the requirements of Governmental AccountingStandards Board Codification Section (GASB Cod. Sec.) N50.118-.121.

18




Basis of Presentation - Government-Wide Financial Statements (Continued)

Program revenues: Program revenues included in the Statement of Activities derivedirectly from the program itself or from parties outside the District's taxpayers orcitizenry, as a whole; program revenues reduce the cost of the function to be financedfrom the District's general revenues.

Allocation of indirect expenses: The District reports all direct expenses by function inthe Statement of Activities. Direct expenses are those that are clearly identifiable with afunction. Depreciation expense is specifically identified by function and is included inthe direct expense of each function. Interest on general long-term liabilities isconsidered an indirect expense and is reported separately on the Statement ofActivities.

Basis of Presentation - Fund Accounting

The accounts of the District are organized on the basis of funds, each of which isconsidered to be a separate accounting entity. The operations of each fund areaccounted for with a separate set of self-balancing accounts that comprise its assets,liabilities, fund balance, revenues and expenditures. District resources are allocated toand accounted for in individual funds based upon the purpose for which they are to bespent and the means by which spending activities are controlled. The District'saccounts are organized into two categories which, in aggregate, include five fund typesas follows:

A - Governmental Fund Types

1 - General Fund:

The General Fund is the general operating fund of the District andaccounts for all revenues and expenditures of the District notencompassed within other funds. All general tax revenues and otherreceipts that are not allocated by law or contractual agreement to someother fund are accounted for in this fund. General operating expendituresand the capital improvement costs that are not paid through other fundsare paid from the General Fund.

2 - Special Revenue Fund:

The Deferred Maintenance Fund is a special revenue fund used toaccount for the proceeds of specific revenue sources that are legallyrestricted to expenditures for specified purposes.

19




Basis of Presentation - Fund Accounting (Continued)

A - Governmental Fund Types (Continued)

3 - Debt Service Funds:

The Debt Service Funds are used to account for the accumulation ofresources for the payment of long-term liabilities for principal and interestrelated to the General Obligation and Mello-Roos Bond obligations. Thisclassification includes Mello-Roos and Bond Interest and RedemptionFunds.

4 - Capital Projects Funds:

The Capital Projects Funds are used to account for resources used forthe acquisition of capital facilities by the District. This classificationincludes General Obligation Bond Building, County School Facilities,Capital Facilities and Special Reserve Funds.

B - Fiduciary Fund Types

1 - Agency Funds:

The Agency Funds are used to account for the various funds for whichthe District acts as an agent. The District maintains ten agency funds,one each for the student body organizations at Dry Creek School,Heritage Oak School, Antelope Meadows School, Antelope CrossingSchool, Quail Glen School, Olive Grove School, Coyote Ridge School,Silverado Middle School, Barrett Ranch School, and Creekview RanchMiddle School.

Basis of Accounting

Basis of accounting refers to when revenues and expenditures or expenses arerecognized in the accounts and reported in the basic financial statements. Basis ofaccounting relates to the timing of the measurement made, regardless of themeasurement focus applied.

Accrual

Governmental activities in the government-wide financial statements and the fiduciaryfund financial statements are presented on the accrual basis of accounting. Revenuesare recognized when earned and expenses are recognized when incurred.

20




Modified Accrual

The governmental funds financial statements are presented on the modified accrualbasis of accounting. Under the modified accrual basis of accounting, revenues arerecorded when susceptible to accrual; i.e., both measurable and available. "Available"means collectible within the current period or within 60 days after year end.Expenditures are generally recognized under the modified accrual basis of accountingwhen the related liability is incurred. The exception to this general rule is that principaland interest on mello-roos and general obligation long-term liabilities, if any, arerecognized when due.

Budgets and Budgetary Accounting

By state law, the Board of Trustees must adopt a final budget by July 1. A publichearing is conducted to receive comments prior to adoption. The Board of Trusteescomplied with these requirements.

Stores Inventory

Stores inventory in the General Fund is valued at latest invoice cost and consistsprimarily of consumable supplies. No inventory records are maintained throughout theyear. A physical inventory is performed on June 30 and the inventory and expenseaccount balances are adjusted to reflect the physical count at year end.

Capital Assets

Capital assets purchased or acquired, with an original cost of $5,000 or more, arerecorded at historical cost or estimated historical cost. Contributed assets are reportedat fair market value as of the date received. Additions, improvements and other capitaloutlay that significantly extend the useful life of an asset are capitalized. Other costsincurred for repairs and maintenance are expensed as incurred. Capital assets aredepreciated using the straight-line method over 4 - 30 years depending on asset types.

Compensated Absences

Compensated absence benefits in the amount of $109,165 are recorded as a liability ofthe District. The liability is for the earned but unused benefits.

Accumulated Sick Leave

Sick leave benefits are not recognized as liabilities of the District. The District's policy isto record sick leave as an operating expenditure in the period taken since such benefitsdo not vest nor is payment probable; however, unused sick leave is added to thecreditable service period for calculation of retirement benefits for STRS and PERSemployees, when the employee retires.

21




Encumbrances

Encumbrance accounting is used in all budgeted funds to reserve portions of applicableappropriations for which commitments have been made. Encumbrances are recordedfor purchase orders, contracts and other commitments when they are written.Encumbrances are liquidated when the commitments are paid. All encumbrances areliquidated at June 30.

Deferred Revenue

Revenues from federal, state and local special projects and programs are recognizedwhen qualified expenditures have been incurred. Funds received but not earned arerecorded as deferred revenue until earned.

Restricted Net Assets

Restrictions of the ending net assets indicate the portions of net assets not appropriablefor expenditure or amounts legally segregated for a specific future use. The restrictionsfor revolving cash fund, prepaid expenditures and stores inventory reflect the portion ofnet assets represented by revolving fund cash, prepaid expenditures and storesinventory, respectively. These amounts are not available for appropriation andexpenditure at the balance sheet date. The restriction for general reserve representsthe portion of fund balance represented by the general reserve. The restriction forunspent categorical program revenues represents the portion of net assets restricted tospecific program expenditures. The restriction for deferred maintenance represents theportion of net assets restricted for special purposes. The restriction for debt servicerepresents the portion of net assets available for the retirement of debt. The restrictionfor capital projects represents the portion of net assets restricted for capital projects.

Fund Balance Classifications

Governmental Accounting Standards Board Codification Sections 1300 and 1800, FundBalance Reporting and Governmental Fund Type Definitions (GASB Cod. Sec. 1300and 1800) implements a five-tier fund balance classification hierarchy that depicts theextent to which a government is bound by spending constraints imposed on the use ofits resources. The five classifications, discussed in more detail below, arenonspendable, restricted, committed, assigned and unassigned.

A - Nonspendable Fund Balance:

The nonspendable fund balance classification reflects amounts that are not inspendable form, such as revolving fund cash, prepaid expenditures and storesinventory.

22




Fund Balance Classifications (Continued)

B - Restricted Fund Balance:

The restricted fund balance classification reflects amounts subject to externallyimposed and legally enforceable constraints. Such constraints may be imposedby creditors, grantors, contributors, or laws or regulations of other governments,or may be imposed by law through constitutional provisions or enablinglegislation. These are the same restrictions used to determine restricted netassets as reported in the government-wide, proprietary fund, and fiduciary trustfund statements.

C - Committed Fund Balance:

The committed fund balance classification reflects amounts subject to internalconstraints self-imposed by formal action of the Board of Trustees. Theconstraints giving rise to committed fund balance must be imposed no later thanthe end of the reporting period. The actual amounts may be determinedsubsequent to that date but prior to the issuance of the financial statements.Formal action by the Board of Trustees is required to remove any commitmentfrom any fund balance. At June 30, 2011, the District had no committed fundbalances.

D - Assigned Fund Balance:

The assigned fund balance classification reflects amounts that the District'sBoard of Trustees has approved to be used for specific purposes, based on theDistrict's intent related to those specific purposes. The Board of Trustees candesignate personnel with the authority to assign fund balances. As ofJune 30, 2011, the Superintendent has been designated with the authority toassign fund balances.

E - Unassigned Fund Balance:

In the General Fund only, the unassigned fund balance classification reflects theresidual balance that has not been assigned to other funds and that is notrestricted, committed, or assigned to specific purposes.

In any fund other than the General Fund, a positive unassigned fund balance isnever reported because amounts in any other fund are assumed to have beenassigned, at least, to the purpose of that fund. However, deficits in any fund,including the General Fund that cannot be eliminated by reducing or eliminatingamounts assigned to other purposes are reported as negative unassigned fundbalance.

23




Fund Balance Policy

The District has an expenditure policy relating to fund balances. For purposes of fundbalance classifications, expenditures are to be spent from restricted fund balances first,followed in order by committed fund balances (if any), assigned fund balances and lastlyunassigned fund balances.

While GASB Cod. Sec. 1300 and 1800 do not require districts to establish a minimumfund balance policy or a stabilization arrangement, GASB Cod. Sec. 1300 and 1800 dorequire the disclosure of a minimum fund balance policy and stabilization arrangements,if they have been adopted by the Board of Trustees. At June 30, 2011, the District hasnot established a minimum fund balance policy nor has it established a stabilizationarrangement.

Property Taxes

Secured property taxes are attached as an enforceable lien on property as of March 1.Taxes are due in two installments on or before December 10 and April 10. Unsecuredproperty taxes are due in one installment on or before August 31. The Counties ofSacramento and Placer bill and collect taxes for the District. Tax revenues arerecognized by the District when received.

Eliminations and Reclassifications

In the process of aggregating data for the statement of net assets and the statement ofactivities, some amounts reported as interfund activity and balances in the funds wereeliminated or reclassified. Interfund receivables and payables were eliminated tominimize the "grossing up" effect on assets and liabilities within the governmentalactivities column.

Estimates

The preparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions. These estimates and assumptions affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements and the reported amounts of revenues and expendituresduring the reporting period. Accordingly, actual results may differ from those estimates.

24



2. CASH AND INVESTMENTS

Cash and investments at June 30, 2011 consisted of the following:

Governmental Fiduciary Activities Funds

Pooled Funds:Cash in County Treasury $ 15,644,482Cash in County Treasury, restricted for

repayment of TRANs 4,209,900

Deposits:Cash in revolving fund 5,000Cash on hand and in banks $ 116,146

Cash with Fiscal Agent 2,995,503

Total $ 22,854,885 $ 116,146

Pooled Funds

In accordance with Education Code Section 41001, the District maintains substantiallyall of its cash in the Placer County Treasury. The County pools and invests the cash.These pooled funds are carried at cost which approximates fair value. Interest earned isdeposited monthly into participating funds. Any investment losses are proportionatelyshared by all funds in the pool.

Because the District's deposits are maintained in a recognized pooled investment fundunder the care of a third party and the District's share of the pool does not consist ofspecific, identifiable investment securities owned by the District, no disclosure of theindividual deposits and investments or related custodial credit risk classifications isrequired.

In accordance with applicable state laws, the Placer County Treasurer may invest inderivative securities. However, at June 30, 2011, the Placer County Treasurer hasindicated that the Treasurer's pooled investment fund contained no derivatives or otherinvestments with similar risk profiles.

Cash in County Treasury, Restricted for Repayment of TRANs

On September 3, 2010, the District issued $4,200,000 of Tax and Revenue AnticipationNotes (TRANs) maturing on September 15, 2011, with interest at 3.0%, to provide foranticipated cash flow deficits from operations. The TRANs are a general obligation ofthe District and are payable from revenues and cash receipts generated by the Districtduring the fiscal year ended June 30, 2011. As of June 30, 2011, funds totaling$4,209,900 held in the General Fund were pledged to repay the principal and accruedinterest.

25



2. CASH AND INVESTMENTS (Continued)

Deposits - Custodial Credit Risk

The District limits custodial credit risk by ensuring uninsured balances are collateralizedby the respective financial institution. Under Section 343 of the Dodd-Frank Wall StreetReform and Consumer Protection Act, interest-bearing cash balances held in banks areinsured up to $250,000 and noninterest-bearing cash balances held in banks are fullyinsured by the Federal Deposit Insurance Corporation (FDIC) and are collateralized bythe respective financial institution. At June 30, 2011, the carrying amount of theDistrict's accounts was $121,146 and the bank balance was $121,291, all of which wasinsured.

Cash with Fiscal Agent

Cash with Fiscal Agent represents cash balances held by the Sacramento CountyTreasurer and Union Bank of California for the repayment of outstanding Mello-RoosBonds. The cash balances are fully collateralized at June 30, 2011.

Investment Interest Rate Risk

The District does not have a formal investment policy that limits cash and investmentmaturities as a means of managing its exposure to fair value losses arising fromincreasing interest rates. At June 30, 2011, the District had no significant interest raterisk related to cash and investments held.

Investment Credit Risk

The District does not have a formal investment policy that limits its investment choicesother than the limitations of state law.

Concentration of Investment Credit Risk

The District does not place limits on the amount it may invest in any one issuer. AtJune 30, 2011, the District had no concentration of credit risk.

3. INTERFUND TRANSACTIONS

Interfund Activity

Transactions between funds of the District for goods and services are recorded asinterfund transfers. The unpaid balances at year end, as a result of such transactions,are shown as due to and due from other funds.

26



3. INTERFUND TRANSACTIONS (Continued)

Interfund Receivables/Payables

Individual interfund receivable and payable balances at June 30, 2011 were as follows:

Interfund Interfund Fund Receivables Payables

Major Fund:General Fund $ 5,357

Non-Major Fund:General Obligation Bond Building $ 5,357

$ 5,357 $ 5,357

Interfund Transfers

Interfund transfers consist of operating transfers from funds receiving revenue to fundsthrough which the resources are to be expended.

Interfund transfers for the 2010-2011 fiscal year were as follows:

Transfer from the Capital Facilities Fund to the General Fund foradministrative costs related to collecting developer fees. $ 3,063

Transfer from the Mello-Roos Fund to the General ObligationBond Building Fund for the construction of Creekview RanchMiddle School. 900,000

$ 903,063

27



4. CAPITAL ASSETS

A schedule of changes in capital assets for the year ended June 30, 2011 is shownbelow:

Balance BalanceJuly 1, June 30,

2010 Additions Deductions Transfers 2011

Non-depreciable:Land $ 19,756,131 $ 2,677 $ 19,758,808Work-in-process 13,472,531 646,463 $ (11,339,901) 2,779,093

Depreciable:Improvement of sites 19,526,339 37,750 19,564,089Buildings 144,915,685 $ 566,635 11,302,151 155,651,201Equipment 4,688,291 997,174 184,452 5,501,013

Totals, at cost 202,358,977 1,646,314 751,087 203,254,204

Less accumulated depreciation:Improvement of sites (7,682,546) (971,953) (8,654,499)Buildings (23,432,810) (3,280,434) (177,660) (26,535,584)Equipment (2,564,595) (471,186) (169,862) (2,865,919)

Total accumulateddepreciation (33,679,951) (4,723,573) (347,522) (38,056,002)

Capital assets, net $ 168,679,026 $ (3,077,259) $ 403,565 $ - $ 165,198,202

Depreciation expense was charged to governmental activities as follows:

Instruction $ 126,717Supervision of instruction 3,803Home-to-school transportation 85,477All other general administration 10,224Data processing 37,046Plant services 4,460,306

Total depreciation expense $ 4,723,573

5. LONG-TERM LIABILITIES

General Obligation Bonds, Series A

On May 1, 1997, the District issued General Obligation Bonds in the amount of$13,033,042 to fund the construction of Silverado Middle School and a new elementaryschool. The General Obligation Bonds are authorized pursuant to the special election ofthe registered voters held on March 7, 1995, and are payable from the ad valorem taxesto be levied annually upon all property subject to taxation by the District.

28



5. LONG-TERM LIABILITIES (Continued)

General Obligation Bonds, Series A (Continued)

The Bonds mature serially in varying amounts during the succeeding years through2023, with interest rates ranging from 4.40% to 6.10%. Future payments are scheduledas follows:

Year Ending June 30, Principal Interest Total

2012 $ 519,920 $ 660,080 $ 1,180,0002013 511,946 728,054 1,240,0002014 502,425 797,575 1,300,0002015 493,366 871,634 1,365,0002016 488,890 946,110 1,435,000

2017-2021 2,337,243 5,977,757 8,315,0002022-2023 897,715 3,037,285 3,935,000

Totals $ 5,751,505 $ 13,018,495 $ 18,770,000

General Obligation Bonds, Series B

On June 1, 2000, the District issued General Obligation Bonds in the amount of$8,765,000 to acquire school sites, to acquire, develop and construct new elementaryand middle schools, and to renovate existing schools. The General Obligation Bondsare authorized pursuant to the special election of the registered voters held on March 7,1995, and are payable from the ad valorem taxes to be levied annually upon all propertysubject to taxation by the District.

The Bonds mature serially in varying amounts during the succeeding years through2013, with interest rates ranging from 5.25% to 5.875%. Future payments arescheduled as follows:


2012 $ 275,000 $ 23,784 $ 298,7842013 305,000 8,197 313,197

Totals $ 580,000 $ 31,981 $ 611,981

29




2007 General Obligation Refunding Bonds

On November 28 2007, the District issued General Obligation Refunding Bonds in theamount of $7,465,000. The Refunding Bonds were issued to accomplish a partialadvance refunding of the District's General Obligation Bonds, Election of 1995, Series Band to provide funding to acquire school sites, develop and construct new elementaryand middle schools. The Refunding Bonds were authorized pursuant to the specialelection of the registered voters held on March 7, 1995, and are payable from the advalorem taxes to be levied annually upon all property subject to taxation by the District.



2012 $ 50,000 $ 312,188 $ 362,1882013 50,000 310,188 360,1882014 390,000 301,388 691,3882015 415,000 285,288 700,2882016 445,000 268,088 713,088

2017-2021 2,820,000 972,300 3,792,3002022-2025 3,040,000 272,251 3,312,251

Totals $ 7,210,000 $ 2,721,691 $ 9,931,691

2008 General Obligation Bonds

On May 30, 2008, the District issued General Obligation Bonds in the amount of$24,998,345 to fund the modernization of existing schools and construct new schoolsand classrooms. The General Obligation Bonds are authorized pursuant to the specialelection of the registered voters held on February 5, 2008, and are payable from the advalorem taxes to be levied annually upon all property subject to taxation by the District.

The Bonds mature serially in varying amounts during the succeeding years through2033, with interest rates varying from 3.00% to 8.00%.

30




2008 General Obligation Bonds (Continued)

Future payments are scheduled as follows:


2012 $ 150,000 $ 922,712 $ 1,072,7122013 215,000 917,237 1,132,2372014 290,000 909,663 1,199,6632015 375,000 899,219 1,274,2192016 460,000 885,075 1,345,075

2017-2021 3,985,000 4,036,025 8,021,0252022-2026 7,850,000 2,792,888 10,642,8882027-2031 9,329,278 4,983,085 14,312,3632032-2033 1,109,066 5,975,934 7,085,000

Totals $ 23,763,344 $ 22,321,838 $ 46,085,182

2009 General Obligation Bonds

On May 20, 2009, the District issued General Obligation Bonds in the amount of$11,558,677 to fully prepay the 2007 Certificates of Participation and to fund themodernization of existing schools and construct new schools. The General ObligationBonds are authorized pursuant to the special election of the registered voters held onFebruary 5, 2008, and are payable from the ad valorem taxes to be levied annually uponall property subject to taxation by the District.

The Bonds mature serially in varying amounts during the succeeding years through2050, with interest rates varying from 2.00% to 9.55%. Future payments are scheduledas follows:


2012 $ 80,000 $ 142,006 $ 222,0062013 40,000 140,806 180,8062014 25,000 140,093 165,0932015 139,782 139,7822016 10,000 139,632 149,632

2017-2021 205,000 682,757 887,7572022-2026 580,000 607,209 1,187,2092027-2031 1,170,000 416,581 1,586,5812032-2036 2,957,041 7,727,709 10,684,7502037-2041 3,168,694 17,751,306 20,920,0002042-2046 2,959,095 25,035,904 27,994,9992047-2050 193,847 7,276,154 7,470,001

Totals $ 11,388,677 $ 60,199,939 $ 71,588,616

31




Series 1996 Special Tax Bonds

On January 1, 1996, the District issued Mello-Roos Bonds in the amount of $9,355,000for the defeasance of the Series 1991 Special Tax Bonds, and to provide funds for theconstruction of school facilities. The Mello-Roos Bonds are authorized pursuant to theMello-Roos Community Facilities Act of 1982 and are payable from the proceeds of anannual Special Tax to be levied and collected on property within the District. TheSpecial Tax is to be levied according to the rate and method of apportionmentdetermined by a formula approved by the Board, as the legislative body of the District,and by the registered voters within the District.

The Bonds mature serially in varying amounts during the succeeding years through2016 with interest rates ranging from 4.20% to 5.20%. Future payments are scheduledas follows:


2012 $ 945,000 $ 64,658 $ 1,009,6582013 250,000 34,060 284,0602014 215,000 21,970 236,9702015 185,000 11,570 196,5702016 130,000 3,380 133,380

Totals $ 1,725,000 $ 135,638 $ 1,860,638

Series 1996B Special Tax Bonds

On November 1, 1996, the District issued Mello-Roos Bonds in the amount of$2,900,770 to provide funds for the acquisition and construction of school facilities. TheMello-Roos Bonds are authorized pursuant to the Mello-Roos Community Facilities Actof 1982 and are payable from the proceeds of an annual Special Tax to be levied andcollected on property within the District. The Special tax is to be levied according to therate and method of apportionment determined by a formula approved by the Board, asthe legislative body of the District, and by the registered voters within the District.

32




Series 1996B Special Tax Bonds (Continued)



2012 $ 111,410 $ 148,590 $ 260,0002013 315,248 469,752 785,0002014 218,080 361,920 580,0002015 137,163 252,837 390,0002016 39,800 80,200 120,0002017 168,836 376,164 545,000

Totals $ 990,537 $ 1,689,463 $ 2,680,000


On August 1, 1999, the District issued Mello-Roos Bonds in the amount of $5,254,153 toprovide funds for the advance refunding of Series 1995 Special Tax Bonds (withremaining obligation of $3,690,000) and for the acquisition and construction of schoolfacilities. With the payment to the Escrow Agent to advance refund and defease theDistrict's Series 1995 Special Tax Bonds, the Series 1995 Special Tax Bonds areconsidered to be defeased, and the obligations have been removed from the District'sgeneral purpose financial statements. The Mello-Roos Bonds are authorized pursuantto the Mello-Roos Community Facilities Act of 1982 and are payable from the proceedsof an annual Special Tax to be levied and collected on property within the District. TheSpecial tax is to be levied according to the rate and method of apportionmentdetermined by a formula approved by the Board, as the legislative body of the District,and by the registered voters within the District.



2012 $ 390,000 $ 109,170 $ 499,1702013 420,000 88,710 508,7102014 460,000 66,040 526,0402015 490,000 41,218 531,2182016 535,000 51,307 586,307

2017-2020 309,153 528,717 837,870

Totals $ 2,604,153 $ 885,162 $ 3,489,315

33





On August 1, 2003, the District issued Mello-Roos Bonds in the amount of $9,600,000 toprovide funds for the acquisition and construction of school facilities. The Mello-RoosBonds are authorized pursuant to the Mello-Roos Community Facilities Act of 1982 andare payable from the proceeds of an annual Special Tax to be levied and collected onproperty within the District. The Special tax is to be levied according to the rate andmethod of apportionment determined by a formula approved by the Board, as thelegislative body of the District, and by the registered voters within the District.

The Bonds mature serially in varying amounts during the succeeding years through2026, with interest rates ranging from 3.0% to 5.0%. Future payments are scheduled asfollows:


2012 $ 290,000 $ 372,586 $ 662,5862013 320,000 361,751 681,7512014 350,000 349,341 699,3412015 395,000 334,791 729,7912016 425,000 318,391 743,391

2017-2021 3,035,000 1,235,243 4,270,2432022-2026 3,550,000 359,371 3,909,371

Totals $ 8,365,000 $ 3,331,474 $ 11,696,474


On August 1, 2005, the District issued Mello-Roos Bonds in the amount of $3,150,000 toprovide funds for the acquisition and construction of school facilities. The Mello-RoosBonds are authorized pursuant to the Mello-Roos Community Facilities Act of 1982 andare payable from the proceeds of an annual Special Tax to be levied and collected onproperty within the District. The Special tax is to be levied according to the rate andmethod of apportionment determined by a formula approved by the Board, as thelegislative body of the District, and by the registered voters within the District.

34




Series 2005 Special Tax Bonds (Continued)

The Bonds mature serially in varying amounts during the succeeding years through2029, with interest rates ranging from 3.0% to 5.0%. Future payments are scheduled asfollows:


2012 $ 65,000 $ 127,050 $ 192,0502013 70,000 124,687 194,6872014 85,000 121,869 206,8692015 90,000 118,588 208,5882016 100,000 114,900 214,900

2017-2021 680,000 499,695 1,179,6952022-2026 1,030,000 315,635 1,345,6352027-2029 825,000 52,551 877,551

Totals $ 2,945,000 $ 1,474,975 $ 4,419,975

Capitalized Lease Obligations

The District leases certain portable classrooms and office equipment under capital leaseagreements. The lease was paid off as of June 30, 2010.

Retirement Incentive

The retiring superintendent's contract included $4,000 annually, for a period of fiveyears to be applied toward health benefits. The last payment of $4,000 was made in thecurrent year. There was no liability at June 30, 2011.

Changes in Long-Term Liabilities

A schedule of changes in long-term liabilities for the year ended June 30, 2011 is asfollows:

Balance Balance AmountsJuly 1, June 30, Due Within

2010 Additions Deductions 2011 One Year

General Obligation Bonds $ 49,814,668 $ 1,121,142 $ 48,693,526 $ 1,074,920Mello-Roos Bonds 18,284,251 1,654,561 16,629,690 1,801,410Accreted interest 9,967,628 $ 1,026,870 10,994,498Unamortized premium 1,425,392 122,330 1,303,062 122,330Retirement incentive 4,000 4,000Compensated absences 126,213 17,048 109,165 109,165

$ 79,622,152 $ 1,026,870 $ 2,919,081 $ 77,729,941 $ 3,107,825

35




Changes in Long-Term Liabilities (Continued)

Payments and amortization of premiums relating to the General Obligation Bonds aremade from the Bond Interest and Redemption Fund. Payments relating to the Mello-Roos Bonds are made from the Mello-Roos Fund. Payments on the Capitalized leaseobligations are made from the General Fund. Payments on the compensated absencesand early retirement incentive are made from the fund for which the related employeeworked.

6. NET ASSETS / FUND BALANCES

The restricted net assets as of June 30, 2011 consisted of the following:


Restricted for revolving cash fund $ 5,000Restricted for prepaid expenditures 1,496,637Restricted for stores inventory 1,353Restricted for unspent categorical program revenues 718,558Restricted for deferred maintenance 1,549,617Restricted for debt service 2,649,188Restricted for capital projects 6,016,326

$ 12,436,679

The designated fund balances as of June 30, 2011 consisted of the following:

Governmental Funds

Designated for economic uncertainties $ 5,248,728Other designations 3,977,819

$ 9,226,547

36



6. NET ASSETS / FUND BALANCES (Continued)

Fund balances, by category, at June 30, 2011 consisted of the following:

AllGeneral Non-Major

Fund Funds Total

Nonspendable:Revolving cash fund $ 5,000 $ 5,000Prepaid expenses 175,000 175,000Stores inventory 1,353 1,353

Subtotal nonspendable 181,353 181,353

Restricted:Unspent categorical revenues 718,558 718,558Special revenues $ 1,549,617 1,549,617Debt service 5,644,691 5,644,691Capital projects 6,016,326 6,016,326

Subtotal restricted 718,558 13,210,634 13,929,192

Assigned:Board assignments 2,119,918 1,549,617 3,669,535

Unassigned:Designated for economic uncertainty 5,248,728 5,248,728Undesignated 4,590,375 4,590,375

Subtotal unassigned 9,839,103 9,839,103

Total fund balances $ 12,858,932 $ 14,760,251 $ 27,619,183

7. EMPLOYEE RETIREMENT SYSTEMS

Qualified employees are covered under multiple-employer defined benefit pension plansmaintained by agencies of the State of California. Certificated employees are membersof the State Teachers' Retirement System (STRS), and classified employees aremembers of the California Public Employees' Retirement System (CalPERS).

37



7. EMPLOYEE RETIREMENT SYSTEMS (Continued)

Plan Description and Provisions

California Public Employees' Retirement System (CalPERS)

Plan Description

The District contributes to the School Employer Pool under the California PublicEmployees' Retirement System (CalPERS), a cost-sharing multiple-employer publicemployee retirement system defined benefit pension plan administered by CalPERS.The plan provides retirement and disability benefits, annual cost-of-living adjustments,and death benefits to plan members and beneficiaries. Benefit provisions areestablished by state statutes, as legislatively amended, within the Public Employees'Retirement Law. CalPERS issues a separate comprehensive annual financial reportthat includes financial statements and required supplementary information. Copies ofthe CalPERS annual financial report may be obtained from the CalPERS ExecutiveOffice, 400 Q Street, Sacramento, California 95811.

Funding Policy

Active plan members are required to contribute 7% of their salary (6.2% of monthlysalary over $133.33 if the member participates in Social Security), and the District isrequired to contribute an actuarially determined rate. The actuarial methods andassumptions used for determining the rate are those adopted by the CalPERS Board ofAdministration. The required employer contribution rate for fiscal year 2010-2011 was10.707% of annual payroll. The contribution requirements of the plan members areestablished by state statute. The District's contributions to CalPERS for the fiscal yearsending June 30, 2009, 2010 and 2011 were $554,417, $530,336 and $549,311,respectively, and equal 100% of the required contributions for each year.

State Teachers' Retirement System (STRS)

Plan Description

The District contributes to the State Teachers' Retirement System (STRS), a cost-sharing multiple-employer public employee retirement system defined benefit pensionplan administered by STRS. The plan provides retirement, disability and survivorbenefits to beneficiaries. Benefit provisions are established by state statutes, aslegislatively amended, within the State Teachers' Retirement Law. STRS issues aseparate comprehensive annual financial report that includes financial statements andrequired supplementary information. Copies of the STRS annual financial report may beobtained from the STRS Executive Office, 100 Waterfront Place, West Sacramento,California 95605.

38




Plan Description and Provisions (Continued)

State Teachers' Retirement System (STRS) (Continued)

Funding Policy

Active plan members are required to contribute 8% of their salary. The requiredemployer contribution rate for fiscal year 2010-2011 was 8.25% of annual payroll. Thecontribution requirements of the plan members are established by state statute. TheDistrict's contributions to STRS for the fiscal years ending June 30, 2009, 2010 and2011 were $2,325,389, $2,149,163 and $2,122,736, respectively, and equal 100% ofthe required contributions for each year.

8. JOINT POWERS AGREEMENT

Schools Insurance Group

The District is a member of a Joint Powers Authority, Schools Insurance Group (SIG),for the operation of a common risk management and insurance program. The programcovers workers' compensation, property/liability, and health and welfare insurance. Themembership includes the school districts in Placer and Nevada counties and theirrespective County Offices. SIG is governed by an Executive Board consisting ofrepresentatives from member districts. The Executive Board controls the operations ofSIG, including selections of management and approval of operating budgets.

The following is a summary of financial information for SIG at June 30, 2011.

Total assets $ 78,249,905Total liabilities $ 28,922,356Total net assets $ 49,327,549Total revenues $ 76,619,585Total expenses $ 72,953,461Change in net assets $ 3,666,124

The relationship between the District and the Joint Powers Authority is such that theJoint Powers Authority is not a component unit of the District for financial reportingpurposes.

39



8. JOINT POWERS AGREEMENT (Continued)

School Project for Utility Rate Reduction

The District is also a member of a Joint Powers Authority, School Project for Utility RateReduction (SPURR), for the direct purchase of gas, electricity, and other utility services.SPURR also provides advisory services relative to utilities.

The following is a summary of the financial information for School Project for Utility RateReduction at June 30, 2010 (the latest information available):

Total assets $ 13,604,232Total liabilities $ 7,841,831Net assets $ 5,762,401Total revenues $ 37,110,968Total expenses $ 37,334,283Change in net assets $ (223,315)

9. CONTINGENCIES

The District is subject to legal proceedings and claims which arise in the ordinary courseof business. In the opinion of management, the amount of ultimate liability with respectto these actions will not materially affect the financial position or results of operations ofthe District.

Also, the District has received state and federal funds for specific purposes that aresubject to review or audit by the grantor agencies. Although such audits could generateexpenditure disallowances under terms of the grants, it is believed that anyrequirements will not be material.

10. SUBSEQUENT EVENTS

Tax and Revenue Anticipation Notes

On September 23, 2011, the District issued $2,900,000 of Tax and RevenueAnticipation Notes (TRANs) maturing on October 04, 2012, with interest at 2.0%, toprovide for anticipated cash flow deficits from operations. The TRANs are a generalobligation of the District and are payable from revenues and cash receipts generated bythe District during the fiscal years ended June 30, 2012 and June 30, 2013.

40

REQUIRED SUPPLEMENTARY INFORMATION



GENERAL FUND

BUDGETARY COMPARISON SCHEDULE


Budget VarianceFavorable

Original Final Actual (Unfavorable)


State apportionment $ 21,893,677 $ 26,108,916 $ 26,265,286 $ 156,370Local sources 12,645,513 10,251,445 10,115,807 (135,638)

Total revenue limit 34,539,190 36,360,361 36,381,093 20,732

Federal sources 1,987,431 2,918,307 2,815,465 (102,842)Other state sources 5,513,862 6,168,503 6,158,825 (9,678)Other local sources 2,461,108 3,133,807 3,031,553 (102,254)

Total revenues 44,501,591 48,580,978 48,386,936 (194,042)

Expenditures:Certificated salaries 25,483,999 25,870,145 25,767,295 102,850Classified salaries 5,952,259 6,020,073 5,977,222 42,851Employee benefits 8,279,150 8,237,494 8,193,242 44,252Books and supplies 1,752,167 2,651,344 2,157,509 493,835Contract services and operating

expenditures 4,489,907 4,985,160 3,668,442 1,316,718Capital outlay 31,092 481,738 243,469 238,269Other outgo 764,605 949,080 949,080

Total expenditures 46,753,179 49,195,034 46,956,259 2,238,775

(Deficiency) excess of revenues(under) over expenditures (2,251,588) (614,056) 1,430,677 2,044,733

Other financing sources (uses):Operating transfers in 5,000 5,004 3,063 (1,941)Operating transfers out (111,032)

Total other financing sources (uses) (106,032) 5,004 3,063 (1,941)

Net change in fund balance (2,357,620) (609,052) 1,433,740 2,042,792

Fund balance, July 1, 2010 11,425,192 11,425,192 11,425,192

Fund balance, June 30, 2011 $ 9,067,572 $ 10,816,140 $ 12,858,932 $ 2,042,792


41


NOTE TO REQUIRED SUPPLEMENTARY INFORMATION

1. PURPOSE OF SCHEDULE

A - Budgetary Comparison Schedule

The District employs budget control by object codes and by individualappropriation accounts. Budgets are prepared on the modified accrual basis ofaccounting in accordance with accounting principles generally accepted in theUnited States of America as prescribed by the Governmental AccountingStandards Board. The budgets are revised during the year by the Board ofTrustees to provide for revised priorities. Expenditures cannot legally exceedappropriations by major object code. The originally adopted and final revisedbudgets for the General Fund are presented as Required SupplementaryInformation. The basis of budgeting is the same as GAAP.

42

SUPPLEMENTARY INFORMATION



COMBINING BALANCE SHEET

ALL NON-MAJOR FUNDS

June 30, 2011

General County BondDeferred Obligation Capital School Special Interest and

Maintenance Bond Building Facilities Facilities Reserve Redemption Mello-Roos Fund Fund Fund Fund Fund Fund Fund Total

ASSETS

Cash in County Treasury $ 1,583,856 $ 2,916,221 $ 2,976,816 $ 308,284 $ 2,644,625 $ 10,429,802Cash with Fiscal Agent $ 2,995,503 2,995,503Receivables 3,458 1,105 4,563Due from other funds 5,357 5,357

Total assets $ 1,583,856 $ 2,921,578 $ 2,976,816 $ - $ 308,284 $ 2,648,083 $ 2,996,608 $ 13,435,225


Liabilities:Accounts payable $ 34,239 $ 183,556 $ 6,796 $ 224,591

Fund balances:Restricted 1,549,617 2,738,022 2,970,020 $ 308,284 $ 2,648,083 $ 2,996,608 13,210,634

Total liabilities and fundbalances $ 1,583,856 $ 2,921,578 $ 2,976,816 $ - $ 308,284 $ 2,648,083 $ 2,996,608 $ 13,435,225


43


COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCES

ALL NON-MAJOR FUNDS


General County BondDeferred Obligation Capital School Special Interest and

Maintenance Bond Building Facilities Facilities Reserve Redemption Mello-Roos Fund Fund Fund Fund Fund Fund Fund Total

Revenues:Other state sources $ 1,081,542 $ 1,081,542Other local sources $ 1,328,708 $ 91,519 $ 1,681,401 $ 257 $ 5,817 2,019,188 $ 3,131,757 8,258,647

Total revenues 1,328,708 91,519 1,681,401 257 5,817 3,100,730 3,131,757 9,340,189

Expenditures:Contract services and

operating expenditures 52,454 1,908 102,402 156,764Capital outlay 346,927 1,025,597 23,263 257 1,396,044Debt service:

Principal retirement 1,121,142 1,654,561 2,775,703Interest 2,016,946 907,680 2,924,626

Total expenditures 399,381 1,027,505 125,665 257 3,138,088 2,562,241 7,253,137

Excess (deficiency) of revenuesover (under) expenditures 929,327 (935,986) 1,555,736 5,817 (37,358) 569,516 2,087,052

Other financing sources (uses):Operating transfers in 900,000 900,000Operating transfers out (3,063) (900,000) (903,063)

Total other financing sources (uses) 900,000 (3,063) (900,000) (3,063)

Net change in fund balances 929,327 (35,986) 1,552,673 5,817 (37,358) (330,484) 2,083,989

Fund balances, July 1, 2010 620,290 2,774,008 1,417,347 302,467 2,685,441 3,327,092 11,126,645

Fund balances, June 30, 2011 $ 1,549,617 $ 2,738,022 $ 2,970,020 $ - $ 308,284 $ 2,648,083 $ 2,996,608 $ 13,210,634


44


COMBINING STATEMENT OF CHANGES IN ASSETSAND LIABILITIES (UNAUDITED)

ALL AGENCY FUNDS



2010 Additions Deductions 2011

Dry Creek School

Assets:Cash on hand and in banks $ 407 $ 2,051 $ 2,169 $ 289

Liabilities:Due to student groups $ 407 $ 2,051 $ 2,169 $ 289

Heritage Oak School

Assets:Cash on hand and in banks $ 1,941 $ 989 $ 2,351 $ 579

Liabilities:Due to student groups $ 1,941 $ 989 $ 2,351 $ 579

Antelope Meadows School

Assets:Cash on hand and in banks $ 1,242 $ 1,254 $ 1,213 $ 1,283

Liabilities:Due to student groups $ 1,242 $ 1,254 $ 1,213 $ 1,283

Antelope Crossing School



Quail Glen School



(Continued)

45



ALL AGENCY FUNDS(Continued)




Olive Grove School

Assets:Cash on hand and in banks $ 284 $ 130 $ 293 $ 121

Liabilities:Due to student groups $ 284 $ 130 $ 293 $ 121

Coyote Ridge School

Assets:Cash on hand and in bank $ 2,963 $ 2,651 $ 2,292 $ 3,322


Silverado Middle School



Barrett Ranch School



Creekview Ranch Middle School



(Continued)

46



ALL AGENCY FUNDS(Continued)




Total - All Agency Funds




47


ORGANIZATION

June 30, 2011

Dry Creek Joint Elementary School District was established in 1876 and is comprised ofan area of approximately 17 square miles located in Placer and Sacramento Counties. Therewere no changes in the boundaries of the District during the current year. As of June 30, 2011,the District is operating seven elementary schools and three middle schools.

GOVERNING BOARD

Name Office Term Expires

Tracy Pittman President December 2014Scott Otsuka Clerk December 2012Jeffery Holland Member December 2014Jeff Randall Member December 2012Diane Howe Member December 2014

ADMINISTRATION

Mark GeyerSuperintendent

Bradley TookerDeputy Superintendent

Gordon Medd **Assistant Superintendent, Administrative Services

Roger Van PuttenChief Fiscal Officer

Evonne RogersAssistant Superintendent, Educational Services

** Gordon Medd left the position effective June 30, 2011. The District has restructured and theposition has been suspended.

48


SCHEDULE OF AVERAGE DAILY ATTENDANCE


SecondPeriod Annual

Report Report

Elementary:Kindergarten 672 673First through Third 2,058 2,061Fourth through Sixth 2,312 2,314Seventh and Eighth 1,689 1,688Home and Hospital 3 3Special Education 172 173

Totals 6,906 6,912

See accompanying notes tosupplementary information.

49


SCHEDULE OF INSTRUCTIONAL TIME


1986-87 NumberMinutes 1982-83 2010-11 of DaysRequire- Actual Actual Traditional

Grade Level ment Minutes Minutes Calendar Status

Kindergarten 36,000 31,680 36,900 180 In Compliance

Grade 1 50,400 41,360 51,300 180 In Compliance








See accompanying notes to supplementary information.

50


SCHEDULE OF EXPENDITURE OF FEDERAL AWARDS


Pass-Through

Federal Entity FederalCatalog Federal Grantor/Pass-Through Identifying Expend-

Number Grantor/Program or Cluster Title Number itures

U.S. Department of Education - Passed through California Departmentof Education

Special Education Cluster:84.027 Special Ed: IDEA Basic Local Assistance 13379 $ 1,016,85984.173 Special Ed: IDEA Preschool Grants, Part B,

Section 619 13430 22,29984.027A Special Ed: IDEA Preschool Grant Local Entitle-

ment, Part B, Section 611 13682 7,30484.391 Special Ed: ARRA IDEA Part B, Basic Local

Assistance 15003 276,67084.391 Special Ed: ARRA IDEA Part B, Sec 611

Preschool Local Entitlement 15002 108,369

Subtotal Special Education Cluster 1,431,501

Title I Cluster:84.010 NCLB: Title I, Part A, Basic Grants Low Income

and Neglected 14329 546,16784.389 NCLB: ARRA Title I, Part A, Basic Grants Low Income

and Neglected 15005 80,720

Subtotal Title I Cluster 626,887

84.196 NCLB: Title X, McKinney-Vento Homeless ChildrenAssistance Grants 14332 1,677

84.318 NCLB: Title II, Part D, Enhancing Education throughTechnology (EETT) 14334 8,919

84.186 NCLB: Title IV, Part A, Safe and Drug Free Schoolsand Communities 13453 39

84.367 NCLB: Title II, Part A, Improving Teacher Quality 14341 106,71784.365 NCLB: Title III, Immigrant Education Program 14346 104,39484.387 NCLB: Title X, ARRA McKinney-Vento Homeless

Assistance 15120 50,55084.394 ARRA: State Fiscal Stabilization Fund 25008 935,024

Total U.S. Department of Education 3,265,708

U.S. Department of Health and Human Services - Passed throughCalifornia Department of Education

93.778 Medi-Cal Billing Option 10013 56,31593.778 Medi-Cal Administrative Activities (MAA) 10060 20,675

Total U.S. Department of Health and Human Services 76,990

Total Federal Programs $ 3,342,698


51


RECONCILIATION OF UNAUDITED ACTUAL FINANCIAL REPORTWITH AUDITED FINANCIAL STATEMENTS


There were no audit adjustments proposed to any funds of the District.


52


SCHEDULE OF FINANCIAL TRENDS AND ANALYSIS


(Budget) 2012 2011 2010 2009

General Fund

Revenues and otherfinancing sources $ 48,030,544 $ 48,389,999 $ 47,191,654 $ 52,987,132

Expenditures 48,752,066 46,956,259 46,796,437 50,992,462Other uses and transfers out 16,000 495,272 414,944

Total outgo 48,768,066 46,956,259 47,291,709 51,407,406

Change in fund balance $ (737,522) $ 1,433,740 $ (100,055) $ 1,579,726

Ending fund balance $ 12,121,410 $ 12,858,932 $ 11,425,192 $ 11,525,247

Available reserves $ 10,536,800 $ 9,839,103 $ 5,198,081 $ 3,169,801

Designated for economicuncertainties $ 5,709,484 $ 5,248,728 $ 1,891,670 $ 2,056,298

Undesignated fund balance $ 4,827,316 $ 4,590,375 $ 3,306,411 $ 1,113,503

Available reserves as per-centages of total outgo 21.6% 21.0% 11.0% 6.2%

Total long-term liabilities $ 74,622,116 $ 77,729,941 $ 79,622,152 $ 84,054,501

Average daily attendanceat P-2 6,700 6,906 7,000 7,123

The General Fund fund balance has increased by $2,913,411 over the past three years. The Districtprojects a decrease of $737,522 for the year ending June 30, 2012. For a district this size, the State ofCalifornia recommends available reserves of at least 3% of total General Fund expenditures, transfersout, and other uses be maintained. The District has met this requirement.

The District has incurred operating surpluses in two of the past three years and anticipates incurring anoperating deficit during the year ending June 30, 2012.

Total long-term liabilities have decreased by $6,324,560 over the past two years.

Average daily attendance has decreased by 217 over the past two years and is anticipated to decrease by206 during the year ending June 30, 2012.


53


SCHEDULE OF CHARTER SCHOOLS


Included in DistrictFinancial Statements, or

Charter Schools Chartered by District Separate Report

The District does not sponsor any charter schools.


54


NOTES TO SUPPLEMENTARY INFORMATION

1. PURPOSE OF SCHEDULES

A - Schedule of Average Daily Attendance

Average daily attendance is a measurement of the number of pupils attendingclasses of the District. The purpose of attendance accounting from a fiscalstandpoint is to provide the basis on which apportionments of state funds aremade to school districts. This schedule provides information regarding theattendance of students at various grade levels and in different programs.

B - Schedule of Instructional Time

The District has received incentive funding for increasing instructional time asprovided by the Incentives for Longer Instructional Day. This schedulepresents information on the amount of instructional time offered by the District,and whether the District complied with the provisions of Education CodeSections 46201 through 46206.

C - Schedule of Expenditure of Federal Awards

OMB Circular A-133 requires a disclosure of the financial activities of allfederally funded programs. This schedule was prepared to comply with A-133requirements, and is presented on the modified accrual basis of accounting.

The following schedule provides a reconciliation between revenues reported onthe Statement of Revenues, Expenditures and Change in Fund Balances andthe related expenditures reported on the Schedule of Expenditure of FederalAwards. The reconciling amounts represent Federal funds that have beenrecorded as revenues that have not been expended by June 30, 2011.

CFDA Description Number Amount

Total Federal revenues, Statement ofRevenues, Expenditures and Changein Fund Balances $ 2,815,465

Add: State Fiscal Stabilization Fundsspent from prior year awards 84.394 616,136

Less: Medi-Cal Billing Option not spent 93.778 (88,903)

Total Schedule of Expenditure of FederalAwards $ 3,342,698

55


NOTES TO SUPPLEMENTARY INFORMATION(Continued)

1. PURPOSE OF SCHEDULES (Continued)

D - Reconciliation of Unaudited Actual Financial Report with Audited FinancialStatements

This schedule provides the information necessary to reconcile the UnauditedActual Financial Report to the audited financial statements.

E - Schedule of Financial Trends and Analysis

This schedule provides trend information on the District's financial conditionover the past three years and its anticipated condition for the 2011-2012 fiscalyear, as required by the State Controller's Office.

F - Schedule of Charter Schools

This schedule provides information for the California Department of Educationto monitor financial reporting by Charter Schools.

2. EARLY RETIREMENT INCENTIVE PROGRAM

Education Code Section 14502 requires certain disclosure in the financial statements ofdistricts which adopt Early Retirement Incentive Programs pursuant to Education CodeSection 22714 and 44929. For the fiscal year ended June 30, 2011, the District did notadopt this program.

56

FINDINGS AND RECOMMENDATIONS



SCHEDULE OF AUDIT FINDINGS AND QUESTIONED COSTS

Year Ended June 30, 2011

SECTION I - SUMMARY OF AUDITORS' RESULTS

FINANCIAL STATEMENTS

Type of auditors' report issued: Unqualified

Internal control over financial reporting:Material weakness(es) identified? Yes X NoSignificant deficiency(ies) identified not considered

to be material weakness(es)? Yes X None reported

Noncompliance material to financial statements noted? Yes X No

FEDERAL AWARDS

Internal control over major programs:Material weakness(es) identified? Yes X NoSignificant deficiency(ies) identified not considered


Type of auditors' report issued on compliance formajor programs: Unqualified

Any audit findings disclosed that are required to bereported in accordance with Circular A-133,Section .510(a)? Yes X No

Identification of major programs:

CFDA Number(s) Name of Federal Program or Cluster

84.027, 84.027A, 84.173, 84.391 Special Education Cluster84.394 ARRA: State Fiscal Stabilization Fund84.010, 84.389 Title I Cluster

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

Auditee qualified as low-risk auditee? Yes X No

STATE AWARDS

Internal control over state programs:Material weakness(es) identified? Yes X NoSignificant deficiency(ies) identified not considered

to be material weaknesses? Yes X None reported

Type of auditors' report issued on compliance forstate programs: Unqualified

64


SCHEDULE OF AUDIT FINDINGS AND QUESTIONED COSTS(Continued)


SECTION II - FINANCIAL STATEMENT FINDINGS

No matters were reported.

65




SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS


66




SECTION IV - STATE AWARD FINDINGS AND QUESTIONED COSTS


67

STATUS OF PRIOR YEAR




STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS


Finding/Recommendation Current StatusDistrict ExplanationIf Not Implemented

2010-1

District required internal controlprocedures were not followed for theAssociated Student Body (ASB)accounts. Specifically, the followingdeficiencies were noted:

Cash remitted to the ASB was notcounted in dual custody andevidenced by an appropriate cashreceipt.

Cash deposited into the bank was notevidenced by the necessarysupporting documentation.

Cash discrepancies were noted in thefinancial reports without properdisposition and documentation of thereason.

Transfers between studentorganization accounts was notsupported by any documentation.

The District should evaluate the adequacyof training and personnel to ensure that allDistrict assets are safeguarded. Further,the District should test the associatedstudent body accounts throughout theyear to ensure compliance with Districtrequired policies and procedures.

Implemented.

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TABLE OF CONTENTS

Page

Independent Auditors Report 1-2

Management’s Discussion and Analysis 3-20







Reconciliation of the Governmental Funds Balance Sheet to theStatement of Net Assets 24






Charter Schools Fund Budgetary Comparison Schedule 48

Schedule of Other Postemployment Benefits (OPEB) Funding Progress 49



Combining Statement of Revenues, Expenditures and Change inFund Balances - All Non-Major Funds 51





Page


Organization 52



Schedule of Expenditure of Federal Awards 55





Independent Auditors’ Report on Compliance with State Laws andRegulations 61-63

Independent Auditors’ Report on Internal Control over FinancialReporting and on Compliance and Other Matters Based on anAudit of Financial Statements Performed in Accordance withGovernment Auditing Standards 64-65

Independent Auditors’ Report on Compliance with RequirementsThat Could Have a Direct and Material Effect on Each MajorProgram and on Internal Control over Compliance in Accordancewith 0MB Circular A-i 33 66-67



Status of Prior Year Findings and Recommendations 72

PERRY-SMITH4 0Cn’

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C rrnento, CA 95814www. perr y-sm4h orn

916441.1000

INDEPENDENT AUDITOR’S REPORT

Board of TrusteesLoomis Union School DistrictLoomis, California

We have audited the accompanying financial statements of the governmental activities, eachmajor fund and the aggregate remaining fund information of Loomis Union School District, as of andfor the year ended June 30, 2011, which collectively comprise Loomis Union School District’s basicfinancial statements as listed in the Table of Contents. These financial statements are theresponsibility of the District’s management. Our responsibility is to express opinions on these financialstatements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basis for ouropinions.

In our opinion the financial statements referred to above present fairly, in all material respects,the respective financial position of the governmental activities, each major fund and the aggregateremaining fund information of Loomis Union School District as of June 30, 2011, and the respectivechanges in financial position for the year then ended, in conformity with accounting principles generallyaccepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report datedOctober 27, 2011 on our consideration of Loomis Union School District’s internal control over financialreporting and our tests of its compliance with certain provisions of laws, regulations, contracts andgrant agreements and other matters. The purpose of that report is to describe the scope of our testingof internal control over financial reporting and compliance and the results of that testing, and not toprovide an opinion on the internal control over financial reporting or on compliance. That report is anintegral part of an audit performed in accordance with Government Auditing Standards and should beconsidered in assessing the results of our audit.

Sacramento San Fancsco

INDEPENDENT AUDITORS’ REPORT(Continued)

Management’s Discussion and Analysis and the Required Supplementary Information, such asthe General Fund Budgetary Comparison Schedule, the Charter Schools Fund Budgetary ComparisonSchedule and the Schedule of Other Postemployment Benefits Funding Progress, are not requiredparts of the basic financial statements, but are supplementary information required by accountingprinciples generally accepted in the United States of America. We have applied certain limitedprocedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation of the required supplementary information. However, we did not auditthe information and express no opinion on it.

Our audit was conducted for the purposes of forming an opinion on the financial statements thatcollectively comprise Loomis Union School District’s basic financial statements. The accompanyingfinancial and statistical information listed in the Table of Contents, including the Schedule ofExpenditure of Federal Awards, which is required by U.S. Office of Management and Budget CircularA-i 33, Audits of States, Local Governments, and Non-Profit Organizations, s presented for purposesof additional analysis and is not a required part of the basic financial statements of Loomis UnionSchool District. Such information has been subjected to the auditing procedures applied in the audit ofthe basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation tothe basic financial statements taken as a whole.

Sacramento, CaliforniaOctober 27, 2011

MANAGEMENT’S DISCUSSION AND ANALYSIS

BRIEF DESCRIPTION OF FINANCIAL STATEMENTSAND FINANCIAL HIGHLIGHTS

2011-12 Budget Year

Governor Brown began the 201 1-12 budget cycle by acknowledging that education had takenmore than its fair share of budget reductions in past years and that he was going to find solutionstotaling more than $25 billion without further cuts to education in either the current year or in thebudget year. Under the Governor’s initial budget proposal, education would not have to absorbeither midyear cuts or take on additional cuts the following year. The Governor’s flat-fundingcommitment to education was predicated on the passage of an extension of the temporary taxesfor an additional five years. In order to extend the temporary taxes, the Governor needed toconvince the Legislature to place the tax extension on the ballot on a two-thirds vote in bothhouses and then hope the voters passed the measure on a majority vote — no problem. Withoutthe tax extension, 2011-12 base revenue limits per ADA would be lowered by $330.

The Governor’s proposed budget also acknowledged that the recession was longer and muchdeeper than originally predicted. The proposed budget extended the flexibility in the use ofcategorical funds, reduced penalties for K-3 Class-Size Reduction, reduced set asides for routinerestricted maintenance and no match requirements for deferred maintenance for an additional twoyears. Flexibility for school districts to reduce their reserves to only one-third of normallyrequired levels was also extended to 20 14-15.

The State of California cash flow deficiencies remain a critical issue. The Governor’s proposalincluded a major deferral of school payments, much of that across fiscal years. Instead of theState borrowing to meet its cash needs, the deferred payments cause school districts to borrow.

With the release of the May Revision, the Governor indicated that things had changed in apositive manner since the release of his budget back in January. The unresolved $25 billion gapfrom January had been reduced by $13.4 from cuts to the non-Proposition 98 side of the budget.With improvements to the economy, revenues had increased by $6.6 billion, without thetemporary tax extension. The higher revenues enabled the Governor to reduce the temporary taxpackage down to $4 billion. That meant if the tax extension failed, or didn’t even make it to thevoters, then the impact on the General Fund would be $4 billion. The corresponding loss toProposition 98 would then be $1.6 billion, about 40% of the General Fund loss.

The message from the Governor to school districts was to assume flat funding when budgetingfor 2011-12. However, looking back on the State’s fiscal track record, the Loomis Union SchoolDistrict’s 2011-12 budget was built around the assumption that the Base Revenue Limit per ADAwould be reduced by $330. This decision was based on doubts regarding the sustainability of theState’s fiscal recovery and the uncertainty of the temporary tax extension.

Meanwhile at the local level, negotiations were completed with the Loomis Teachers Associationagreeing to redirect up to $280,000 of the 2009-10 MAA proceeds towards deficit reduction.This enabled the District to rescind all furlough days for 2011-12 with the exception of threecertificated staff development days and three furlough days for administrative and confidentialemployees. No other previous year’s budget reductions were restored.

3

Due to the power of Proposition 25, the simple majority-vote budget, the Governor delivered thebudget on-time and signed the State Budget Act on June 30, 2011. At the May Revision,Governor Brown forecasted flat revenues for 201 1-12 with conditions. The enacted Budgetrepresented flat funding, but with conditions.

Flat funding was one of the few constants carried forward from the May Revision into theenacted 2011-12 Budget. The following are major changes that occurred in the relatively shortperiod between the May Revision and June 3OtI:

May Revision State Budget

Funded Proposition 98 at the minimum, Takes away $2.1 billion from K-12without suspension. education through a sales tax shift and

reallocates those funds to other areas of theBudget without suspension.

Proposed $2.5 billion to “pay down” Defers approximately $2.1 billion ofProposition 98 deferrals. payments to schools.

Counted on $9.6 billion in temporary Assumes $4 billion more in General Fundtaxes. revenues above the May forecast.

Did not include “trigger cuts” to education, K- 12 is at risk of losing $1.9 billion byjust the threat of additional cuts. triggering a cut if revenues fall short of

projections.

Contained no additional flexibility provisions. Allows automatic reductions to the schoolyear if triggered cuts are made; however,reductions are still subject to collectivebargaining.

Contained no language that restricted local Places several requirements on the fundingbudgeting practices and fiscal oversight level school districts must budget andsafeguards. staffing levels that must be met in 2011-12

and suspends various AB 1200 provisions.

Proposition 98 establishes a constitutional minimum funding guarantee for K-14 education basedon changes in workload (ADA) and inflation (either the change in per-capita General Fundrevenues or per-capita personal income). The Legislature is authorized to appropriate less thanthe minimum guarantee if two-thirds of the members from each house vote for the suspension.For the first time since Proposition 98 was adopted in 1988, the Legislature enacted a StateBudget that funded K- 14 education below the minimum guarantee without voting to suspendProposition 98.

4

The State Budget includes an additional deferral of @2.1 billion for K- 12 school districts as partof the State’s cash management plan. The latest addition brings the total amount of fundingdelayed from 201 1-12 to 20 12-13 at $9.44 billion, or approximately 38.4% of the District’s StateAid. In other words, the District is obligated to use 3 8.4% of its State Aid to provide the Statewith an interest free loan. The District is still required to meet its own cash flow needs and thisis accomplished through issuing Tax and Revenue Anticipation Notes (TRANS) to cover itsprojected cash flow deficits.

The State Budget is built around the assumption that revenues will be up $4 billion over the MayRevision projections. If those revenues do not materialize, then “trigger cuts” will automatically

be imposed.

By December 15, 2011, the Director of Finance is required to determine if revenues are comingin as projected or are falling short. The higher of either the Legislative Analyst’s Office (LAO)November 2011 forecast or the Department of Finance’s December forecast will be used. Ifrevenues come in lower than anticipated, then spending reductions are implemented as of January

1, 2012 in the following order:

Less than $1 billion below the forecast: No changes are required.

$1 billion to $2 billion below forecast: $23 million across-the-board cut to childcare.

$30 million cut to community colleges witha $10 increase to student enrollment fees.

Reductions to other state-funded programs,including higher education, totaling $548million.

More than $2 billion below forecast: All previous reductions are implemented,plus,

Up to a 4% reduction to revenue limits, 1.5billion.

4% if revenues fall $4 billion ormore; prorated down if revenue lossis between $2 billion to $4 billion.

$248 million cut to school transportation.

$72 million cut to community colleges.

If the full revenue limit reduction is imposed, the average maximum cut would be approximately

$250 per ADA, or $546,168 to the Loomis Union School District. However, school districts are

prohibited from budgeting for these projected reductions.

5

If revenues come up short by more than $2 billion, the Districts are authorized to reduce the2011-12 school year by up to seven days. These seven days are in addition to the five daysalready allowed by current statute. This provision would not go into effect until February 1,2012. The shorter school year provision is also subject to collective bargaining and must beimplemented by the end of the 2011-12 school year in order to capture savings.

AB 114 directs school districts on how to budget for 2011-12. For the 2011-12 fiscal year only,school districts shall project the same level of revenue per ADA as received in 2010-11 and shallmaintain staffing and program levels commensurate with that level of funding.

AB 114 also specified that Multi-Year Projections (MYP) are not to be considered by the Countyof Education (CUE) when approving district budgets. MYPs are still required to be submitted bydistrict and evaluated by CUEs for interim reports.

COMPARISON OF THE SECOND INTERIM REPORT TO THEUNAUIMTED ACTUALS

The District’s 20 10-1 1 Second Interim Report, which provided a financial snapshot as of January3 1st, projected the ending fund balance would increase by $331,170. This increase was thecombined total of a projected decrease to the Unrestricted fund balance of $11,265 and aprojected increase to the Restricted fund balance of $342,435. The Second Interim Reportprojected balances were based on the most current financial information received from the Stateand other sources at that time and assumed all expenditures would be made in accordance withestablished budgets.

The District’s 2010-1 1 Unaudited Actuals reflect an increase to the ending balance of $550,221,the combined total of an increase of $506,879 to the Unrestricted fund balance and an increase of$43,342 to the Restricted fund balance.

Unrestricted Recap:

Both revenues and expenditures decreased between the Second Interim Report’s projected yeartotals and the Unaudited Actuals. Revenue decreased by $463,703 and expenditures decreasedby $685,753. The largest decreases were in Federal revenues, $342,872, and Books andSupplies, $481,826. Contributions to Restricted Sources also decreased by $135,483.

Restricted Recap:

Federal Revenues decreased by $353,160 between the Second Interim Report and the UnauditedActuals. There were corresponding expenditures decreases of $53,364 and $156,104 in Booksand Supplies and Contracted Services, respectively. Contributions from Unrestricted Sourcesdecreased by $135,483.

6

Analysis:

The following is a detailed analysis that supports the material variances between the SecondInterim Report and the Unaudited Actuals:

1. The final calculation of the District’s Revenue Limit Sources resulted in an increase of$126,872. This increase is supported by the addition of 11.87 ADA based on theDistrict’s P-2 attendance reporting and final adjustments made to the In Lieu of PropertyTax transfer to the Loomis Basin Charter School. The remaining differences areattributed to minor changes in County ADA, unemployment expenditures, and the PERSRevenue Limit Reduction.

Restricted Revenue Limit Sources increased $18,669 from Special Education PropertyTransfers.

2. Federal Revenues decreased between the Second Interim Report and Unaudited Actualsby $6,074.

UnauditedProgram 2’ Interim Actuals Difference

PL94-l42 $258,340 $258,376 $ 36ARRA-IDEA 110,480 116,378 5,898Preschool Grants 41,380 40,797 (583)ARRA-Preschool 40,367 41,346 979Title I 204,9 1 1 164,587 (40,324)ARRA-SFSF -0- 106,888 106,888Jobs Bill 404,737 -0- (404,737)Drug Free Schools 5,320 -0- (5,320)Title II, Tchr Qual 75,670 55,185 (20,485)Title II, Tech 1,540 2,933 1,393ARRA-Title II -0- 3,095 3,095MAA 400,143 57,271 (342,872)

Total $1,542,888 $846,856 $(696,032)

The above comparison reveals that Unaudited Actuals are understated by $813,738 due toDeferred Revenue entries applied to Title I, Jobs Bill, Drug Free School, Title II TeacherQuality and MAA. Please note that the differences on the above exhibit do not correlateexactly to the corresponding Deferred Revenue amounts below. The differences are dueto changes in revenues between the 2’ Interim Report and the Unaudited Actuals.Deferred Revenue entries account for revenue received, but unearned, which is then setup as a liability to be included in the subsequent year’s revenue for the same program.

Decreases to Federal revenue were partially offset by the inclusion of the District’s final

ten percent of ARRA-SFSF funding and minor revenue adjustments among otherprograms.

7

Summary of Federal Deferred Revenue:

Jobs Bill 418,899Titlel 41,311Drug Free Schools 3,870Title II Teacher Quality 20,523Title II Technology 589MAA 540,709

Total Federal Deferred Revenue $1,025,901

3. State Revenues decreased $36,238 from the Second Interim Report to the UnauditedActuals.

UnauditedProgram 2 Interim Actuals Difference

Hourly Programs $ 47,548 $ 41,774 $ (5,774)Econ Impact Aid 59,779 59,779Mandated Costs 100,879 100,879 -0-K-3 CSR 661,753 699,363 37,610Lottery 247,613 249,259 1,646Lottery: InstMtls 41,376 41,187 (189)Oral Health 2,849 -0- (2,849)Testing 11,906 773 (11,133)Special Ed 10,648 10,648 -0-GATE* 14,095 15,612 1,517IMF* 126,260 127,614 1,354PElncentive* 117,395 117,441 46PAAR* 7,580 9,802 2,222Staff Development* 12,024 13,031 1,007Prof Dev Grant* 124,243 124,290 47Instr Improve* 112,426 112,469 43School&Library* 212,057 212,138 81School Safety* 11,486 23,978 12,492Counseling* 43,624 42,960 (664)Art&Music* 33,826 33,839 13Mental Health 1,532 14,383 12,851TUPE 7,737 4,577 (3,160)Deferred Maint.* 83,398 -0- (83,398)

Total $2,092,034 $2,033,059 ($36,238)

8

K-3 CSR increased due to less penalties being generated than anticipated on the finalcalculation of class sizes. This increase is offset by Deferred Revenue entries for OralHealth. Testing, Supplemental Hours, TUPE and Deferred Maintenance. Just like theFederal revenues, Deferred Revenues do not line up exactly because of revenueadjustments between the 2 Interim Report and the Unaudited Actuals.

Summary of State Deferred Revenue:

Oral Health $ 3,146Testing 12,402Supplemental Hours 24,625Tobacco Use and Prevention Education 3,160Deferred Maintenance 85,756

Total State Deferred Revenue $129,089

State programs designated with an * were moved to Unrestricted.

Some categorical programs are not subject to the Deferred Revenue adjustment. Unspentmonies are carried forward into the subsequent fiscal year as a Legally RestrictedBalance.

Summary of Legally Restricted Balances:

Lottery: Instructional Materials $ 61,351Economic Impact Aid (ETA) 44,293

Total Legally Restricted Balances $105,644

4. Local Revenues ended the year $47,443 higher then reported on Second Interim Report.

Revenue from the facility use program decreased by $54,487 due to a Deferred Revenueentry.

Interest income decreased $31,898 because of lower returns from invested capital.

Other fees decreased by $31,815 as a result of lower than anticipated collections from theSombrero Time Spanish program and a Deferred Revenue entry applied against theMedicare earnings.

Local Income increased by $115,931 due to increased fundraising activity that waspreviously unbudgeted.

Special Education revenues increased by $48,260.

The remaining difference is attributable to minor adjustments regarding redevelopmentfunding and sales.

9

5. Interfund Transfers-In reflect a slight increase of $1,104 generated from a sweep of theDeferred Maintenance Fund’s ending fund balance.

6. Other Sources were increased by $93,148 to account for the revenue side of the debtservice transaction associated with the lighting retrofit project. An offsetting entry of$93,148 was set-up as an expenditure under Capital Outlay.

7. Contributions to Restricted Programs decreased by $135,483. No Special Educationtransportation biliback and increases to the District’s Special Education apportionmentreduced the amount of Unrestricted General Fund support by $173,328. However, thisdecrease was netted against an increased contribution to the Maintenance Department of$37,845.

8. Total Unaudited Actual expenditures decreased by $682,753. Books and Supplies andServices and Other Operating Expenditures experienced the largest declines. Thesedeclines are tied to unspent programs such as Title I, MAA, Medicare, etc. CapitalOutlay increased from the debt service entry that was required to properly account for thelighting retrofit project. Other Outgo was also increased to account for the initial debtservice payments associated with the lighting retrofit project.

COMPARISON OF FINANCIAL DATA

The Statement of Net Assets for fiscal year 2010-11 is the ninth year the District has accountedfor the value of fixed assets and included these values as part of financial statements. The valueof all assets including buildings, land and equipment is disclosed. Depreciation is included. Thetable below summarizes the value of District assets.

Land is accounted for at purchase value, not market value, and is not depreciated. Many of theschool sites have low values for today’s market because the district acquired the land many yearsago. The value of school buildings is the estimated historical cost less depreciation. For newerbuildings, the value is the construction cost less depreciation.

Statement of Net AssetsJune3O,2010 June3O,2011

Assets $30,493,724 $31,771,956

Liabilities $19,780,745 $19,954,906

Ending Net Assets $10,712,977 $11,817,050

GASB Codification Section N2200. 101

Commencing fiscal year 2002-03, the District is subject to additional reporting requirementsunder GASB Codification Section (GASB Cod. Sec.) N2200.101, Comprehensive AnnualFinancial Reports. GASB Cod. Sec. N2200. 101 continues a long standing trend seeking to alterpublic agency financial statements and reporting requirements to more closely conform to privateindustry.

The current State software package which produces a number of required forms and statements,also produces all of the required GASB Cod. Sec. N2200-101 forms and statements.

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OVERVIEW OF THE GASB COD. SEC. N2200-1O1 FINANCIALSTATEMENTS

The GASB 34 Cod. Sec. N2200-1 01 annual report consists of three parts—management’sdiscussion and analysis (this memo), the basic financial statements, and required supplementaryinformation. The basic financial statements include two kinds of statements that present differentviews of the District:

• District-wide financial statements that provide both short-term and long-term information

about the District’s overall financial status.

• Fund financial statements that focus on individual parts of the District, reporting theDistrict’s operations in more detail than the district-wide statements.

• The governmental funds statements tell how basic services like regular and special

education were financed in the short term as well as what remains for future spending.

• Governmental activities—Most of the District’s basic services are included here, such as

regular and special education, transportation, and administration. Property taxes and state

formula aid finance most of these activities.

Governmental funds—Most of the District’s basic services are included in governmental funds,

which generally focus on (1) how cash and other financial assets can readily be converted to cash

flow in and out and (2) the balances left at year-end that are available for spending.

Consequently, the governmental funds statements provide a detailed short-term view that helps

determine whether there are more or fewer financial resources that can be spent in the near future

to finance the District’s programs. Because this information does not encompass the additional

long-term focus of the district-wide statements, additional information at the bottom of the

governmental funds statements explain the relationship (or differences) between them.

Fund Financial Statements

The fund financial statements provide more detailed information about the District’s most

significant funds—not the District as a whole. Funds are accounting devices the District uses to

keep track of specific sources of funding and spending on particular programs:

• Some funds are required by State law and by bond covenants.• The District establishes other funds to control and manage money for particular purposes

(e.g. repaying its long-term debts) or to show that it is properly using certain revenues

(e.g. Developer Fees).

District-wide Statements

The district-wide statements report information about the District as a whole using accounting

methods similar to those used by private-sector companies. The statement of net assets includes

all of the District’s assets and liabilities. All of the current year’s revenues and expenses are

accounted for in the statement of activities regardless of when cash is received or paid.

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The two district-wide statements report the District’s net assets and how they have changed. Netassets—the difference between the District’s assets and liabilities—is one way to measure theDistrict’s financial health or position. Over time, increases or decreases in the District’s netassets are an indicator of whether its financial position is improving or deteriorating,

respectively.

COMPONENTS OF THE JUNE 30, 2011 ENDING GENERAL FUND BALANCE

I Components of Fund Balance June 30, 2011

Revolving Cash $2,000Prepaid Expenditures (Health Benefits) $109,521

Legally Restricted Balances $105,644

Designated for Economic Uncertainties, 4% $644,880

Board Assignments $2,382,693Assigned for Postemployment Benefits $152,011

Total Ending General Fund Balance June 30, 2011 $3,396,749

ANALYSIS OF THE EFFECT OF POSITIVE/DEFICIT SPENDING ON FUNDBALANCE

I Effect of Positive/Deficit Spending on Fund Balance ITotal Beginning General Fund Balance July 1, 2010 $2,540,923

2010-11 General Fund “Actuals” $855,826

Total Ending General Fund Balance June 30, 2011 $3,396,749

Current Estimate of 201 1-12 General Fund Net Increase (Decrease) ($896,228)

Total Estimated Ending General Fund Balance June 30, 2012 $2,500,521

NET INCREASE (DECREASE) IN THE GENERAL FUND BALANCE

The District ended 2010-11 with a net increase to fund balance of $855,826, of which $812,484

was Unrestricted and $43,342 was Restricted. The Unrestricted increase was supported from

unspent program expenditure line items such as MAA that will be carried forward into

subsequent years for expenditure or used to offset deficit spending. The increase to the Legally

Restricted Ending Fund Balance is generated from unspent Lottery: Instructional Materials and

Economic Impact Aid.

The District currently maintains an adequate fund balance that will offset deficit spending in the

short-term. However, in order to preserve jobs, maintain educational programs, and withstand

additional mid-year cuts from the State, the District needs to make every effort to safeguard its

reserves. Spending down reserves is no more than a one-time solution for an ongoing problem.

To maintain an adequate reserve, the District needs to continue its focus on carefully allocating

its scarce resources.

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LISTING OF CATEGORICAL PROGRAMS WITH LEGALLY RESTRICTEDBALANCES

The District has received categorical funding in several programs not subject to deferredrevenue. This results in a “Legally Restricted Balance” and has the effect of reducingexpenditures in 2010-1 1 and increasing expenditures in 2011-12. Significant historicalcarryovers include:

Components of Restricted Ending Fund Balance2006-07 2007-08 2008-09 2009-10 2010-11

ARRA: State Fiscal Stabilization Fund $771,608Arts and Music Block Grant $34,378 $69,960Arts, Music, and Phy Ed Supplies/Equip $174,353 $157,047Discretionary Block Grant-District $25,839Discretionary Block Grant-School Site $122,737 $62,541Economic ImpactAid $15,430 $22,514 $39,702 $38,864 $44,293

Instructional & Library Materials, Ed Tech $26,033K-12 IMPRF (Textbooks) $256,143 $157,324Lottery - Instructional Materials $30,422 $24,676 $23,438 $61,351

Peer Assistance and Review $569 $536Physical Education Teacher Incentive Grant $177,655Professional Development Block Grant $46,016Routine Restricted Maintenance $85,711 $86,798

School Library Improvement Grant $27,715 $6,714

School Safety $16,517 $17,733Special Education $21,220 $26,904

Supplemental School Counseling $27,904 $55,335Targeted Instructional Improvement Grant $21,753Transportation — Special Education $12,562

Total $864,971 $946,068 $811,310 $62,302 $105,644

Carryover balances, as listed above, may produce swings in Fund Balance and positive/deficitspending from year-to-year. However, as existing Restricted Balances are spent down, and

considering that most of the categorical programs were moved to Unrestricted, the level of

Restricted Balances has decreased significantly over past years.

ANALYSIS OF FINANCIAL POSITION OF THE GENERAL FUND

Financial Condition of General Fund

The Loomis Union School District ended 2010-11 increasing fund balance by $855,826. This isthe first time since 2007-08 the District has not ended the year deficit spending. However,2011-12 is projected once again to end with adeficit spending level of $1,047,167. The Districthas adequate reserves to offset the 2011-12 deficit, but ongoing deficits in future years willquickly erode any remaining reserve levels. The following table summarizes the General Fundfinancial statements:

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Summary of Financial OperationsJune 30, 2010 June 30,2011

Revenues $ 14,778,871 $ 16,184,670

Expenditures S 20,976,736 $ 16,155,275Interfund TransfersIn/(Out) S 1 10,573 S 32,646

Other FinancingSources/(Uses) $ 5,155,000 $ 793,785

Difference $ (932,292) S 855,826

ANALYSIS OF BALANCES OF INDIVIDUAL FUNDS

CHARTER SCHOOL SPECIAL REVENUE FUND #09

The Loomis Basin Charter School (LBCS) began operations in 2008-09 by offering a K-4

educational program for approximately 185 students. The school consisted of two classrooms

per grade level through grade 3, and one classroom at grade 4. In 2009-10 the school added a

second 4th grade class, two 5th grade classes and a bathroom unit. 20 10-1 1 followed with two 6th

grade classrooms, a staff room and a fire line.

Each new grade level brings in approximately 50 additional students. 2010-11 LBCS enrollment

was at 310 students which equated to 299.14 ADA, or a 96.50% attendance rate. Increased ADA

equates to increased revenue. The 20 10-11 General Block Grant, which is the charter school’s

version of the General Fund’s Revenue Limit, increased by $267,642 over 2009-10. Charter

school funding is experiencing the same level of revenue deficits as the General Fund.

The Federal Public School Charter School Grant expired on August 14, 2010. The final $18,142

was expended in accordance with the grant’s guidelines. Federal Jobs Bill funding of $47,263

was deferred until 2011-12 for expenditure.

State Revenues grew due to the charter school Categorical Block Grant increasing by $41,945

from additional ADA and nominal improvements coming from both K-3 Class Size Reduction

and the Lottery.

Local Revenues increased by $1,325 from fund raising activities.

Salaries and benefits increased as 2.00 FTE of certificated services and 0.88 FTh of classified

services were hired to support the two additional 6 grade classrooms and associated support

programs.

Books and Supplies expenses continue to decrease year-over-year as start-up obligations are

satisfied and the Federal Public School Charter School Grant has ended.

Services and Other Operating Expenditures increased as ongoing expenses such as utilities,

insurance, leases, maintenance and repairs increase.

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Capital Outlay expenses increased over the prior year due to Phase 111 construction costs. ThePhase III project included pulling in a fire line from Laird Road.

Other Outgo (including Transfers of Indirect Costs) represent the school’s second of eight debt

service payments related to the construction start-up loan.

Transfers of Indirect Costs to the District’s Unrestricted General Fund decrease of $40,808 is

reflective of the District’s indirect cost rate decreasing from 5.28% in 2009-10 to 2.22% in 2010-

11. The District’s indirect cost rate increases back up to 5.39% for 2011-12.

LBCS closed the 2010-11 fiscal year deficit spending at $22,127. Although it’s still a deficit,

2010-11 contrasts favorable with the prior year’s deficit spending level of $117,362. The State’s

ongoing deficit of the school’s block grant doesn’t help matters any; however, the primary factor

behind the deficit spending are the school’s grade-level expansion construction costs. Other than

the first year of construction, which was financed, the charter school is funding each subsequent

year’s construction on a pay-as-you-go basis. The final construction phase will take place in

2011-12.

The charter school ended with a fund balance of $232,001, or 11.99% of its expenditure budget.

While the reserve is adequate, it needs to be closely monitored in light of the State’s ongoing

financial crises and future construction expenses.

CAFETERIA FUND #13

The District initiated a food service program effective July 1, 2002, by applying for and becoming

an approved food service authority. The District’s program is a part of the National School Lunch

program. The Cafeteria Fund incurred significant start-up costs during 2002-03 and 2003-04, and

then ran in the red through 2006-07, accumulating a negative fund balance of $226,705. 2007-08

marked the first year the Cafeteria Fund broke into the black, generating a net profit of $7,532.

2008-09 closed with a net profit of $34,485. Two consecutive years of generating a profit reduced

the Cafeteria Fund’s negative fund balance to $184,688. The Board of Trustees chose to transfer

the General Fund food service reserve of $184,688 into the Cafeteria Fund and zero out the

negative fund balance. This loan to the Cafeteria Fund will be paid back to the General Fund as

finances permit.

The Cafeteria Fund concluded 2010-11 with revenues exceeding expenditures by $29,211. The net

profit would have been greater except additional consultant costs were expended to help the

program through its State initiated Coordinated Compliance Review (CCR). The District’s

cafeteria program passed with only minimal corrections and no financial penalties.

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Actual Actual Actual Actual Actual Actual Actual Actual BudgetFYO3-04 FYO4-05 FYO5-06 FY06-07 FYO7-08 FYO8-09 FYO9-10 FY 10-11 FY 11-12

Revenues $464,298 $509,404 $518,717 $569,312 $411,729 $422,891 $449,370 $439,317 $429,545

Expenditures 524,820 548,635 542,449 621,912 404,196 388,407 430,076 410,106 429,441

EndingRaiance $(60,522) $(39,231) $(23,732) $(52,600) $ 7,532 $ 34,485 $ 19,294 $ 29,211 $ 104

Transfers In 0 0 0 0 0 0 184,688 0 0

CumulativeProgram Balance $(1 11,142) $(150,373) $(174,105) $(226,705) $(219,173) $(184,688) $ 19,294 $ 48,505 $48,609

2006-07 is the benchmark year in terms of revenue generated and participation, but not profitability.

Revenues were booked at $569,312, with 157,837 meals being served for a daily average of 876.87.

Participation

2006-07 2007-08 2008-09 2009-10 2010-11

Total Meals Served 157,837 135,621 137,802 139,204 142,481

Daily Average 876.87 753.45 765.57 786.46 814.18

The program’s goal is to regain the participation rates of 2006-07 while improving efficiencies and

cost controls.

DEFERRED MAINTENANCE FUND #14

The Deferred Maintenance Fund was used to perform State approved major deferred maintenance

within the District. The State’s budget flexibility initiative authorized school districts to

discontinue their General Fund contribution to the Deferred Maintenance Fund, and to sweep the

remaining Deferred Maintenance Fund’s ending balance back into the General Fund. Loomis

Union School District took advantage of this initiative and swept the Deferred Maintenance Fund’s

balance into the General Fund. All that remains is residual interest earnings of $185.

PUPIL TRANSPORTATION EQUIPMENT FUND #15

The Pupil Transportation Equipment Fund was created as a by-product of the consolidation with the

Penryn Elementary School District. Penryn operated their own transportation program and this was

a residual balance lefi over from their operations. This fund’s June 30, 2011 ending fund balance

was $58,849.

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SPECIAL RESERVE FUND FOR POSTEMPLOYMENT BENEFITS FUND #20

The Special Reserve Fund for Postemployment Benefits was established to accumulate fundtransfers from the General Fund to address the unfunded postemployment liability. Based on theDistrict’s latest actuarial study, dated April 3, 2009, the District’s unfunded liability is$2,008,162. Historically, the District has managed postemployment benefits on a pay-as-you-gobasis, which is one of the accepted options under GASB 45. In an effort to manage this liability,the District transferred $25,000 per year from the General Fund into the Postretirement BenefitsFund. The transfer was discontinued in 2008-09. In 2010-11, $242,548 was transferred out ofthis fund and into the General Fund to help mitigate the budget deficit. An additional $150,939is slated for transfer into the General Fund during 2011-12. This fund’s ending fund balance asof June 30, 2011 was $152,011. This fund is included in the General Fund for financial reportingpurposes.

CAPITAL FACILITIES FUND #25

State law has authorized the collection of developer fees since 1986 to assist school districts withthe mitigation of facility costs related to enrollment growth. Loomis Union School Districtcollects these fees in conjunction with Placer Union High School District, with each Districtreceiving a percentage of the fees. 20 10-1 1 saw Developer Fee collections continue theirdownward trend as the housing market remains stagnant. The District collected $160,817 in feesfor 2010-11

Developer Fees Collections

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

$743,830 $669,493 $397,727 $240,326 $182,769 $160,817

The Capital Facilities Fund was supposed to service the debt obligation related to the Certificatesof Participation (COP). However, with the annual COP debt service payment at approximately$525,000, the Capital Facilities Fund no longer has sufficient resources to make the payment,which now falls on the General Fund. The fund’s ending balance at June 30, 2011 was $46,863.

BOND INTEREST AND REDEMPTION FUND #51

The Bond Interest and Redemption Fund is used to account for tax collections, interest and othersources of revenue collected to retire General Obligation Bonds issued. The Bond Interest andRedemption Fund remains open for the life of the outstanding General Obligation Bonds.

This fund is maintained by the County Auditor’s Office which is responsible for tax collectionsnecessary for debt repayment and the actual debt repayment. The County Auditor sets theapplicable tax rates, not the District. However, since the General Obligation Bonds are issued bythe District, this fund is included with the District’s financial statements. The June 30, 2011ending fund balance was $639,781.

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ANALYSIS OF THE 2011-12 ADOPTED BUDGET

1. Based on the May Revise, a 2.24% COLA was applied to the District’s Base RevenueLimit per ADA.

2010-11 Base Revenue Limit per ADA $6,[email protected]% 138.172011-12 Meals for Needy & Beginning Teacher 36.392011-12 Base Revenue Limit per ADA $6,343.03

2. 19.754% deficit was applied to the District’s Revenue Limit.

3. The May Revise is predicated on the assumption that lawmakers will pass a budget thatincludes the tax extension ballot measure. Since this assumption is still uncertain at thistime, an additional $330 per ADA was deducted from the revenue limit calculation.

4. District ADA is projected to decline by seven students in 2011-12. ADA, which is basedon the prior year’s P-2 report, and includes County Special Ed and Community DaySchool ADA, is projected at 2,186.74. This is down 15.66 from the prior year.

5. The Federal Jobs Bill funding of $404,737 is supporting 6.50 FTE of certificated teachingpositions. This is a one-time funding source.

6. Unrestricted Lottery is budgeted at $111.00 per 20 10-1 1 P-3 (Annual) ADA. RestrictedLottery (Prop 20) is budgeted at $17.50 per 2010-11 P-3 (Annual) ADA. In accordancewith the Board’s directive, lottery funds are expended the fiscal year after receipt.

7. K-3 Class Size Reduction is budgeted at $1,071 per projected K-3 student. Penalties of30% are assumed for all classes.

8. FY 2011-12 Special Education funding is projected at $780,127.

9. MAA revenue of $324,816 is directed towards relieving the size of the deficit.

10. No funding anticipated for Mandated Cost claims.

11. Interest revenue was reduced from $60,000 to $40,000 to better reflect cash deferrals andlower interest earnings generated by the Placer County Treasurer’s Office.

12. Step and colunm increases were budgeted for certificated employees. Salaries wereadjusted to reflect three days of negotiated contract day reductions.

2011-12 staffing levels remain consistent with 2010-11 at 105.1 FTEs. At this time thereare no retirements.

18

13. Step increases and longevity were reinstated for classified employees per the negotiatedagreement. No further staff reductions were implemented for 20 11-12.

Classified staffing levels increased from 48.04 FTEs to 49.17 FTEs to account foradditional Special Education support.

14. Certificated administration, supervisors and confidential employees’ salaries wereadjusted down for three contract day reductions.

15. Statutory payroll costs are included for all employees as applicable.

16. Each expenditure budget line item was analyzed and adjusted to reflect actual projectedoperations.

All department budgets continue in 20 11-12 with 22.6% reductions.

No previous reductions were reinstated.

17. The estimated Special Education program billback was budgeted at $347,515.

18. The entire COP payment budgeted as an expenditure; no reserve set aside.

19. $150,939 from the Postretirement Reserve was transferred into the General Fund tocontribute against the deficit.

SIGNIFICANT ACTIVITY OF CAPITAL ASSETS AND LONG-TERMLIABILITIES

Capital Assets

The following categories of Capital Assets increased or (decreased) during 2010-11.

Land and land improvement values remained the same at $1,152,572 and $3,701,577respectively.

Buildings increased from $28,302,278 to $29,440,617, an increase of $1,138,339. The followingprojects were capitalized in 20 10-11: Franklin Elementary School lighting and energy retrofit,$274,966; Placer Elementary HVAC and energy retrofit, $517,506; District lighting retrofit,$93,148; and the Loomis Basin Charter School Phase III project at $252,719.

Loomis Union School District Equipment values stayed static at $732,732.

Work-in-Progress represents the addition of $28,511 for the Phase IV charter schoolconstruction. This addition was offset by decreases of $84,458 for the completion of the Franklinand Placer Elementary School’s lighting, HVAC and energy retrofit project. Work-in-Progresswas further reduced by $35,432 for the completion of the Phase III charter school project.

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Land $ -0-Land Improvements $ -0-Buildings $ 1,138,339Equipment $ -0-Work-in-Progress $ (91,379)

Totals, at cost $ 1,046,960

Long-Term Liabilities

The following categories of Long-Term Liabilities were (increased) or decreased during 2010-11.

Certificates of Participation $ 420,000Capitalized Lease Obligations $ (648,649)General Obligation Bonds $ 380,000Post-retirement healthcare benefits $ (116,471)Early Retirement $ (4,745)Compensated absences $ 6,554

Totals $ 46,179

DISCUSSION OF KNOWN FACTS AT THE TIME OF THE AUDIT

• The Board approved the final phase of the charter school construction project which addstwo new grade classrooms with one classroom set-up as a science lab, and two newgrade classrooms that are designated for use in the 2012-13 school year.

• The Board of Trustees approved the issuance of a Tax and Revenue Anticipation Note for2010-11.

This financial report is designed to provide our citizens, taxpayers, customers, investors, andcreditors with a general overview of the District’s finances and to demonstrate the District’saccountability for the funds it receives. If there are any questions about this report, or there is aneed for additional information, contact the Superintendent, Loomis Union School District, 3290Humphrey Road, Loomis, CA.95650, 916-652-1800.

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June 30, 2011

ASSETS

Cash and investments (Note 2)Accounts receivablePrepaid expendituresOther current assetsNon-depreciable capital assetsDepreciable capital assets, net of accumulated

depreciation (Note 4)

Total assets

GovernmentalActivities

$ 5,693,7743,343,348

109,52135,443

1,771,424

20,818,446

31,771,956

LIABILITIES

Accounts payableTax and Revenue Anticipation Notes (TRAN5) payable

(Note 2)Deferred revenueLong-term liabilities (Note 5):

Due within one yearDue after one year


NET ASSETS

9,614,8571,243,349

958.844



613,040

3,323,846940,972

1,064,56014012488

Invested in capital assets, net of related debtRestricted (Note 6)Unrestricted

21




Net (Expense)Revenues and

Changes inProgram Revenues Net Assets

Charges Operatingfor Grants and Governmental

Expenses Services Contributions Activities

Governmental activities (Note 4):Instruction $ 11,404668 $ 1143,870 $ (10,260,798)

Instruction-related services:Instructional supervision and administration 265,515 97,988 (167,527)

Instructional library, media andtechnology 357,041 (357041)

School site administration 1,290,617 (1,290,617)

Pupil services:Home-to-school transportation 6,438 2,328 (4,110)

Food services 408,448 $ 239,985 193,771 25,308

All other pupil services 336,237 71,696 (264,541)

General administration:Data processing 13,414 (13,414)

All other general administration 1,233,090 21,161 (1,211,929)

Plant services 2,051,153 974 5,850 (2,044,329)

Ancillary services 98,650 (98,650)

Community services 47,085 (47,085)

Interest on long-term liabilities 412,579 (412,579)

Other outgo 423,400 148,357 (275,043)

Total governmental activities $ 18,348,335 $ 240,959 $ 1,685,021 (16,422,355)


Taxes levied for general purposes 8,410,693

Taxes levied for debt service 744,4 1 1

Taxes levied for other specific purposes 10,916

Federal and state aid not restricted to specificpurposes 7,373,328

Interest and investment earnings 73,141

Miscellaneous 913,939


Change in net assets 1,104,073

Net assets, July 1,2010 10,712,977

Net assets, June 30, 2011 $ 11,817,050


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BALANCE SHEET

GOVERNMENTAL FUNDS

June 30, 2011

Charter TotalGeneral Schools Non-Major Governmental

Fund Fund Funds Funds

ASSETS

Cash and investments:CashinCountyTreasury $ 1,792,727 $ (233,668) $ 807,097 $ 2,366,156Collections awaiting deposit 1,597 175 1,772Cash in revolving fund 2,000 2,000

Cash with Fiscal Agent, restricted forTRANs repayment 3,323,846 3,323,846

Accounts receivable 2,750,648 587,054 5,646 3,343,348Prepaid expenditures 109,521 109,521Other current assets 35,443 35.443

Total assets $ 8,015,782 $ 353,386 $ 812,918 $ 9,182,086


Liabilities:Accounts payable $ 429,928 $ 45,672 $ 18,735 $ 494,335

TRANs payable 3,323,846 3,323,846

Deferred revenue 865,259 75,713

___________

940,972

Total liabilities 4,619,033 121,385 18,735 4,759,153

Fund balances:Nonspendable 111,521 111,521

Restricted 105,644 232,001 794,183 1,131,828

Assigned 2,534,704 2,534,704

Unassigned 644,880 644,880

Total fund balances 3,396,749 232,001 794,183 4,422,933

Total liabilities and fund balances $ 8,015,782 $ 353,386 $ 812,918 $ 9,182,086


23


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEETTO THE STATEMENT OF NET ASSETS

June 30, 2011


Amounts reported for governmental activities in thestatement of net assets are different because:

Capital assets used for governmental activities are notfinancial resources and, therefore, are not reported asassets in governmental funds. The cost of the assetsis $35,646,350 and the accumulated depreciation is$13,056,480 (Note 4). 22,589,870

Unmatured interest on long-term liabilities is notrecognized until the period in which it matures and ispaid. In the government-wide statement of activities,it is recognized in the period that it is incurred. (118,705)

Long-term liabilities are not due and payable in thecurrent period and, therefore, are not reported asliabilities in the funds. Long-term liabilities atJune 30, 2011 consisted of (Note 5):

Certificates of Participation $ (4,735,000)General Obligation Bonds (6,520,000)Capital lease obligations (1,720,013)Other postemployment benefits (Note 5 and 8) (2,052,182)Early retirement (13,867)Compensated absences (35,986) (15,077,048)

Total net assets - governmental activities $ 11.817,050


24



GOVERNMENTAL FUNDS


Charter All TotalGeneral Schools Non-Major Governmental

Fund Fund Funds Funds


State apportionment $ 3,875,276 $ 1500,580 $ 5,375,856

Local sources 7,491,466

__________

3800 7,495,266

Total revenue limit 11,366,742 1,500,580 3,800 12,871,122

Federal sources 1,387,566 18,142 178,451 1,584,159

Other state sources 2,055,796 384,892 13,119 2,453,807

Other local sources 1,374,566 9,107 1.159,648 2,543,321

Total revenues 16,184,670 1,912,721 1,355,018 19,452,409

Expenditures:Certificated salaries 7,550,895 819,145 18,247 8,388,287

Classified salaries 2,114,184 123,917 209,078 2,447,179

Employee benefits 2,680,318 210,076 67,973 2,958,367

Books and supplies 548,861 51,215 158,042 758,118

Contract services andoperating expenditures 1,565,965 274,297 54,137 1,894,399

Capital outlay 801,162 245,788 1,046,950

Other outgo 357,850 357,850

Debt service:Principal retirement 430,910 134,226 380,000 945,136

Interest 105,130 44,641 290,115 439,886


Excess (deficiency) of revenuesover (under) expenditures 29,395 9,416 177,426 216.237

Other financing sources (uses):Operating transfers in 32,646 32,646

Operating transfers out (31,542) (1,104) (32,646)

Proceeds from issuance of long-termliabilities 793.785

____________ ____________

793,785

Total other financing sources (uses) 826,431 (31,542) (1.104) 793,785

Net change in fund balances 855,826 (22,126) 176,322 1,010,022

Fund balances, July 1,2010 2,540,923 254.127 617,861 3,412,911

Fund balances, June 30, 2011 $ 3,396,749 $ 232,001 $ 794,183 $ 4,422,933


25





Net change in fund balances - Total Governmental Funds $ 1,010,022

Amounts reported for governmental activities in the statementof activities are different because:

Acquisition of capital assets is an expenditure in thegovernmental funds, but increases capital assets inthe statement of net assets (Note 4), $ 1,046,960


Debt proceeds from other financing sources are reportedin the government-wide financial statements, but not in thegovernmental funds (Note 5). (793,785)

Repayment of principal on long-term liabilities is anexpenditure in the governmental funds, but decreasesthe long-term liabilities in the statement of net assets(Note 5). 945136

Interest on long-term liabilities is recognized in the periodit is incurred, in governmental funds it is only recognizedwhen it is due. 27304

In the statement of activities, expenses related to otherpostemployment benefits and early retirement incentives aremeasured in relation to the annual required contribution.In the governmental funds, expenditures are recognizedwhen employer contributions are made (Note 5). (111,726)

In the statement of activities, expenses related to compensated absences are measured by the amounts earnedduring the year. In the governmental funds, expendituresare measured by the amount of financial resources used(Note 5). 6,554 94,051

Change in net assets of governmental activities $ 1,104,073


26



SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Loomis Union School District (the ‘District’) accounts for its financial transactions inaccordance with the policies and procedures of the California Department of Education’sCalifornia School Accounting Manual. The accounting policies of the District conform toaccounting principles generally accepted in the United States of America as prescribedby the Governmental Accounting Standards Board. The following is a summary of themore significant policies.

Reporting Entity

The Board of Trustees is the level of government which has governance responsibilities over all activities related to public elementary school education in the District.The Board is not included in any other governmental “reporting entity” as defined by theGovernmental Accounting Standards Board since Board members have decision-making authority, the power to designate management, the responsibility to significantlyinfluence operations and primary accountability for fiscal matters. The District receivesfunding from local, state and federal governmental sources and must comply with all therequirements of these funding source entities.

In 2000, certain members of the District’s Board of Trustees and District employeesformed a nonprofit benefit corporation, known as Loomis Union School DistrictFinancing Corporation (“Corporation”), which is organized under Nonprofit BenefitCorporation Law of the State of California. The purpose of the Corporation is to financethe acquisition and construction of school facilities. The Corporation issued Certificatesof Participation (COPs), a form of long-term liabilities, which the District used to financeconstruction of school facilities.

On July 1, 2008, the District began operation of Loomis Basin Charter School (the“Charter School”). The Charter School is sponsored by the District which acts as anoversight agency. The funding is received by the District and is passed through to theCharter School. The Charter School’s activity is included within the District’s financialstatements as the Charter Schools Fund.


The basic financial statements include a Management’s Discussion and Analysis(MD & A) section providing an analysis of the District’s overall financial position andresults of operations, financial statements prepared using full accrual accounting for allof the District’s activities, including infrastructure, and a change in the fund financialstatements to focus on the major funds.

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The Statement of Net Assets and the Statement of Activities displays information aboutthe reporting government as a whole.


Program revenues: Program revenues included in the Statement of Activities derivedirectly from the program itself or from parties outside the District’s taxpayers orcitizenry, as a whole; program revenues reduce the cost of the function to be financedfrom the District’s general revenues.

Allocation of indirect expenses: The District reports all direct expenses by function inthe Statement of Activities. Direct expenses are those that are clearly identifiable with afunction. Depreciation expense is specifically identified by function and is included inthe direct expense of each function, Interest on long-term liabilities is considered anindirect expense and is reported separately on the Statement of Activities.


The accounts of the District are organized on the basis of funds or account groups, eachof which is considered to be a separate accounting entity. The operations of each fundare accounted for with a separate set of self-balancing accounts that comprise itsassets, liabilities, fund balances, revenues, and expenditures. District resources areallocated to and accounted for in individual funds based upon the purpose for which theyare to be spent and the means by which spending activities are controlled. The District’saccounts are organized into one broad category which includes four fund types, asfollows:


1 - General Fund:

The General Fund is the general operating fund of the District and accountsfor all revenues and expenditures of the District not encompassed withinother funds. All general tax revenues and other receipts that are notallocated by law or contractual agreement to some other fund are accountedfor in this fund. General operating expenditures and the capitalimprovement costs that are not paid through other funds are paid from theGeneral Fund. For financial reporting purposes, the current year activity andyear-end balances of the Special Reserve for Postemployment BenefitsFund is combined with the General Fund.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


A - Governmental Fund Types (Continued)

2 - Special Revenue Funds:

The Special Revenue Funds are used to account for the proceeds ofspecific revenue sources that are legally restricted to expenditures forspecific purposes. This classification includes the Charter Schools,Cafeteria, Deferred Maintenance and the Pupil Transportation Funds.

3 - Capital Projects Funds:

The Capital Projects Funds are used to account for resources used for theacquisition of capital facilities by the District. This classification includes theCapital Facilities Fund.

4 - Debt Service Fund:

The Debt Service Fund is used to account for the accumulation of resourcesfor, and the payment of, general long-term debt principal, interest, andrelated costs. This classification includes the Bond Interest and RedemptionFund.

Basis of Accounting

Basis of accounting refers to when revenues and expenditures or expenses arerecognized in the accounts and reported in the financial statements. Basis ofaccounting relates to the timing of the measurement made, regardless of themeasurement focus applied.

Accrual

Governmental activities in the government-wide financial statements and fiduciary fundfinancial statements are presented on the accrual basis of accounting. Revenues arerecognized when earned and expenses are recognized when incurred.

Modified Accrual

The governmental funds financial statements are presented on the modified accrualbasis of accounting. Under the modified accrual basis of accounting, revenues arerecorded when susceptible to accrual; i.e., both measurable and available. “Available”means collectible in the current period or within 60 days after year end. Expendituresare generally recognized under the modified accrual basis of accounting when therelated liability is incurred. The exception to this general rule is that principal andinterest on general obligation long-term liabilities, if any, is recognized when due.

29





By state law, the Board of Trustees must adopt a final budget by July 1. A publichearing is conducted to receive comments prior to adoption. The Board of Trusteescomplied with these requirements.

The District employs budgetary control by major object code and by individualappropriation accounts. Expenditures cannot legally exceed appropriations by majorobject code. The budgets are revised during the year by the Board of Trustees toprovide for unanticipated revenues and expenditures. The originally adopted and finalrevised budgets for the General Fund and Charter Schools Fund are presented asRequired Supplementary Information.

Capital Assets



Compensated absences benefits in the amount of $35,986 are recorded as a liability ofthe District. The liability is for the earned but unused benefits. The amount to beprovided by future operations represents the total amount that would be required to beprovided from the general operating revenues of the District if all the benefits were to bepaid.


Sick leave benefits are not recognized as liabilities of the District. The District’s policy isto record sick leave as an operating expenditure in the period taken since such benefitsdo not vest nor is payment probable; however, unused sick leave is added to thecreditable service period for calculation of retirement benefits for certain STRS andCaIPERS employees, when the employee retires.

Encumbrances

Encumbrance accounting is used in all budgeted funds to reserve portions of applicableappropriations for which commitments have been made. Encumbrances are recordedfor purchase orders, contracts, and other commitments when they are written.Encumbrances are liquidated when the commitments are paid. All encumbrances areliquidated at June 30.

30




Deferred Revenue

Revenues from federal, state, and local special projects and programs are recognizedwhen qualified expenditures have been incurred. Funds received but not earned arerecorded as deferred revenue until earned.


Restrictions of the ending net assets indicate the portions of net assets not appropriablefor expenditure or amounts legally segregated for a specific future use. The restrictionfor revolving cash fund and prepaid expenditures reflect the portion of net assetsrepresented by revolving fund cash and prepaid expenditures, respectively. Theseamounts are not available for appropriation and expenditure at the balance sheet date.The restriction for unspent categorical program revenues represents the portion of netassets restricted to specific program expenditures. The restriction for special revenuefunds represents the portion of net assets restricted for special purposes. Therestriction for capital projects represents the portion of net assets restricted for capitalprojects. The restriction for debt service represents the portion of net assets availablefor the retirement of the liabilities.


Governmental Accounting Standards Board Codification Sections 1300 and 1800, Fund

Balance Reporting and Governmental Fund Type Definitions (GASB Cod. Sec. 1300

and 1800) implements a five-tier fund balance classification hierarchy that depicts the

extent to which a government is bound by spending constraints imposed on the use of

its resources. The five classifications, discussed in more detail below, are

nonspendable, restricted, committed, assigned and unassigned.


The nonspendable fund balance classification reflects amounts that are not inspendable form, such as revolving fund cash and prepaid expenditures.


The restricted fund balance classification reflects amounts subject to externallyimposed and legally enforceable constraints. Such constraints may be imposedby creditors, grantors, contributors, or laws or regulations of other governments,or may be imposed by law through constitutional provisions or enablinglegislation. These are the same restrictions used to determine restricted netassets as reported in the government-wide statements.

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The committed fund balance classification reflects amounts subject to internalconstraints self-imposed by formal action of the Board of Trustees. Theconstraints giving rise to committed fund balance must be imposed no later thanthe end of the reporting period. The actual amounts may be determinedsubsequent to that date but prior to the issuance of the financial statements.Formal action by the Board of Trustees is required to remove any commitmentfrom any fund balance. At June 30, 2011, the District had no committed fundbalances.

D Assigned Fund Balance:

The assigned fund balance classification reflects amounts that the District’sBoard of Trustees has approved to be used for specific purposes, based on theDistrict’s intent related to those specific purposes. The Board of Trustees candesignate personnel with the authority to assign fund balances, however, as ofJune 30, 2011, no such designation has occurred.




Fund Balance Policy


While GASB Cod. Sec. 1300 and 1800 do not require districts to establish a minimumfund balance policy or a stabilization arrangement, GASB Cod. Sec. 1300 and 1800 dorequire the disclosure of a minimum fund balance policy and stabilization arrangements,if they have been adopted by the Board of Trustees. At June 30, 2011, the District hasnot established a minimum fund balance policy nor has it established a stabilizationarrangement.

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Property Taxes

Secured property taxes are attached as an enforceable lien on property as of March 1.Taxes are due in two installments on December 10 and April 10. Unsecured propertytaxes are due in one installment on or before August 31. The County of Placer bills andcollects taxes for the District. Tax revenues are recognized by the District whenreceived.


In the process of aggregating data for the Statement of Net Assets and the Statement ofActivities, some amounts reported as interfund activity and balances in the funds wereeliminated or reclassified. Interfund receivables and payables were eliminated tominimize the “grossing up” effect on assets and liabilities within the governmentalactivities column.

Estimates

The preparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions. These estimates and assumptions affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements and the reported amounts of revenues and expendituresduring the reporting period. Accordingly, actual results may differ from those estimates.


Cash and investments at June 30, 2011 consisted of the following:

Pooled Funds:Cash in County Treasury $ 2,366,156

Deposits:Collections awaiting deposit 1,772Cash in revolving fund 2,000

Cash with Fiscal Agent, restricted for repaymentof TRANs 3.323,846

Total cash $ 5,693.774

Pooled Funds

In accordance with Education Code Section 41001, the District maintains substantiallyall of its cash in the interest bearing Placer County Treasurer’s Pooled Investment Fund.These pooled funds are carried at cost which approximates fair value. Interest earned isdeposited monthly into participating funds. Any investment losses are proportionatelyshared by all funds in the pool.

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Pooled Funds (Continued)

Because the District’s deposits are maintained in a recognized pooled investment fundunder the care of a third party and the District’s share of the Pool does not consist ofspecific, identifiable investment securities owned by the District, no disclosure of theindividual deposits and investments or related custodial credit risk classifications isrequired.

In accordance with applicable state laws, the Placer County Treasury may invest inderivative securities. However, at June 30, 2011 the Placer County Treasurer hasrepresented that the Treasurer’s pooled investment fund contained no derivatives orother investments with similar risk profiles.

Deposits - Custodial Credit Risk

The District limits custodial credit risk by ensuring uninsured balances are collateralizedby the respective financial institution. Under Section 343 of the Dodd-Frank Wall StreetReform and Consumer Protection Act, interest-bearing cash balances held in banks areinsured up to $250,000 and noninterest-bearing cash balances held in banks are fullyinsured by the Federal Deposit Insurance Corporation (FDIC) and are collateralized bythe respective financial institution. At June 30, 2011, the carrying amount of theDistrict’s accounts was $3,772 and the bank balance was $1,726, all of which wasinsured.

Cash with Fiscal Agent, Restricted for Repayment of TRANs

On September 1, 2010, the District issued $3,300,000 of Tax and Revenue AnticipationNotes (TRANs) maturing on September 1, 2011, with an interest rate of 2.00%, toprovide for anticipated cash flow deficits from operations. The TRANs are a generalobligation of the District and are payable from revenues and cash receipts generated bythe District during the fiscal year ended June 30, 2011. As of June 30, 2011, fundstotaling $3,323,846 held in the General Fund were pledged to repay the TRANs.

Interest Rate Risk


Credit Risk


Concentration of Credit Risk


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Interfund Activity

Transactions between funds of the District for goods and services are recorded asinterfund transfers. The unpaid balances at year end, as a result of such transactions,are shown as due to and due from other funds.


The district did not have any outstanding interfund receivable and payable balances asof June 30, 2011.

Interfund Transfers

Inter-fund transfers consist of operating transfers from funds receiving revenue to fundsthrough which the resources are to be expended.

Inter-fund transfers for the 2010-2011 fiscal year were as follows:

Transfer from the Charter Schools Fund to the General Fundfor indirect costs and management fees. $ 31,542

Transfer from the Deferred Maintenance Fund to the GeneralFund to transfer fund balance for unrestricted programs. 1 104

32,646

4. CAPITAL ASSETS

Balance Transfers Transfers BalanceJulyl, and and June30,2010 Additions Deductions 2011

Non-depreciable:Land $ 1,152,572 $ 1,152,572Work-in-progress 710,231 $ 28,511 $ 119,890 618,852

Depreciable:Buildings 28,302,278 1,138,339 29,440,617Equipment 732,732 732,732Improvement of sites 3,701,577 3,701,577

Totals, at cost 34,599,390 1.166,850 119,890 35,646350

Less accumulated depreciation:Buildings (10,603,751) (823,776) (11,427,527)Equipment (584,426) (35,200) (619,626)Improvement of sites (841,911) (167,416) (1,009,327)

Total accumulated depreciation (12,030,088) (1 02692)

___________

(13,056,480)

Capital assets, net $ 22,569,302 $ 140,458 $ 119,890 $ 22,589,870

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4. CAPITAL ASSETS (Continued)


Instruction $ 687,485Plant services 283,548General administration 55,359

Total depreciation expense $ 1026,392


Certificates of Participation

On October 4, 2000 the District issued $7,000,000 of Certificates of Participation

(COPs) maturing on October 1, 2021 with interest rates from 4.1% to 6% for the

purpose of redeeming a lease-purchase agreement entered into in 1996 and theDistrict’s 1994 Series C Certificates of Participation. The District also used the COPsproceeds to implement the District’s 2000 Capital Projects. The COPs are a generalobligation of the District, and are payable from revenues and cash receipts to be

generated by the District.

In February 2010, the District issued COP Refunding Bonds totaling $5,100,000 for the

purpose of refunding the 2000 Certificates of Participation. The refunding bonds bear

an interest rate of 2% to 4.125% and mature through 2022.

The following is a summary of future payments for Certificates of Participation:

Year EndingJune 30, Payments

2012 $ 521,3632013 523,9632014 524,4382015 522,7382016 525,663

2017-2021 2,622,0062022 530.723

Total 5,770,894

Less amount representing interest (1,035,894)

$ 4,735,000

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Refunding of “Series 1998 Bonds” and “Series 2000” General Obligation Bonds

On September 1, 1998 the District issued $7,500,000 of General Obligation Bonds tofund the construction of H. Clarke Powers School and other projects. The Bondsmature in varying amounts through 2023 with interest rates from 3.8% to 7.0%.

On May 11, 2000 the District issued $1,800,000 of General Obligation Bonds to fundconstruction projects of the District. The Bonds mature in varying amounts through2024 with interest rates from 5.0% to 8.0%.

On February 3, 2010 the district refinanced their “Series 1998 Bonds” and “Series 2000Bonds” into one general obligation bond. The Bonds mature in varying amounts through2025 with interest rates from 1.0% to 4.125%.

The following is a summary of the future bond payments:

Year EndingJune 30, Principal Interest Total

2012 $ 430,000 $ 200,375 $ 630,3752013 430,000 192,850 622,8502014 440,000 181,975 621,9752015 445,000 170,913 615,9132016 455,000 159,663 614,663

2017-2021 2,505,000 586,106 3,091,1062022-2025 1,815,000 118.594 1,933,594

$ 6,520,000 $ 1,610,476 $ 8,130,476


The District leases facilities for Loomis Basin Charter School on District campusesunder long-term lease purchase agreements with a zero percent interest rate. Asummary of future minimum lease payments is as follows:


2012 $ 140,0602013 146,1482014 152,4992015 159,1272016 166,0432017 173.260

Total 937,137

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Capitalized Lease Obligations (Continued)

The District leases lighting fixtures on District campuses under long-term leasepurchase agreements with a zero percent interest rate. A summary of future minimumlease payments is as follows:


2012 $ 47,4642013 36,554

Total 84,018

The District has the following obligation to the State of California Energy ResourcesConservation and Development Commission. A summary of future minimum leasepayments is as follows:


2012 $ 68,0382013 68,0202014 68,0382015 68,0382016 68,038

2017-2021 340,1912022-2024 170.097

Total 850,460

Less amount representing interest (151,602)

698,858

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Early Retirement

The District has the following obligations to CaISTRS for early retirement incentivesgranted to terminated employees:


2012 $ 5,3992013 5,1812014 4595

Total 15,175


13,867

Changes in Long-Term Liabilities

A schedule of changes in long-term liabilities for the year ended June 30, 2011 is asfollows:

Balance Balance AmountsJuly 1, June 30, Due Within2010 Additions Deductions 2011 One Year

Governmental activities:Certificates of Participation $ 5,155,000 $ 420,000 $ 4,735,000 $ 365,000General Obligation Bonds 6,900,000 380,000 6,520,000 430,000Capital lease obligation 1,071,364 $ 793,785 145,136 1,720,013 228,829Other postemployment

benefits (Note 8) 1,935,711 321,958 205,487 2,052,182Early retirement 18,612 4,745 13,867 4,745Compensated absences 42,540

___________

6,554 35,986 35,986

$ 15,123,227 $ 1,115,743 $ 1,161922 $ 15,077,048 $ 1,064,560

Payments on the Certificates of Participation are made from the General Fund.Payments on the General Obligation Bonds are made from the Bond Interest andRedemption Fund. Payments on the capital lease obligation are made from the GeneralFund and Charter Schools Fund. Payments on the other postemployment benefits,early retirement and compensated absences are made from the Fund for which therelated employee worked.

39



6. NET ASSETS I FUND BALANCES

Restricted net assets as of June 30, 2011 consisted of the following:

GovernmentalActivities

Restricted for cash in revolving fund $ 2,000

Restricted for prepaid expenditures 109,521

Restricted for unspent categorical program revenues 105,644

Restricted for special revenues 339,540

Restricted for capital projects 46,863

Restricted for debt service 639.781

$ 1,243,349


Charter AllGeneral Schools Non-Major

Fund Fund Funds Total

Nonspendable:Revolving cash fund $ 2,000 $ 2,000

Prepaid expenditures 109,521 109,521

Subtotal nonspendable 111,521 111,521

Restricted:Unspent categorical revenues 105,644 105,644

Charter schools $ 232,001 232,001

Pupil transportation $ 58,849 58,849

Capital projects 46,863 46,863

Food service operations 48,505 48,505

Deferred maintenance 185 185

Debt service 639,781 639.781

Subtotal restricted 105,644 232,001 794,183 1,131,828

Assigned:Postemployment benefits 152,011 152,011

Board assignments 2,382,693 2,382,693

Subtotal assigned 2,534,704 2,534,704

Unassigned:Designated for economic

uncertainty 644,880 644,880

Total fund balances $ 3,396,749 $ 232,001 $ 794,183 $ 4,422,933

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Qualified employees are covered under multiple-employer defined benefit pension plansmaintained by agencies of the State of California. Certificated employees are membersof the State Teachers’ Retirement System (STRS), and classified employees aremembers of the California Public Employees’ Retirement System (CaIPERS).


California Public Employees’ Retirement System (CaIPERS)

Plan Description

The District contributes to the School Employer Pool under the California Public

Employees’ Retirement System (CaIPERS), a cost-sharing multiple-employer public

employee retirement system defined benefit pension plan administered by CaIPERS.The plan provides retirement and disability benefits, annual cost-of-living adjustments,

and death benefits to plan members and beneficiaries. Benefit provisions are

established by state statutes, as legislatively amended, within the Public Employees’

Retirement Law. CaIPERS issues a separate comprehensive annual financial report

that includes financial statements and required supplementary information. Copies of

the CaIPERS annual financial report may be obtained from the CaIPERS Executive

Office, 400 Q Street, Sacramento, California 95811.

Funding Policy

Active plan members are required to contribute 7% of their salary (7% of monthly salary

over $133.33 if the member participates in Social Security), and the District is required

to contribute an actuarially determined rate. The actuarial methods and assumptions

used for determining the rate are those adopted by the CaIPERS Board of

Administration. The required employer contribution rate for fiscal year 2010-2011 was

10.707% of annual payroll. The contribution requirements of the plan members are

established by state statute. The District’s contributions to CaIPERS for the fiscal years

ending June 30, 2009, 2010 and 2011 were $200,064, $137,977 and $200,678,respectively, and equal 100% of the required contributions for each year.

State Teachers’ Retirement System (STRS)

Plan Description

The District contributes to the State Teachers’ Retirement System (STRS), a cost-

sharing multiple-employer public employee retirement system defined benefit pension

plan administered by STRS. The plan provides retirement, disability and survivor

benefits to beneficiaries. Benefit provisions are established by state statutes, as

legislatively amended, within the State Teachers’ Retirement Law. STRS issues a

separate comprehensive annual financial report that includes financial statements and

required supplementary information. Copies of the STRS annual financial report may be

obtained from the STRS Executive Office, 100 Waterfront Place, West Sacramento,

California 95605.

41





State Teachers’ Retirement System (STRS) (Continued)

Funding Policy

Active plan members are required to contribute 8% of their salary. The required

employer contribution rate for fiscal year 2010-2011 was 8.25% of annual payroll. The

contribution requirements of the plan members are established by state statute. The

District’s contributions to STRS for the fiscal years ending June 30, 2009, 2010 and

2011 were $713,787, $718,595 and $691,628, respectively, and equal 100% of the

required contributions for each year.

8. OTHER POSTEMPLOYMENT BENEFITS

In addition to the pension benefits described in Note 7, the District provides other

postemployment benefits (OPES) to eligible certificated and classified employees who

retire from the District. The District pays the insurance premiums for retiree coverage

as determined by contract and explained below.

Eligibility requirements and benefit provisions are as follows:

Certificated Employees

Early Retirement Health Insurance

For certificated employees who were employed by the District on October 1, 1988, and

who retired between the ages of 55 and 65 with 15 years of consecutive service

immediately prior to retirement, the District provides employee-only medical insurance

until the retiree reaches the age of 65.

Retirement Health Insurance

For certificated employees who were 50 years of age, with 15 years of continuous

employment by the District on September 1, 1988, and who retired under a STRS plan,

the District provides employee-only medical coverage until the retiree reaches the age of

65. At age 65, if the retiree is eligible for Medicare, and enrolls in a District medical

insurance plan with a Medicare supplement, the District will pay the employee-only

Medicare supplement. If the employee is not eligible for Medicare, the District will pay

an amount equal to the employee-only Medicare supplement.

For certificated employees who were 40 years of age, with 10 years of continuous

employment by the District on September 1, 1988, and who retired under a STRS plan,

the District provides employee-only medical insurance until the retiree reaches the age

of 65. At age 65 to age 70, if the retiree is eligible for Medicare, and enrolls in a District

medical insurance plan with a Medicare supplement, the District will pay the employee-

only Medicare supplement.

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8. OTHER POSTEMPLOYMENT BENEFITS (Continued)

Classified Employees

For certain classified employees who were employed by the District in 1987, and whoretired from the District prior to age 65, the District provides employee-only insuranceunder two options:

Option One

The District pays 100 percent of the employee-only medical premium for the first threeyears following retirement, and then 60 percent of the premium for the next 5 years, orto age 65, whichever occurs first.

Option Two

The District pays 100 percent of the employee-only medical premium for the first fiveyears following retirement, or to age 65, whichever occurs first.

The contribution requirements for plan members and the District are established andmay be amended by the Board of Trustees. The required contribution is based on

projected pay-as-you-go financing requirements, with an amount to fund the actuarial

accrued liability as determined annually by the Board. For the fiscal year ended

June 30, 2011, the District contributed $205,487 to the plan.

The District’s annual other postemployment benefit (OPEB) cost (expense) is calculated

based on the annual required contribution of the employer (ARC), an amount actuarially

determined in accordance with the parameters of GASB Cod. Sec. P50.108-.109. The

ARC 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 following table shows the components of

the DistricVs annual OPEB cost for the year, the amount actually contributed to the plan,

and changes in the District’s net OPEB obligation:

Annual required contribution $ 225,172

Interest on net OPEB obligation 96,786

Adjustment to annual required contribution

Annual OPEB cost (expense) 321,958

Contributions made (205.487)

Increase in net OPEB obligation 116,471

Net OPEB obligation - beginning of year 1.935.711

Net OPEB obligation - end of year $ 2,052,182

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The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to theplan, and the net OPEB obligation for the year ended June 30, 2011 and preceding twoyears were as follows:

Percentageof Annual

Fiscal Year Annual OPEB Cost Net OPEBEnded OPEB Cost Contributed Obligation

June 30, 2009 $ 225,172 100.2% $ 1,835,259June3O,2010 $ 316,935 68.3% $ 1,935,711June 30, 2011 $ 321,958 63.8% $ 2,052,182

As of March 1, 2009, the most recent actuarial valuation date, the plan was unfunded.The actuarial accrued liability for benefits was $2,058,815, and the actuarial value ofassets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $2,058,815million. The covered payroll (annual payroll of active employees covered by the Plan)was $443,256, and the ratio of the UAAL to the covered payroll was 464 percent. TheOPEB plan is currently operated as a pay-as-you-go plan.

Actuarial valuations of an ongoing plan involve estimates of the value of reportedamounts and assumptions about the probability of occurrence of events far into thefuture. Examples include assumptions about future employment, mortality, and thehealthcare cost trend. Amounts determined regarding the funded status of the plan andthe annual required contributions of the employer are subject to continual revision asactual results are compared with past expectations and new estimates are made aboutthe future. The schedule of funding progress, shown above, presents multiyear trendinformation about whether the actuarial value of plan assets is increasing or decreasingover time relative to the actuarial accrued liabilities for benefits.

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

In the March 1, 2009 actuarial valuation, the entry age actuarial cost method was used.The actuarial assumptions included a 5.0 percent investment rate (net of administrativeexpenses), which is a blended rate of the expected long-term investment returns on planassets and on the employer’s own investments and an annual healthcare cost trend rateof 4.0 percent initially. Both rates included a 3.0 percent inflation assumption. TheUAAL is being amortized as a level percentage of projected payroll on an open basis.

44



9. JOINT POWERS AUTHORITIES


The District is a member of a Joint Powers Authority, Schools Insurance Group (SIG),

for the operation of a common risk management and insurance program. The program

covers workers’ compensation, property/liability, and health and welfare insurance. The

membership includes the school districts in Placer and Nevada Counties and their

respective County Offices. SIG is governed by an Executive Board consisting of

representatives from member districts. The Executive Board controls the operations of

SIG, including selections of management and approval of operating budgets.

The following is a summary of financial information for SIG at June 30, 2010 (the latest

information available):

Total assets $ 78,249,905Total liabilities $ 28,922,356

Net assets $ 49,327,549

Total revenues $ 76,619,585

Total expenses $ 72,953,461

Change in net assets $ 3,666,124

Mid-Placer Public Schools Transportation Agency

The District is also a member in a Joint Powers Authority, Mid-Placer Public Schools

Transportation Agency (MPPSTA), for the operation of transportation services. The

District is a member with the Ackerman School District, Alta-Dutch Flat Union

Elementary School District, Colfax School District, Placer Union High School District and

Placer County Office of Education.

Each member district has two representatives on the Governing Board. Each member

of that Board has equal voting rights. The Governing Board has decision-making

authority which includes the power to designate management and the ability to

significantly influence operations.

Condensed financial information for MPPSTA for the year ended June 30, 2010 (the

latest information available) is as follows:

Total assets $ 4,787,843

Total liabilities $ 1,381,998Net assets $ 3,405,845

Total revenues $ 3,677,120Total expenditures $ 3,606,377Change in net assets $ 70,743

45



9. JOINT POWERS AUTHORITIES (Continued)

School Project for Utility Rate Reduction

The District is also a member of a Joint Power Authority, School Project for Utility RateReduction (SPURR), for the direct purchase of natural gas, electricity and other utilityservices.

Condensed financial information for SPURR for the year ended June 30, 2010 (thelatest information available) is as follows:

Total assets $ 13,604,232Total liabilities $ 7,841,831Net assets $ 5,762,401Total revenues $ 37,110,968Total expenses $ 37,334,283Change in net assets $ (223,315)

The relationship between the District and the three Joint Powers Authorities is such thatthe Joint Powers Authorities are not component units of the District for financialreporting purposes.

10. CONTINGENCIES


Also, the District has received federal and state funds for specific purposes that aresubject to review or audit by the grantor agencies. Although such audits could generateexpenditure disallowances under terms of the grants, it is believed that any requiredreimbursements will not be material.


Tax and Revenue Anticipation Notes

On September 23, 2011, the District issued Tax and Revenue Anticipation Notes(TRANs) totaling $2,000,000, with an interest rate of 2.00%. The TRANs are payableonly out of taxes, income, revenue, cash receipts and other monies which are receivedby the District for its General Fund and are attributable to the fiscal year 2011-2012 andlegally available for payment thereof. The TRANs are secured by a pledge of certainunrestricted revenues received by the District issuing such TRANs for its General Fundattributable to the fiscal year 2011-2012, and the TRANs constitute a first lien andcharge payable from the first monies received by the District from such pledgedrevenues. The TRANs are scheduled to mature on October 4, 2012.

Subsequent Events

The District has reviewed all events occurring from June 30, 2011 through October 27,2011, the date the financial statements were issued. No subsequent events occurredrequiring accrual or disclosure.

46




GENERAL FUND






State apportionment $ 2,525,840 $ 3,875,276 $ 3,875,276Local sources 8,096,512 7,491,466 7491,466

Total revenue limit 10,622,352 11,366,742 11,366,742

Federal sources 751,679 1,547,815 1,387,566 $ (160,249)

Other state sources 1,954,340 2,078,901 2,055,796 (23,105)

Other local sources 829,335 1.588,829 1.374,566 (214.263)

Total revenues 14,157,706 16,582,287 16,184,670 (397.617)

Expenditures:Certificated salaries 7,516,876 8,016,512 7,550,895 465,617

Classified salaries 2,038,460 2,117,268 2,114,184 3,084

Employee benefits 2,745,271 2,692,875 2,680,318 12,557

Books and supplies 512,592 930,695 548,861 381,834

Contract services and operatingexpenditures 1,526,453 1,604,757 1,565,965 38,792

Capital outlay 801,162 801,162

Other outgo 320,860 357,850 357,850

Debt service:Principal retirement 248,405 430,910 430,910

Interest 105,130 105,130

Total expenditures 14,908,917 17,057.159 16,155,275 901.884

Deficiency of revenuesunder expenditures (751,211) (474,872) 29,395 504,267

Other financing sources (uses):Operating transfers in 326,790 243,652 32,646 (211,006)

Operating transfers out (242,548) (31,543) 31,543

Proceeds from issuance of long-termliabilities 792,006 793.785 1,779

Total other financing sources (uses) 84,242 1,004,115 826,431 (177,684)

Net change in fund balance (666,969) 529,243 855,826 326,583

Fund balance, July 1, 2010 2,540,923 2.540,923 2.540,923

___________

Fund balance, June 30, 2011 $ 1,873,954 $ 3,070,166 $ 3,396,749 $ 326,583


47


CHARTER SCHOOLS FUND






State apportionment $ 1,419,767 $ 1,500.580 $ 1500,580

Total revenue limit 1.419.767 1.500,580 1.500.580

Federal sources 72,910 18,142 $ (54,768)Other state sources 317,057 384,892 384,892Other local sources 30.053 9,107 (20,946)

Total revenues 1,736,824 1,988.435 1,912,721 (75.714)

Expenditures:Certificated salaries 877,794 866,414 819,145 47,269Classified salaries 120,265 123,922 123,917 5Employee benefits 247,136 210,122 210,076 46Books and supplies 30,153 90,315 51,215 39,100Contract services and operating

expenditures 240,825 274,303 274,297 6Capital outlay 245,788 245,788Debt service:

Principal retirement 134,226 134,226 134,226Interest 44,641 44.641 44,641

Total expenditures 1.695,040 1,989,731 1.903,305 86,426

Excess (deficiency) of revenuesover (under) expenditures 41,784 (1,296) 9,416 10,712

Other financing uses:Operating transfers out (84,242) (31.542) (31,542)

_____________

Net change in fund balance (42,458) (32,838) (22,126> 10,712

Fund balance, July 1, 2010 254.127 254,127 254,127

Fund balance, June 30, 2011 $ 211.669 $ 221,289 $ 232,001 $ 10,712


48


SCHEDULE OF OTHER POSTEMPLOYMENT BENEFITS (OPEB)FUNDING PROGRESS


Schedule of Funding ProgressUnfunded UAAL as a

Actuarial Actuarial PercentageFiscal Actuarial Actuarial Accrued Accrued ofYear Valuation Value of Liability Liability Funded Covered Covered

Ended Date Assets IAAL) {UAAL) Ratio Payroll Payroll

6/30/2009 March 1, 2009 $ - $ 2,058,815 $ 2,058,815 0% $ 767,162 268%6/30/2010 March 1,2009 $ - $ 2,058,815 $ 2,058,815 0% $ 740,299 278%6/30/2011 March 1,2009 $ - $ 2,058,815 $ 2,058,815 0% $ 443,256 464%


49





ALL NON-MAJOR FUNDS

June 30, 2011

BondPupil Interest

Deferred Transpor- Capital andCafeteria Maintenance tation Facilities Redemption

Fund Fund Fund Fund Fund Total

ASSETS

Cash in County Treasury $ 57304 $ 185 $ 58,849 $ 50,978 $ 639,781 $ 807,097

Collections awaiting deposit 175 175

Accounts receivable 5.646

___________ ___________ ___________ ___________

5,44

Total assets $ 63,125 $ 185 $ 58,849 $ 50,978 $ 639,781 $ 812,918


Liabilities:Accounts payable $ 14,620 $ 4,115 $ 18,735

Fund balances - restricted 48,505 $ 185 $ 58,849 46,863 $ 639,781 794,183

Total liabilities and fundbalances $ 63,125 $ 185 $ 58,849 $ 50,978 $ 639,781 $ 812,918


50



ALL NON-MAJOR FUNDS


BondPupil Interest

Deferred Transpor- Capital andCafeteria Maintenance tation Facilities Redemption

Fund Fund Fund Fund Fund Total


Local sources $ 3,800 $ 3,800Federal sources 178,451 178,451

Other state sources 13,119 13,119

Otherlocalsources 243,947 $ 185 $ 1,111 $ 162,802 $ 751.603 1,159,648

Total revenues 439,317 185 1111 162,802 751.603 1,355,018

Expenditures:Certificated salaries 18,247 18,247

Classified salaries 153,805 55,273 209,078

Employee benefits 53,491 14,482 67,973

Books and supplies 158,042 158,042

Contract services and operatingexpenditures 44,768 9,369 54,137

Debt service:Principal retirement 380,000 380,000

Interest 69,642 220,473 29Qjj

Total expenditures 410,106 167,013 600,473 1,177,592

Excess (deficiency) ofrevenues over (under)expenditures 29,211 185 1,111 (4,211) 151,130 177,426

Other financing uses:Operating transfer out (1.104) (1.104)

Net change in fund balances 29,211 (919) 1,111 (4,211) 151,130 176,322

Fund balances, July 1,2010 19.294 1,104 57,738 51,074 488,651 617,861

Fund balances, June 30, 2011 $ 48,505 185 $ 58,849 $ 46,863 $ 639,781 $ 794,183


51


ORGANIZATION

June 30, 2011

Loomis Union School District was established in 1856 and is comprised of an area ofapproximately 46 square miles located in Placer County. There were no changes in theboundaries of the District during the year. The District is currently operating six elementaryschools and one K-6 Charter School.

GOVERNING BOARD


Mr. James L. Foster, Jr. President November 2012Mr. Kurt Turner Clerk November 2012Ms. Ann Baker Member November 2014Ms. Jeanne Duvall Member November 2014Mr. Michael J. Edwards Member November 2014

ADM I NISTRATI ON

Mr. Paul Johnson *

Superintendent

Mr. Jay StewartAssistant Superintendent of Business Services

* Effective July 1, 2011, the Superintendent is Gordon Medd.

52




SecondPeriod AnnualReport Report

District

Kindergarten 198 198

First through Third 645 647

Fourth through Eighth 1,287 1,290

Home and Hospital 2 2

Special Education 41 42

Totals 2,173 2,179

Loomis Basin Charter School (Classroom-Based)

Kindergarten 38 38

First through Third 116 116

Fourth through Sixth 145 146

Totals 299 300


53





54

Statutory Reduced1986-87 1986-87 StatutoryMinutes Minutes 1882-83Require- Require- Actual

Grade Level ment ment Minutes

DISTRICT

Kindergarten 36,000 35,000 32,040

Grade 1 50,400 49,000 46,766

Grade 2 50,400 49,000 46,766

Grade 3 50,400 49,000 46,766

Grade 4 54,000 52,500 50,189

Grade 5 54,000 52,500 50,189

Grade 6 54,000 52,500 50,189

Grade 7 54,000 52,500 50,189

Grade 8 54,000 52,500 50,189

LOOMIS BASIN CHARTER SCHOOL - CLASSROOM BASED

Kindergarten 36,000 N/A N/A

Grade 1 50,400 N/A N/A





Reduced1982-83Actual

Minutes

31150

45,467

45,467

45,467

48,795

48,795

48,795

48,795

48,795

N/A

N/A

N/A

N/A

N/A

N/A

N/A

2010-11Actual

Minutes

35,565

49,210

49,210

49,210

52,640

52,640

52,640

52,640

52,640

59,850

62,535

62,535

62,535

62,535

65,190

65,190

Numberof Days

TraditionalCalendar

175

175

175

175

175

175

175

175

175

180

180

180

180

180

180

180

Status

In Compliance

In Compliance

In Compliance

In Compliance

In Compliance

In Compliance

In Compliance

In Compliance

In Compliance

In Compliance

In Compliance

In Compliance

In Compliance

In Compliance

In Compliance

In ComplianceGrade 6 54,000 N/A N/A




Pass-Through

Federal Entity FederalCatalog Federal Grantor!Pass-Through Identifying Expend-Number Grantor/Program or Cluster Title Number itures


Special Education Cluster:84,027 IDEA Basic Local Assistance 13379 $ 258,37684.173 IDEA Preschool Grants 13430 10,09484.027 IDEA Preschool Local Entitlement 13682 30,70384.391 ARRA IDEA Basic Local Assistance 13379 116,37884.392 ARRA IDEA Preschool Grants 13430 13,38984.392 ARRA IDEA Preschool Local Entitlement 13682 27,957

Subtotal Special Education Cluster 456.897

Educational Technology Cluster:84.318 NCLB: Title Il, Part D, Enhancing Education Through

Technology 14334 2,93384.386 NCLB: ARRA Title II, Part D, Enhancing Education

Through Technology 15019 3,095

Subtotal Educational Technology Cluster 6,028

84.010 NCLB: Titlel, PartA, Basic Grants Low Incomeand Neglected 14329 164,587

84.367 Title II, Part A, Improving Teacher Quality 14341 55,18584.282 NCLB: Title V, Part B, Charter School Grants 14531 15,43384.394 ARRA: State Fiscal Stabilization Fund 25008 106,888

Total U.S. Department of Education 805,018

U.S. Department of Agriculture - Passed through CaliforniaDepartment of Education

10.555 National School Lunch Program 13391 178,451

U.S. Department of Health and Human Services - Passed throughCalifornia Department of Education

93.778 Medi-Cal Administrative Activities 10013 59,981

Total Federal Programs $ 1,043,450


55




GeneralFund

June 30, 201 1 Unaudited Actual Financial Report EndingFund Balance $ 2,856,040

Audit adjustment to remove deferred revenue and recognizerevenue for the Medi-Cal Administrative Activities Program 540,709

June 30, 2011 Audit Financial Statements Ending Fund Balance $ 3,396,749

There were no audit adjustments proposed to any other funds of the District.


56




(AdoptedBudget)

2012 2011 2010 2009General Fund

Revenues and otherfinancing sources $ 15,034,981 $ 17,011,101 $ 20,237,765 $ 17,172,467

Expenditures 15,931,209 16,155,275 20,976,736 17,482,073Other uses and transfers out 150,939

___________

184,689

___________

Total outgo 16,082,148 16,155,275 21,161,425 17,482,073

Change in fund balance $ (1,047,167) $ 855,826 $ (923.660) $ (309.606)

Ending fund balance $ 2,349,582 $ 3,396,749 $ 2,540923 $ 3,464,583

Available reserves $ 637,250 $ 644.880 $ 843,563 $ 693,885

Designated for economicuncertainties $ 637,250 $ 644,880 $ 843,563 $ 693,885

Undesignated fund balance

Available reserves as apercentage of total outgo 4.0% 4.0% 4.0% 3.9%

Total long-term liabilities $ 14,012,488 $ 15,077,048 $ 15,123.227 $ 15,313,286

Average daily attendance at P-2,excluding Charter School 2,167 2,173 2,167 2,089

The General Fund fund balance, including the Special Reserve for Postemployment Benefits Fund, hasdecreased by $377,440 over the last three years. The District projects a decrease of $1,047,167 for thefiscal year ending June 30, 2012. For a district this size, the State of California recommends availablereserves of at least 3% of total General Fund expenditures, transfers out, and other uses. The District isin compliance with this requirement.

The District incurred operating deficits in two of the past three years and anticipates incurring an operatingdeficit during the fiscal year ending June 30, 2012.

Total long-term liabilities have decreased by $236,238 over the past two years.

Average daily attendance has increased by 84 over the past two years. A decrease of 6 ADA isanticipated during the fiscal year ending June 30, 2012.


57






Loomis Basin Charter School Included as Charter Schools Fund.


58



PURPOSE OF SCHEDULES




The District has received incentive funding for increasing instructional time as

provided by the Incentives for Longer Instructional Day. This schedule

presents information on the amount of instructional time offered by the District,

and whether the District complied with the provisions of Education Code

Sections 46201 through 46206.


0MB Circular A-133 requires a disclosure of the financial activities of all

federally funded programs. This schedule was prepared to comply with A-133

requirements, and is presented on the modified accrual basis of accounting.

The following schedule provides a reconciliation between revenues reported on

the Statement of Revenues, Expenditures and Change in Fund Balances and

the related expenditures reported on the Schedule of Expenditure of Federal

Awards. The reconciling amounts represent Federal funds that have been

recorded as revenues that have not been expended by June 30, 2011.

CFDADescription Number Amount


Less: Medi-Cal Administrative Activitiesnot spent (540J09)

Total Schedule of Expenditure of FederalAwards $ 1043,450

D - Reconciliation of Unaudited Actual Financial Report with Audited Financial

Statements

This schedule provides the information necessary to reconcile the fund

balances of all funds as reported on the Unaudited Actual Financial Report tothe audited financial statements.

59



PURPOSE OF SCHEDULES (Continued)


This schedule provides trend information on fund balances, revenues,expenditures and average daily attendance, as required by the StateController’s Office.




Education Code Section 14502 requires certain disclosures in the financial statementsof districts which adopt Early Retirement Incentive Programs pursuant to EducationCode Sections 22714 and 44929. For the fiscal year ended June 30, 2011, the Districtdid not adopt such a program.

60

INDEPENDENT AUDITORS REPORTON COMPLIANCE WITH STATE LAWS AND REGULATIONS


We have audited the compliance of Loomis Union School District with the types ofcompliance requirements described in the State of California’s Standards and Procedures forAudits of California K42 Local Educational Agencies (the “Audit Guide”) to the state laws andregulations listed below for the year ended June 30, 2011. Compliance with the requirementsof state laws and regulations is the responsibility of Loomis Union School District’smanagement. Our responsibility is to express an opinion on Loomis Union School District’scompliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generallyaccepted in the United States of America; the standards applicable to financial audits containedin Government Auditing Standards, issued by the Comptroller General of the United States; andthe State of California’s Standards and Procedures for Audits of California K-12 LocalEducational Agencies. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether noncompliance with the state laws and regulations listedbelow occurred. An audit includes examining, on a test basis, evidence about Loomis UnionSchool District’s compliance with those requirements and performing such other procedures aswe considered necessary in the circumstances. We believe that our audit provides areasonable basis for our opinion. Our audit does not provide a legal determination of LoomisUnion School District’s compliance with those requirements.

Audit Guide ProceduresDescriotion Procedures Performed

Regular and Special Day Classes 8 YesKindergarten Continuance 3 YesIndependent Study 23 No, see belowContinuation Education 10 No, see belowInstructional Time:

School Districts 6 YesCounty Offices of Education 3 No, see below

Instructional Materials:General requirements 8 Yes

Ratio of Administrative Employees to Teachers 1 YesClassroom Teacher Salaries I YesEarly Retirement Incentive Program 4 No, see belowGann Limit Calculation I YesSchool Accountability Report Card 3 No, see belowPublic Hearing Requirements - Receipt of Funds 1 YesClass Size Reduction Program:

General requirements 7 YesOption one classes 3 YesOption two classes 4 No, see belowDistricts with only one school serving K-3 4 No, see below

After School Education and Safety Program:General requirements 4 No, see belowAfter school 4 No, see belowBefore school 5 No, see below

61

INDEPENDENT AUDITORS’ REPORTON COMPLIANCE WITH STATE LAWS AND REGULATIONS

(Continued)

Audit Guide ProceduresDescription Procedures Performed

Contemporaneous Records of Attendance, for charter schools 1 YesMode of Instruction, for charter schools I YesNonclassroom-Based Instruction/Independent Study,

for charter schools 15 No, see belowDetermination of Funding for Nonclassroom-Based

Instruction, for charter schools 3 No, see belowAnnual Instructional Minutes - Classroom-Based,

for charter schools 3 Yes

We did not perform procedures related to Independent Study because the District’sreported ADA was below the materiality level that requires testing.

We did not perform any procedures related to Continuation Education or After SchoolEducation and Safety Program because the District does not offer these programs.

We did not perform any procedures related to instructional time for County Offices ofEducation because the District is not a County Office.

The District did not offer an Early Retirement Incentive Program; therefore, we did notperform any procedures related to the Early Retirement Incentive Program.

The 2010-2011 School Accountability Report Cards specified by Education CodeSection 33126 are not required to be completed, nor were they completed, prior to thecompletion of our audit procedures for the year ended June 30, 2011. Accordingly, we couldnot perform the portions of audit steps (a), (b) and (c) of Section 19837 of the 2010-2011 AuditGuide relating to the comparison of tested data from the 2010-2011 fiscal year to the 2010-2011 School Accountability Report Cards.

We did not perform any procedures related to Class Size Reduction Program - OptionTwo classes and Districts with only one school serving K-3 because the District does not offerOption Two, and the District has more than one school serving K-3.

We did not perform any procedures related to Nonclassroom-BasedInstruction/Independent Study for charter schools and Determination of Funding forNonclassroom-Based Instruction for charter schools because the District does not offerNonclassroom-Based Instruction for charter schools.

In our opinion, Loomis Union School District complied with the state laws andregulations referred to above for the year ended June 30, 2011. Further, based on ourexamination, for items not tested, nothing came to our attention to indicate that Loomis UnionSchool District had not complied with the state laws and regulations.

62

INDEPENDENT AUDITORS’ REPORTON COMPLIANCE WITH STATE LAWS AND REGULATIONS

(Continued)

This report is intended solely for the information of the Board of Trustees, management,the State Controller’s Office, the California Department of Education and the CaliforniaDepartment of Finance, and is not intended to be and should not be used by anyone other thanthese specified parties. However, this report is a matter of public record and its distribution isnot limited.

LA-f5Sacramento, CaliforniaOctober 27, 2011

63

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON ANAUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS


We have audited the financial statements of Loomis Union School District as of and forthe year ended June 30, 2011, and have issued our report thereon dated October 27, 2011.We conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

Management of Loomis Union School District is responsible for establishing andmaintaining effective internal control over financial reporting. In planning and performing ouraudit, we considered Loomis Union School District’s internal control over financial reporting as abasis for designing our auditing procedures for the purpose of expressing our opinion on thefinancial statements, but not for the purpose of expressing an opinion on the effectiveness ofLoomis Union School District’s internal control over financial reporting. Accordingly, we do notexpress an opinion of the effectiveness of Loomis Union School District’s internal control overfinancial reporting.

A deficiency in internal control exists when the design or operation of a control does notallow 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 adeficiency, or combination of deficiencies, in internal control, such that there is a reasonablepossibility that a material misstatement of the entity’s financial statements will not be prevented,or detected and corrected on a timely basis.

Our consideration of internal control over financial reporting was for the limited purposedescribed in the first paragraph of this section and was not designed to identify all deficienciesin internal control over financial reporting that might be deficiencies, significant deficiencies ormaterial weaknesses. We did not identify any deficiencies in internal control over financialreporting that we consider to be material weaknesses, as defined above.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Loomis Union School District’sfinancial statements are free of material misstatement, we performed tests of its compliancewith 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 anobjective of our audit and, accordingly, we do not express such an opinion. The results of ourtests disclosed no instances of noncompliance or other matters that are required to be reportedunder Government Auditing Standards.

Loomis Union School District’s response to the finding identified in our audit is includedin the accompanying Schedule of Audit Findings and Questioned Costs. We did not audit theDistrict’s response and, accordingly, express no opinion on it.

64

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON ANAUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS(Continued)

This report is intended solely for the information of the Board of Trustees, management,the California Department of Education, the California State Controller’s Office and federalawarding agencies and pass-through entities, and is not intended to be and should not be usedby anyone other than these specified parties.

LM”Sacramento, CaliforniaOctober 27, 201 1

65

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITHREQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL

EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROLOVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133


Compliance

We have audited Loomis Union School District’s compliance with the types ofcompliance requirements described in the (IS. Office of Management and Budget (0MB)Circular A-133 Compliance Supplement that could have a direct and material effect on each ofLoomis Union School District’s major federal programs for the year ended June 30, 2011.Loomis Union School District’s major federal programs are identified in the summary ofauditor’s results section of the accompanying Schedule of Audit Findings and QuestionedCosts. Compliance with the requirements of laws, regulations, contracts and grants applicableto each of its major federal programs is the responsibility of Loomis Union School District’smanagement. Our responsibility is to express an opinion on Loomis Union School District’scompliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generallyaccepted in the United States of America; the standards applicable to financial audits containedin Government Auditing Standards, issued by the Comptroller General of the United States; and0MB Circular A-133. Those standards and 0MB Circular A-133 require that we plan andperform the audit to obtain reasonable assurance about whether noncompliance with the typesof compliance requirements referred to above that could have a direct and material effect on amajor federal program occurred. An audit includes examining, on a test basis, evidence aboutLoomis Union School District’s compliance with those requirements and performing such otherprocedures as we considered necessary in the circumstances. We believe that our auditprovides a reasonable basis for our opinion. Our audit does not provide a legal determinationon Loomis Union School District’s compliance with those requirements.

In our opinion, Loomis Union School District complied, in all material respects, with thecompliance requirements referred to above that could have a direct and material effect on eachof its major federal programs for the year ended June 30, 2011.

Internal Control Over Compliance

Management of Loomis Union School District is responsible for establishing andmaintaining effective internal control over compliance with the requirements of laws,regulations, contracts and grants applicable to federal programs. In planning and performingour audit, we considered Loomis Union School District’s internal control over compliance withthe requirements that could have a direct and material effect on a major federal program todetermine the auditing procedures for the purpose of expressing our opinion on compliance andto test and report on internal control over compliance in accordance with 0MB Circular A-133,but not for the purpose of expressing an opinion on the effectiveness of internal control overcompliance. Accordingly, we do not express an opinion on the effectiveness of Loomis UnionSchool District’s internal control over compliance.

66

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITHREQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIALEFFECT ON EACH MAJOR PROGRAM AND INTERNAL CONTROL

OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133(Continued)

Internal Control Over Compliance (Continued)

A deficiency in internal control over compliance exists when the design or operation of acontrol over compliance does not allow management or employees, in the normal course ofperforming their assigned functions, to prevent, or detect and correct, noncompliance with atype of compliance requirement of a federal program on a timely basis. A material weakness ininternal control over compliance is a deficiency, or combination of deficiencies, in internalcontrol over compliance, such that there is a reasonable possibility that material noncompliancewith a type of compliance requirement of a federal program will not be prevented, or detectedand corrected, on a timely basis.

Our consideration of internal control over compliance was for the limited purposedescribed in the first paragraph of this section and was not designed to identify all deficienciesin internal control over compliance that might be deficiencies, significant deficiencies or materialweaknesses. We did not identify any deficiencies in internal control over compliance that weconsider to be material weaknesses, as defined above.

This report is intended solely for the information of the Board of Trustees, management,the California Department of Education, the California State Controller’s Office and federalawarding agencies and pass-through entities, and is not intended to be and should not be usedby anyone other than these specified parties.

Sacramento, CaliforniaOctober 27, 2011

67






SECTION I - SUMMARY OF AUDITOR’S RESULTS


Type of auditor’s report issued: Unqualified

Internal control over financial reporting:Material weakness(es) identified?

______

Yes X NoSignificant deficiency(ies) identified not considered

to be material weakness(es)?

______

Yes X None reported

Noncompliance material to financial statementsnoted? Yes X No

FEDERAL AWARDS

Internal control over major programs:Material weakness(es) identified?

______


to be material weakness(es)?

______

Yes X None reported

Type of auditor’s report issued on compliance formajor programs: Unqualified

Any audit findings disclosed that are required to bereported in accordance with Circular A-i 33,Section 510(a)? Yes X No


CFDA Number(s) Name of Federal ProQram or Cluster

84.027, 84.173, 84.391, 84.392 Special Education Cluster


Auditee qualified as low-risk auditee? X Yes

______

No

STATE AWARDS

Internal control over state programs:Material weakness(es) identified?

______


to be material weaknesses?

______

Yes X None reported

Type of auditor’s report issued on compliance forstate programs: Unqualified

68





INTERNAL CONTROL — ACCOUNTS RECEIVABLE (30000)

Criteria

Internal Controls — Safeguarding of Assets

Condition

$30,001 was improperly excluded from accounts receivable at June 30, 2011.

Effect

Accounts receivable is understated.

Cause

Internal controls are not effectively designed and followed.

Fiscal Impact

Accounts receivable is understated by $30,001.

Recommendation

Manual journal entries should be reviewed by personnel independent of preparer.

Corrective Action Plan

The Associate Superintendent of Business will ensure that a second person is theBusiness Office reviews and intials working papers and journal entries prior to input mtthe District’s financial system.

69






70






71







District ExplanationFindinglRecommendation Current Status If Not Implemented

2010-1

At Penryn Elementary School, one student Implemented.was improperly counted as present forone day.

The Attendance Clerk should verify thatstudents are properly marked absent inthe attendance system once the absenceis verified through the absence verificationform or upon receipt of a note.

72






ROSEVILLE CITY SCHOOL DISTRICT COUNTY OF PLACER

ROSEVILLE, CALIFORNIA

AUDIT REPORT

JUNE 30, 2011



JUNE 30, 2011

TABLE OF CONTENTS

Page FINANCIAL SECTION

Independent Auditor's Report 1

Management's Discussion and Analysis (Unaudited) 3


Government-wide Financial Statements:





Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 17

Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 18

Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 19

Statement of Net Assets - Fiduciary Funds 20

Statement of Changes in Net Assets - Fiduciary Funds 21

Notes to the Basic Financial Statements 22

SUPPLEMENTARY INFORMATION SECTION

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund 47

Combining Statements:

Combining Balance Sheet - Non-Major Governmental Funds 48

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Non-Major Governmental Funds 49

Schedule of Funding Progress 50

i


JUNE 30, 2011

TABLE OF CONTENTS (CONCLUDED)

Page. SUPPLEMENTARY INFORMATION SECTION (CONCLUDED)

Organization/Board of Education/Administration 51



Schedule of Expenditures of Federal Awards 54

Reconciliation of Annual Financial and Budget Report with Audited Financial Statements 55


Notes to Supplementary Information 57

OTHER INDEPENDENT AUDITOR'S REPORTS SECTION

Independent Auditor's Report on State Compliance 59

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

61

Independent Auditor's Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133

63

FINDINGS AND QUESTIONED COSTS SECTION

Schedule of Findings and Questioned Costs:

Section I - Summary of Auditor's Results 65

Section II - Financial Statement Findings 66

Section III - Federal Award Findings and Questioned Costs 67

Section IV - State Award Findings and Questioned Costs 68

Status of Prior Year Recommendations 69

ii

FINANCIAL SECTION


STEPHEN ROATCH ACCOUNTANCY CORPORATION Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT

Board of Education Roseville City School District Roseville, California

We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Roseville City School District, as of and for the year ended June 30, 2011, which collectively comprise the District's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Roseville City School District's management. 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the 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 Roseville City School District, as of June 30, 2011, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated December 5, 2011 on our consideration of Roseville City School District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

The management's discussion and analysis on pages 3 through 13, the budgetary comparison information on page 47, and the Schedule of Funding Progress on page 50 are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.

1

P.O. Box 2196 / Folsom, CA 95763 /Phone (916) 966-3883 / Fax (916) 966-3815

Board of Education Roseville City School District Page Two

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Roseville City School District's basic financial statements. The combining fund financial statements, supplementary schedules listed in the table of contents, and the Schedule of Expenditures of Federal Awards, which is presented as required by the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

,tei44, Rt,ae,4 Aee,e144,,U4ie,ty et=dAV44.


December 5, 2011

2


MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED)

FOR THE FISCAL YEAR ENDED JUNE 30, 2011

(PREPARED BY DISTRICT MANAGEMENT)

This section of the Roseville City School District's annual financial report presents our discussion and analysis of the District's financial performance during the fiscal year that ended on June 30, 2011. Please read it in conjunction with the Independent Auditor's Report presented on pages 1 and 2 and the District's financial statements, which immediately follow this section.

USING THIS ANNUAL REPORT

The annual report consists of a series of financial statements. The Statement of Net Assets and Statement of Activities, presented on pages 14 through 15, provide information about the activities of the District as a whole and present a longer-term view of the District's finances. The fund financial statements for governmental activities, presented on pages 16 through 19, provide information about how the District services were financed in the short-term, and how much remains for future spending. Fund financial statements also report the District's operations in more detail than the government-wide statements by providing information about the District's most significant funds. The remaining statements provide financial information about activities for which the District acts solely as a trustee or agent for the benefit of those outside the District.

FINANCIAL HIGHLIGHTS

D Total current year net assets decreased $305,469 or 0.2% during 2010-11.

D Capital assets, net of depreciation, decreased by $4,401,620 primarily due to accumulated depreciation growing at a faster rate than acquisitions and improvements.

D Long-term debt decreased $2,111,918 due primarily to payments on the outstanding general obligation bond, certificates of participation, and deferred obligation for Barbara Chilton Middle School.

D The District's average daily attendance (ADA) increased by 302 ADA in fiscal year 2010-11.

D The District maintains sufficient reserves for a district its size. It meets the state required minimum reserve for economic uncertainty of 3% of total General Fund expenditures, transfers out, and other uses (total outgo). During fiscal year 2010-11, General Fund expenditures and other financing uses totaled $64,366,277. At June 30, 2011, the District has available reserves of $7,593,784 in the General Fund, which represents a reserve of 11.8%.

3





THE FINANCIAL REPORT

The full annual financial report consists of three separate parts, including the basic financial statements, supplementary information, and management's Discussion and Analysis. The three sections together provide a comprehensive overview of the District. The basic financial statements are comprised of the two kinds of statements that present financial information from different perspectives, government-wide and funds.

D Government-wide financial statements, which comprise the first two statements, provide both short-term and long-term information about the District's overall financial position.

D. Individual parts of the District, which are reported as fund financial statements comprise the remaining statements.

• Basic services funding is described in the governmental funds statements. These statements include short-term financing and identify the balance remaining for future spending.

• Financial relationships, for which the District acts as an agent or trustee for the benefit of others to whom the resources belong, are presented in the fiduciary funds statements.

Notes to the financials, which are included in the financial statements, provide more detailed data and explain some of the information in the statements. The required supplementary information provides further explanations and provides additional support for the financial statements. A comparison of the District's budget for the year is included.

Reporting the District as a Whole

The District as a whole is reported in the Government-wide statements and uses accounting methods similar to those used by companies in the private sector. All the District's assets and liabilities are included in the Statement of Net Assets. The Statement of Activities reports all of the current year's revenues and expenses regardless of when cash is received or paid.

The District financial health or position (net assets) can be measured by taking the difference between the District's assets and liabilities.

D Increases or decreases in the net assets of the District over time are indicators of whether its financial position is improving or deteriorating, respectively.

D Additional non-financial factors such as the condition of school buildings and other facilities, and changes in the property tax base of the District need to be considered in assessing the overall health of the District.

In the Statement of Net Assets and the Statement of Activities, we divide the District into two kinds of activities:

4





THE FINANCIAL REPORT (CONCLUDED)

Reporting the District as a Whole (Concluded)

Governmental Activities:

The basic services provided by the District, such as regular and special education, administration, and transportation are included here, and are primarily financed by property taxes and state formula aid. Non-basic services, such as child nutrition are also included here, but are financed by a combination of state and federal contract and grants, and local revenues.

Business-type Activities:

The District does not provide any services that should be included in this category.

Reporting the District Most Significant Funds

The District's fund-based financial statements provide detailed information about the District's most significant funds. Some funds are required to be established by State law and bond covenants. However, the District establishes many other funds as needed to control and manage money for specific purposes.

Governmental Funds:

The major governmental funds of Roseville City School District are the General Fund and Developer Fees Fund. Governmental fund reporting focuses on how money flows into and out of the funds and the balances that remain at the end of the year. A modified accrual basis of accounting 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 District's operations and services. Governmental fund information helps determine the level of financial resources available in the near future to finance the District's programs.

Proprietary Funds:

Services for which the District charges a fee are generally reported in proprietary funds on a full accrual basis. These include both Enterprise funds and Internal .Service funds. Enterprise funds are considered business-type activities and are also reported under a full accrual method. This is the same basis as business-type activities; therefore no reconciling entries are required. Internal service funds are reported with Governmental Funds. The District has no funds of this type.

Fiduciary Funds:

The District is the trustee, or fiduciary, for its scholarship and student activity funds. All of the District's fiduciary activities are reported in separate fiduciary statements. We exclude these activities from the District's other financial statements because the District cannot use these assets to finance their operations. The District is responsible for ensuring that the assets reported in these funds are used for their intended purposes.

5

Comparative Statement of Net Assets


2010 2011

Assets Deposits and Investments $ 38,581,159 $ 36,866,928 Receivables 28,557,808 33,159,573 Inventory 39,555 45,611 Prepaid Expenses 909,607 1,079,026 Capital Assets, net 208,321,245 203,919,625

Total Assets 276,409,374 275,070,763

Liabilities Current 19,031,790 20,945,469 Long-Term 85,199,931 82,253,110

Total Liabilities 104,231,721 103,198,579

Net Assets Invested in Capital Assets

- Net of Related Debt 139,949,259 139,006,160 Restricted for Capital Projects 40,114,625 39,141,424 Restricted for Debt Service (15,775,358) (15,356,769) Restricted for Educational Programs 1,503,583 1,134,788 Restricted for Other Purposes * 521,032 721,246 Unrestricted * 5,864,512 7,225,335

Total Net Assets $ 172,177,653 $ 171,872,184

Table includes financial data of the combined governmental funds

" The prior year balances have been adjusted to ensure comparability





FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE

GOVERNMENTAL ACTIVITIES

The District's net assets decreased from $172,177,653 at June 30, 2010 to $171,872,184 at June 30, 2011, or 0.2%.

The deficit balance presented above for Restricted for Debt Service represents the difference between the obligation for accumulated accreted interest on the District's outstanding capital appreciation bonds and amounts available in the Bond Interest and Redemption Fund. The deficit will be eliminated by future property tax collections.

The District invested $474,811 in capital assets in 2010-11, disposed of assets with a book value of $7,196, and recognized depreciation expense of $4,869,235, which resulted in a decrease to total capital assets, net of depreciation by $4,401,620 compared to 2009-10.

6

Comparative Statement of Changes in Net Assets


2010 2011

Program Revenues Charges for Services $ 2,345,420 $ 2,282,849 Operating Grants and Contributions 10,113,874 11,305,274 Capital Grants and Contributions 20,072 6,408

General Revenues Taxes Levied 32,967,527 30,957,944 Federal and State Aid 25,362,788 31,146,449 Interest and Investment Earnings 800,802 311,620 Miscellaneous 2,513,414 2,911,697

Total Revenues 74,123,897 78,922,241

Expenses Instruction 48,611,645 49,013,026 Instruction-Related Services 5,699,603 5,368,483 Pupil Services 9,356,677 9,725,680 General Administration 3,110,011 3,025,737 Plant Services 6,956,468 7,120,285 Ancillary Services 73,196 71,522 Interest on Long-Term Debt 3,694,300 3,615,581 Other Outgo 1,132,292 1,287,396

Total Expenses 78,634,192 79,227,710

Changes in Net Assets $ (4,510,295) $ (305,469)



MANAGEMENTS DISCUSSION AND ANALYSIS (UNAUDITED)



FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE (CONTINUED)

GOVERNMENTAL ACTIVITIES (CONTINUED)

Overall revenues increased $4,798,344 (6.5%) mainly due to the following:

• $3,982,037 increase in revenue limit funding due to an increase in the District's ADA and due to the elimination of the one-time ABX4 3 ADA reduction of $2,268,465

• $85,165 increase in developer/redevelopment fees • $647,485 increase in taxes levied for debt service • $178,958 increase in cafeteria revenues

Total program expenses increased $593,518 (0.7%) during fiscal year 2010-11.

7







The table below presents the cost of major District activities. The table also shows each activity's cost (total cost less fees generated by the activities and intergovernmental aid provided for specific programs). The $65,633,179 net cost represents the financial burden that was placed on the District's general revenues for providing the services listed below. Further detail is available on page 15 of this report.

Comparative Schedule of Costs of Services

Total Cost of Services Net Cost of Services

2010 2011 2010 2011

Instruction $ 48,611,645 $ 49,013,026 $ 43,187,447 $ 43,449,107

Instruction-Related Services 5,699,603 5,368,483 5,347,996 4,974,768

Pupil Services 9,356,677 9,725,680 3,407,533 3,704,410

General Administration 3,110,011 3,025,737 2,843,793 2,761,104

Plant Services 6,956,468 7,120,285 6,863,191 6,852,685

Ancillary Services 73,196 71,522 73,196 71,522

Interest on Long-Term Debt 3,694,300 3,615,581 3,694,300 3,615,581

Other Outgo 1,132,292 1,287,396 737,370 204,002

Totals $ 78,634,192 $ 79,227,710 66,154,826 $ 65,633,179


Program revenues financed 17% of the total cost of providing the services listed above, while the remaining 83% was financed by the general funds of the District.

8

Schedule of Revenues For Governmental Functions

Program Revenues

FYE 2010 Amount

Percent of Total

FYE 2011 Amount

Percent of Total

Charges for Services $ 2,345,420 3.16% $ 2,282,849 2.89% Operating Grants & Contributions 10,113,874 13.64% 11,305,274 14.32% Capital Grants & Contributions 20,072 0.03% 6,408 0.01%

General Revenues Taxes Levied 32,967,527 44.48% 30,957,944 39.23% Federal & State Aid 25,362,788 34.22% 31,146,449 39.46% Interest & Investment Earnings 800,802 1.08% 311,620 0.39% Miscellaneous 2,513,414 3.39% 2,911,697 3.69%

Total Revenues $ 74,123,897 100.00% $ 78,922,241 100.00%


FYE 11 Revenues

Federal & State Aid

40% Capital Grants & Contributions

0%

Taxes Levied 39%

Operating Grants &

Contributions 14%

Charges for Services

3% Miscellaneous

4%

Interest& Investment Earnings

0%







9

Schedule of Expenses For Governmental Functions

Expenses

FYE 2010 Amount

Percent of Total

FYE 2011 Amount

Percent of Total

Instruction $ 48,611,645 61.82% $ 49,013,026 61.86% Instruction-Related Services 5,699,603 7.25% 5,368,483 6.78% Pupil Services 9,356,677 11.90% 9,725,680 12.28% General Administration 3,110,011 3.96% 3,025,737 3.82% Plant Services 6,956,468 8.85% 7,120,285 8.99% Other Expenses 4,899,788 6.23% 4,974,499 6.28%

Total Expenses $ 78,634,192 100.00% $ 79,227,710 100.00%


FYE 11 Expenses

Instruction ---------- 62%

Other Expenses

6%


4% Pupil Services

12%

Instruction- Related Services

7%

Plant Services 9%


MANAGEMENTS DISCUSSION AND ANALYSIS (UNAUDITED)





10

Comparative Schedule of Capital Assets


2010 2011

Land $ 37,484,239 $ 37,484,239 Sites and Improvements 12,747,913 12,823,056 Buildings and Improvements 191,132,895 191,223,629 Furniture and Equipment 2,943,343 3,040,090 Work in Progress 743,094 908,147

Subtotals 245,051,484 245,479,161

Less: Accumulated Depreciation (36,730,239) (41,559,536)

Capital Assets, net $ 208,321,245 $ 203,919,625

Comparative Schedule of Long - Term Liabilities


2010 2011

Compensated Absences $ 75,918 $ 91,740 General Obligation Bonds 53,268,351 51,573,519 Certificates of Participation 13,515,000 12,810,000 Capital Leases 205,000 540,408 Deferred Obligation 20,396,114 19,390,906 Early Retirement Incentives 1,555,401 2,042,455 Other Post Employment Benefits 1,080,423 1,535,261

Totals $ 90,096,207 $ 87,984,289







CAPITAL ASSETS

Capital assets, net of depreciation, decreased by $4,401,620 primarily due to accumulated depreciation growing at a faster rate than acquisitions and improvements.

OUTSTANDING DEBT AT YEAR END

11





FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE (CONCLUDED)

GOVERNMENTAL ACTIVITIES (CONCLUDED)

OUTSTANDING DEBT AT YEAR END (CONCLUDED)

The general obligation bonds are financed by the local taxpayers through voter-approved elections and represent 59% of the District's long-term debt. The liability for the certificates of participation represents 15% of the District's long-term debt and will be paid by developer fees. The deferred obligation represents 22% of the District's long-term debt; the amount will be financed by future developer fee revenue. The remaining portion of long-term debt, which will be paid from the General Fund, consists of a capital bus lease and two computer equipment leases, the District's share of early retirement incentive payments, the value of the vacation earned, but not taken as of June 30, 2011, and the Governmental Accounting Standards Board Statement 45 other post employment benefit obligation. The District has continued to meet the debt service requirements of all its long-term debt.

The notes to the financial statements are an integral part of the financial presentation and contain more detailed information as to interest, principal, retirement amounts, and future debt retirement dates.

FINANCIAL ANALYSIS OF DISTRICT'S FUNDS

Comparative Schedule of Fund Balances

Fund Balances June 30, 2010

Fund Balances June 30, 2011

Increase (Decrease)

General* $ 9,606,733 $ 11,929,458 $ 2,322,725 Developer Fees 18,690,416 18,373,591 (316,825) Cafeteria 968,951 1,183,775 214,824 Bond Interest & Redemption 4,007,723 4,421,461 413,738 County School Facilities 1,028,095 1,376,927 348,832

Totals $ 34,301,918 $ 37,285,212 $ 2,983,294

* The prior year balance has been adjusted to ensure comparability (see Note 21).

The combined fund balances of all funds increased by $2,983,294 primarily due to: (1) an increase in reserves in the General Fund established for the purpose of maintaining District programs during the current State budget crisis; (2) an increase in taxes levied for debt service; and (3) an increase in reserves to purchase furniture for the opening of Barbara Chilton Middle School.

12





GENERAL FUND BUDGETARY HIGHLIGHTS

The District's budget is prepared in accordance with California law and is based on the modified accrual basis of accounting. Over the course of the year, the District revises its budget based on updated financial information. The original budget, approved in June for July 1, is based on May Revise figures and updated 45 days after the State approves its final budget. In addition, the District revises its budget at First and Second Interim. The Original budget presented on page 47 includes only new revenues for 2010-11. During the budget revision process the District accounts for prior year restricted balances by budgeting to use the carryover.

ECONOMIC FACTORS BEARING ON THE DISTRICT'S FUTURE

In the past ten years (2001-02 through 2010-11) the student enrollment growth in the district averaged 4.8% per year. To be conservative, the RCSD projected enrollment growth of 2% for 2011-2012. The actual enrollment growth for 2011-2012 is 0.8%, much lower than the previous years. The District was able to mitigate the reduction in projected income due to the lower enrollment growth by not filling open teaching positions budgeted. The District will look very closely at projecting 0% growth for the next few years, until it is clear if this is a new trend.

Even though district-wide enrollment growth is down this year, the West Roseville Specific Plan area continues to grow. The District currently has two schools in this area, Junction Elementary School and Barbara Chilton Middle School. Junction Elementary School was opened in 2008-2009, and Barbara Chilton Middle School is scheduled to open in 2012-2013. The construction of the next school in this area is tentatively scheduled to begin in spring, 2012.

The California State Budget Act, signed on June 30, 2011, provides for "flat funding" for K-12 education, but also includes "trigger language" if state revenues fall short of projections. The trigger language would only be enacted if State revenues fall $2 - $4 billion less than projected. The worst case scenario for school districts if the trigger language is enacted is a reduction of $250/per ADA, and a reduction of 50% of the Home to School Transportation funds. This would be a mid-year reduction of $2.5 million for the Roseville City School District. The District is currently projecting $4.1 million in reserves, which could be used to mitigate the mid year revenue reduction. This reserve would allow the District time to thoughtfully plan for further reductions for 2012-13.

CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, taxpayers, parents, investors, and creditors with a general overview of the District's finances and to show the District's accountability for the money it receives. If you have questions regarding this report or need additional financial information, contact Julie Olson, Assistant Superintendent of Business Services, Roseville City School District, 1050 Main Street, Roseville, CA 95678.

13

ROSEVILLE CITY SCHOOL DISTRICT STATEMENT OF NET ASSETS

JUNE 30, 2011


Assets Deposits and Investments (Note 2) $ 36,866,928 Receivables (Note 4) 33,159,573 Stores Inventory (Note 1J) 45,611

Prepaid Expenses (Note 1J) 1,079,026 Capital Assets: (Note 6)

Land 37,484,239 Sites and Improvements 12,823,056 Buildings and Improvements 191,223,629 Furniture and Equipment 3,040,090 Work-in-Progress 908,147

Less: Accumulated Depreciation (41,559,536)

Total Assets 275,070,763

Liabilities Accounts Payable and Other Current Liabilities 3,853,816 Current Loans 9,000,000 Deferred Revenue (Note 1J) 2,360,474 Long-Term Liabilities: Portion Due or Payable Within One Year:

Compensated Absences (Note 1J) 91,740 General Obligation Bonds

Current Interest 890,000 Capital Appreciation 3,115,000

Certificates of Participation 740,000 Capital Leases 145,430 Early Retirement Incentives 395,627 Other Post Employment Benefits 353,382

Portion Due or Payable After One Year: General Obligation Bonds (Note 7)

Current Interest 18,665,000

Capital Appreciation 28,903,519 Certificates of Participation (Note 8) 12,070,000 Capital Leases (Note 9) 394,978 Deferred Obligation (Note 10) 19,390,906 Early Retirement Incentives (Note 11) 1,646,828 Other Post Employment Benefits (Note 12) 1,181,879

Total Liabilities 103,198,579

Net Assets Investment in Capital Assets, Net of Related Debt 139,006,160 Restricted: For Capital Projects 39,141,424 For Debt Service (15,356,769) For Educational Programs 1,134,788

For Other Purposes 721,246 Unrestricted 7,225,335

Total Net Assets $ 171,872,184

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS

14

ROSEVILLE CITY SCHOOL DISTRICT STATEMENT OF ACTIVITIES


Program Revenues

Net (Expense) Revenue and Changes in Net Assets

Functions

Expenses

Charges for Services

Operating Grants

and Contributions

Capital Grants

and Governmental Contributions Activities


Instruction $ 49,013,026 $ 5,557,511 $ 6,408 $ (43,449,107) Instruction-Related Services:

Supervision of Instruction 512,470 255,404 (257,066)

Instructional Library and Technology 463,293 17,067 (446,226)

School Site Administration 4,392,720 121,244 (4,271,476)

Pupil Services:

Home-to-School Transportation 1,481,569 $ 91,024 260,635 (1,129,910)

Food Services 4,588,335 2,061,699 2,715,776 189,140

Other Pupil Services 3,655,776 892,136 (2,763,640)

General Administration:

Data Processing Services 641,872 (641,872)

Other General Administration 2,383,865 92,493 172,140 (2,119,232)

Plant Services 7,120,285 37,633 229,967 (6,852,685)

Ancillary Services 71,522 (71,522)

Interest on Long-Term Debt 3,615,681 (3,615,581)

Other Outgo 1,287,396 1,083,394 (204,002)

Total Governmental Activities $ 79,227,710 $ 2,282,849 $ 11,305,274 $ 6,408 (65,633,179)

General Revenues Taxes Levied for General Purposes 25,732,446

Taxes Levied for Debt Service 4,975,288

Taxes Levied for Specific Purposes 250,210

Federal and State Aid - Unrestricted 31,146,449

Interest and Investment Earnings 311,620

Miscellaneous 2,911,697

Total General Revenues 65,327,710

Change in Net Assets (305,469)

Net Assets - July 1, 2010 172,177,653

Net Assets - June 30, 2011 $171,872,184


15

ROSEVILLE CITY SCHOOL DISTRICT BALANCE SHEET

GOVERNMENTAL FUNDS

JUNE 30, 2011

Assets General

Developer Fees

Non-Major Governmental

Funds

Total Governmental

Funds

Deposits and Investments (Note 2) $ 11,399,054 $ 18,244,989 $ 7,222,885 $ 36,866,928

Receivables (Note 4) 13,214,960 19,502,094 442,619 33,159,573

Due from Other Funds (Note 5) 288,781 22,932 4,440 316,153

Stores Inventory (Note 1J) 45,611 45,611

Prepaid Expenditures (Note 1J) 643,235 22,400 665,635

Total Assets $ 25,546,030 $ 37,770,015 $ 7,737,855 $ 71,053,900

Liabilities and Fund Balances Liabilities: Accounts Payable $ 2,866,729 $ 5,518 $ 386,955 $ 3,258,202

Due to Other Funds (Note 5) 4,440 311,713 316,153

Current Loans 9,000,000 9,000,000

Deferred Revenue (Note 1J) 1,746,403 19,390,906 67,024 21,194,333

Total Liabilities 13,616,572 19,396,424 755,692 33,768,688

Fund Balances: (Note 14) Nonspendable 653,235 68,011 721,246

Restricted 1,134,788 18,373,591 5,798,388 25,306,767

Assigned 2,547,651 1,116,764 3,663,415

Unassigned 7,593,784 7,593,784

Total Fund Balances 11,929,458 18,373,591 6,982,163 37,285,212

Total Liabilities and Fund Balances $ 25,546,030 $ 37,770,015 $ 7,737,855 $ 71,053,900


16

ROSEVILLE CITY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE

STATEMENT OF NET ASSETS FOR THE FISCAL YEAR ENDED JUNE 30, 201'1

Total Fund Balances - Governmental Funds $ 37,285,212

Amounts reported for governmental activities in the statement of net assets are different from amounts reported in governmental funds due to the following:

Capital assets: In governmental funds, only current assets are reported. In the statement of net assets, all assets are reported, including capital assets and accumulated depreciation. Capital assets and accumulated depreciation are:

Capital Assets $ 245,479,161 Accumulated Depreciation (41,559,536)

Net 203,919,625

Unamortized costs: In governmental funds, debt issuance costs are recognized as expenditures in the period they are incurred. In the government-wide statements, debt issuance costs are amortized over the life of the debt. Unamortized debt issue costs included in prepaid expense on the statement of net assets are:

Deferred Charges - Cost of Issuance 413,391

Unamortized premiums: In governmental funds, bond premiums are recognized as revenues in the period they are received. In the government-wide statements, premiums are amortized over the life of the debt. Unamortized premiums at year-end consist of:

Deferred Asset - Bond premiums

(557,047)

Deferred recognition of earned but unavailable revenues: In governmental funds, revenue is recognized only to the extent that it is "available," meaning it will be collected soon enough after the end of the period to finance expenditures of that period. Receivables for revenues that are earned but unavailable are deferred until the period in which the revenues become available. In the government-wide statements, revenue is recognized when earned, regardless of availability. The amount of unavailable revenues that were deferred as a liability in governmental funds, but are recognized in the government-wide statements is: 19,390,906

Long-term liabilities: In governmental funds, only current liabilities are reported. In the statement of net assets, all liabilities, including long-term liabilities, are reported. Long-term liabilities relating to governmental activities consist of:

Compensated Absences $ 91,740 General Obligation Bonds:

Current Interest 19,555,000 Capital Appreciation 32,018,519

Certificates of Participation 12,810,000 Capital Lease 540,408 Deferred Obligation 19,390,906 Early Retirement Incentives 2,042,455 Other Post Employment Benefits 1,535,261

Total

Unmatured interest on long-term debt: In governmental funds, interest on long-term debt is not recognized until the period in which it matures and is paid. In the government-wide statements of activities, it is recognized in the period that it is incurred. The additional liability for unmatured interest owing at the end of the period was:

Total Net Assets - Governmental Activities

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART or THESE STATEMENTS

17

(87,984,289)

(595,614)

$ 171,872,184


STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2011

Revenues General

Developer Fees


Funds

Total Governmental

Funds

Revenue Limit Sources: State Apportionment $ 23,427,245 $ 23,427,245 Local Taxes 25,732,446 25,732,446

Total Revenue Limit Sources 49,159,691 49,159,691

Federal Revenue 3,926,519 $ 2,641,167 6,667,686

State Revenue 8,799,352 264,893 9,064,245

Local Revenue 4,323,924 $ 3,644,419 7,192,669 15,161,012

Total Revenues 66,209,486 3,644,419 10,098,729 79,952,634

Expenditures Instruction 43,356,742 43,356,742 Supervision of Instruction 510,976 510,976

Instructional Library and Technology 463,364 463,364 School Site Administration 4,392,637 4,392,637 Home-To-School Transportation 1,432,834 1,432,834

Food Services 4,557,935 4,557,935 Other Pupil Services 3,562,995 3,562,995

Data Processing Services 631,769 631,769

Other General Administration 1,925,862 205,264 2,131,126

Plant Services 5,835,171 441,391 1,819,455 8,096,017

Facilities Acquisition and Construction 323,579 29,318 96,918 449,815

Ancillary Services 71,522 71,522

Debt Service: Principal Retirement 456,983 705,000 3,630,000 4,791,983 Interest and Issuance Costs 106,254 627,723 969,575 1,703,552

Other Outgo 1,295,589 1,295,589

Total Expenditures 64,366,277 1,803,432 11,279,147 77,448,856

Excess of Revenues Over (Under) Expenditures 1,843,209 1,840,987 (1,180,418) 2,503,778

Other Financing Sources (Uses) Operating Transfers In 2,157,812 2,157,812

Operating Transfers Out (2,157,812) (2,157,812)

Other Sources 479,516 479,516

Total Other Financing

Sources (Uses) 479,516 (2,157,812) 2,157,812 479,516

Net Change in Fund Balances 2,322,725 (316,825) 977,394 2,983,294

Fund Balances - July 1, 2010 (Note 21) 9,606,733 18,690,416 6,004,769 34,301,918

Fund Balances - June 30, 2011 $ 11,929,458 $ 18,373,591 $ 6,982,163 $ 37,285,212


18

ROSEVILLE CITY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2011

Net Change in Fund Balances - Governmental Funds $ 2,983,294

Amounts reported for governmental activities in the statement of activities are different from amounts reported in governmental funds due to the following:

Capital outlay: in governmental funds, the costs of capital assets are reported as expenditures in the period when the assets are acquired. In the statement of activities, costs of capital assets are allocated over their useful lives as depreciation expense. The difference between capital outlay expenditures and depreciation expense for the period is:

Capital Outlay Expenditures $ 474,811 Depreciation Expense (4,869,235)

Net (4,394,424)

Debt service: In governmental funds, repayments of long-term debt are reported as expenditures. In the government-wide statements, repayments of long-term debt are reported as reductions of liabilities. Expenditures for repayment of the principal portion of long-term debt were: 4,479,108

Debt proceeds: In governmental funds, proceeds from debt are recognized as Other Financing Sources. In the government-wide statements, proceeds from debt are reported as increases to liabilities. Amounts recognized in governmental funds as proceeds from debt, net of issue premiums or discounts, were: (479,516) Debt issue costs: In governmental funds, debt issue costs are recognized as expenditures in the period they are incurred. In the government-wide statements, issue costs are amortized over the life of the debt. The issue costs amortized for the period are: (24,739) Bond premiums: In governmental funds, bond premiums are recognized as Other Financing Sources in the period they are received. In the government-wide statements, bond premiums are amortized over the life of the debt. The premiums amortized for the period are:

Gain or loss on disposal of capital assets: In governmental funds, the entire proceeds from the disposal of capital assets are reported as revenue. In the statement of activities, only the resulting gain or loss is reported. The difference between the proceeds from the disposal of capital assets and the resulting gain or loss is:

Earned but unavailable revenues: In governmental funds, revenues are recognized only to the extent that they are "available," meaning they will be collected soon enough after the end of the period to finance expenditures of that period. in government-wide statements, revenue is recognized when earned regardless of availability. The amount of earned but unavailable revenues relating to the current period, less revenues that became available in the current period, but related to a prior period is:

Unmatured interest on long-term debt: In governmental funds, interest on long-term debt is recognized as an expenditure in the period that it becomes due. In the government-wide statements, it is recognized in the period incurred. Unmatured interest owing at the end of the period, less matured interest paid during the period but owing from a prior period, was:

Compensated absences: In governmental funds, compensated absences are measured by the amounts paid during the period. In the statement of activities, compensated absences are measured by the amounts earned. The difference between compensated absences paid and compensated absences earned was:

Early Retirement Incentives: In governmental funds, early retirement incentives are measured by the amounts paid during the period. In the statement of activities, early retirement incentives are measured by the amounts earned. The difference between early retirement incentives paid and early retirement incentives earned was:

32,932

(7,196)

(25,185)

(1,912,029)

(15,822)

(487,054)

Post employment benefits other than pensions (OPEB): In governmental funds, OPEB costs are recognized when employer contributions are made. In the statement of activities, OPEB costs are recognized on the accrual basis. This year, the difference between OPEB costs and actual employer contributions was: (454,838)

Change in Net Assets of Governmental Activities $ (305,469)


19



FIDUCIARY FUNDS

JUNE 30, 2011

Assets

Private-Purpose Trust

Agency Funds

Total

Fiduciary Funds

Scholarship Funds

Deposits and Investments (Note 2) $ 97,388 $ 157,035 $ 254,423

Total Assets 97,388 157,035 254,423

Liabilities Accounts Payable 2,533 2,533

Due to Student Groups 157,035 157,035

Total Liabilities 2,533 157,035 159,568

Net Assets Restricted 94,855 0 94,855

Total Net Assets $ 94,855 $ 0 $ 94,855


20

ROSEVILLE CITY SCHOOL DISTRICT STATEMENT OF CHANGES IN NET ASSETS

FIDUCIARY FUNDS


Additions

Private-Purpose Trust

Scholarship Funds

$ 1,085 Interest

Total Additions 1,085

Deductions

Certificated Salaries 2,200

Employee Benefits 267

Books and Supplies 2,533

Contract Services 100

Total Deductions 5,1130

Change in Net Assets (4,015)

Net Assets

Net Assets-July 1, 2010 98,870

Net Assets - June 30, 2011 $ 94,855


21


NOTES TO THE BASIC FINANCIAL STATEMENTS


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

A. Accounting Policies

The Roseville City School District (the "District") is a public educational agency operating under the applicable laws and regulations of the State of California. It is governed by a five member Board of Education elected by registered voters of the District, which comprises an area in Placer County. The District was established in 1869 and serves students in kindergarten through eighth grade.

The District prepares its financial statements in accordance with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants (AICPA) and complies with the policies and procedures of the Department of Education's California School Accounting Manual.

Governments are also required to follow the pronouncements of the Financial Accounting Standards Board (FASB) issued through November 30, 1989 (when applicable) that do not conflict with or contradict GASB pronouncements.

B. Reporting Entity

The District and the Roseville City Schools Public Financing Corporation (the "Corporation") have a financial and operational relationship that meets the reporting entity definition criteria of GASB Statement No. 14, The Financial Reporting Entity, for inclusion of the Corporation as a component unit of the District. Accordingly, the financial activities of the Corporation have been included in the financial statements of the District.

The following are those aspects of the relationship between the District and the Corporation that satisfy GASB Statement No. 14 criteria:

Accountability

• The Corporation's Board of Directors was appointed by the District's Board of Education.

• The Corporation has no employees. The District's Superintendent and the Assistant Superintendent - Business Services function as agents of the Corporation. Neither individual receives additional compensation for work performed in this capacity.

• The District exercises significant influence over operations of the Corporation as the District will always be the sole lessee of all facilities owned by the Corporation.

• All major financing arrangements, contracts, and financial transactions of the Corporation must have the consent of the District.

• Any deficits incurred by the Corporation will be reflected in the lease payments of the District. Any surpluses of the Corporation revert to the District at the end of the lease period.

• The District's lease payments will be the sole revenue source of the Corporation.

• The District has assumed a "moral obligation", and potentially a legal obligation, for any debt incurred by the Corporation.

22




NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

B. Reporting Entity (Concluded)

Scope of Public Service

The Corporation is a nonprofit, public benefit corporation, incorporated under the laws of the State of California and recorded by the Secretary of State in January 1990. The Corporation was formed for the sole purpose of providing financial assistance to the District for construction and acquisition of major capital facilities. When the Corporation's Certificates of Participation have been paid with State reimbursements and the District's developer fees, title to all Corporation property will pass to the District for no additional consideration.

Financial Presentation

The Corporation's financial activity is blended with the District's financial data and is presented in the Developer Fees Fund. Certificates of Participation issued by the Corporation are reported as a liability in the Statement of Net Assets.

C. Implementation of New Accounting Pronouncements

The Governmental Accounting Standards Board issued GASB Statement No. 54 (GASB 54), "Fund Balance Reporting and Governmental Fund Type Definition," with required implementation for the District during the year ended June 30, 2011. The objective of GASB 54 is to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. GASB 54 establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The effect of implementing GASB 54 resulted in a reclassification of the beginning fund balances as of July 1, 2010, due to the Deferred Maintenance Fund no longer meeting the fund definition of a special revenue fund. Further detail is provided in Note 21.

D. Basis of Presentation

Government-wide Financial Statements:

The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of Activities) report information on all of the non-fiduciary activities of the District and its component units. The effect of interfund activity within the governmental activities column has been removed from these statements. Governmental activities are normally supported by taxes and intergovernmental revenues. The primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.

The government-wide financial statements are prepared using the economic resources measurement focus. This is the same approach used in the preparation of the proprietary fund and fiduciary fund financial statements but differs from the manner in which governmental fund financial statements are prepared. Governmental fund financial statements, therefore, include a reconciliation with brief explanations to better identify the relationship between the government-wide statements and the statements for the governmental funds.

23





D. Basis of Presentation (Concluded)

Government-wide Financial Statements (Concluded):

The government-wide statement of activities presents a comparison between direct expenses and program revenues for each function or program of the District's governmental activities. Direct expenses are those that are specifically associated with a service, program, or department and are therefore clearly identifiable to a particular function. The District does not allocate indirect expenses to functions in the statement of activities. Program revenues include charges paid by the recipients of goods or services offered by a program, as well as grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues which are not classified as program revenues are presented as general revenues of the District, with certain exceptions. The comparison of direct expenses with program revenues identifies the extent to which each governmental function is self-financing or draws from the general revenues of the District.

Fund Financial Statements: •

Fund financial statements report detailed information about the District. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major governmental fund is presented in a separate column, and all non-major funds are aggregated into one column. Fiduciary funds are reported by fund type.

The accounting and financial treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a flow of current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included on the balance sheet. The Statement of Revenues, Expenditures, and Changes in Fund Balances for these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Fiduciary funds are reported using the economic resources measurement focus.

E. Basis of Accounting

Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Government-wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. Proprietary and fiduciary funds use the accrual basis of accounting.

Revenues — Exchange and Non-exchange Transactions:

Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded under the accrual basis when the exchange takes place. Under the modified accrual basis, revenue is recorded in the fiscal year in which the resources are measurable and become available.

"Available" means the resources will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the District, "available" means collectible within the current period or within 45, 60, 90 days after year-end, depending on the revenue source.

24




NOTE 'I - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

E. Basis of Accounting (Concluded)

Revenues — Exchange and Non-exchange Transactions (Concluded):

However, to achieve comparability of reporting among California districts and so as not to distort normal revenue patterns, with specific respect to reimbursement grants and corrections to state aid apportionments, the California Department of Education has defined available as collectible within one year.

Non-exchange transactions, in which the District receives value without directly giving equal value in return, include property taxes, grants, and entitlements. Under the accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and entitlements is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are to be used or the fiscal year when use is first permitted; matching requirements, in which the District must provide local resources to be used for a specific purpose; and expenditure requirements, in which the resources are provided to the District on a reimbursement basis. Under the modified accrual basis, revenue from non-exchange transactions must also be available before it can be recognized.

Deferred Revenue:

Deferred revenue arises when assets are received before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements are met are recorded as deferred revenue. On governmental fund financial statements, receivables associated with non-exchange transactions that will not be collected within the availability period have also been recorded as deferred revenue.

Expenses/Expenditures:

On an accrual basis of accounting, expenses are recognized at the time a liability is incurred. On the modified accrual basis of accounting, expenditures are generally recognized in the accounting period in which the related fund liability is incurred, as under the accrual basis of accounting. However under the modified accrual basis of accounting, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Allocations of cost, such as depreciation and amortization, are not recognized in the governmental funds.

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

F. Fund Accounting

The accounts of the District are organized on the basis of funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity or retained earnings, revenues, and expenditures or expenses, as appropriate. District resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The District maintains the following governmental fund types:

25





F. Fund Accountinq (Concluded)

General Fund - The general fund is used to account for and report all financial resources not accounted for and reported in another fund.

Special Revenue Funds - Special revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. Other resources also may be reported in the fund if those resources are restricted, committed, or assigned to the specified purpose of the fund.

Debt Service Funds - Debt service funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest.

Capital Projects Funds - Capital projects funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets.

The District's funds are organized into major, non-major, and fiduciary funds as follows:

Major Governmental Funds:

The General Fund is the general operating fund of the District.

The Developer Fees Fund is used to account for resources received from developer impact fees assessed under provisions of the California Environmental Quality Act (CEQA).

Non-major Governmental Funds:

The Cafeteria Fund is used to account for revenues received and expenditures made to operate the District's cafeteria program.

The Bond Interest and Redemption Fund is used to account for District taxes received and expended to pay bond interest and redeem bond principal.

The County School Facilities Fund is used to account for state apportionments received (Education Code Sections 17070.10-17076.10) and expenditures for new school facility construction or modernization projects.

Fiduciary Funds:

Expendable Trust Funds are used to account for assets held by the District as trustee. The District maintains two expendable private-purpose trust funds, collectively the Scholarship Fund, to provide scholarships or financial aid to benefit the students of the District.

Agency Funds are used to account for assets of others for which the District acts as an agent. The District maintains an agency fund for the twelve (12) student body accounts. The District maintains student body funds, which are used to account for the raising and expending of money to promote the general welfare, and educational experience of the student body.

26





G. Budgets and Budgetary Accounting

Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for all governmental funds. By state law, the District's Governing Board must adopt a final budget no later than July 1. A public hearing must be conducted to receive comments prior to adoption. The District's Governing Board satisfied these requirements.

These budgets are revised by the District's Governing Board and Superintendent during the year to give consideration to unanticipated income and expenditures. The original and final revised budget is presented for the General Fund as required supplementary information on page 47.

Formal budgetary integration was employed as a management control device during the year for all budgeted funds. The District employs budget control by minor object and by individual appropriation accounts. Expenditures cannot legally exceed appropriations by major object account (See Note 3).

H. Use of Estimates

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

I. Encumbrances

Encumbrance accounting is used in all budgeted funds to reserve portions of applicable appropriations for which commitments have been made. Encumbrances are recorded for purchase orders, contracts, and other commitments when they are written. Encumbrances are liquidated when the commitments are paid. All encumbrances are liquidated at June 30.

J. Assets, Liabilities and Equity

I. Deposits and Investments

The District is authorized to maintain cash in banks and revolving funds that are insured to $250,000 by the Federal Depository Insurance Corporation (FDIC).

The District is considered to be an involuntary participant in an external investment pool as the District is required to deposit all receipts and collections of monies with their County Treasurer (Education Code Section 41001).

The County is authorized to deposit cash and invest excess funds by California Government Code Section 53648 et seq. The funds maintained by the County are either secured by the FDIC or are collateralized.

27





J. Assets, Liabilities and Equity (Concluded)

1. Deposits and Investments (Concluded)

The District is authorized under California Government Code to make direct investments in local agency bonds, notes, or warrants within the State; U.S. Treasury instruments; registered State warrants or treasury notes; securities of the U.S. Government, or its agencies; bankers acceptances; commercial paper; certificates of deposit placed with commercial banks and/or savings and loan companies; repurchase or reverse repurchase agreements; medium term corporate notes; shares of beneficial interest issued by diversified management companies; certificates of participation; obligations with first priority security; and collateralized mortgage obligations.

Investments with original maturities greater than one year are stated at fair value. Fair value is estimated based on quoted market prices at year-end. All investments not required to be reported at fair value are stated at cost or amortized cost.

2. Inventory and Prepaid Expenses / Expenditures

Inventory is recorded using the consumption method in that inventory acquisitions are initially recorded in inventory asset accounts and are recorded as expenditures when the supplies are used. Inventory is valued at average cost and consists of expendable supplies held for consumption.

The District has the option of reporting an expenditure in governmental funds for prepaid items either when purchased or during the benefiting period. The District has chosen to report the expenditure when incurred. Prepaid expenses also include the costs of issuance associated with the general obligation bonds issued since the implementation of Governmental Accounting Standards Board Statement No. 34 (GASB 34). These costs will be amortized annually over the life of the debt.

Reported inventory and prepaid expenses are equally offset by a net assets reserve, which indicates that these amounts are not "available for appropriation and expenditure" even though they are a component of net current assets.

3. Capital Assets

Furniture and equipment purchased or acquired with an original cost of $5,000 or more are reported at historical cost or estimated historical cost, and capital improvement, acquisition, or construction with an original cost of $50,000 or more are reported at historical cost or estimated historical cost. Contributed assets are reported at fair market value as of the date received. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are capitalized. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend the asset's lives are not capitalized, but are expensed as incurred.

Depreciation on all capital assets is computed using a straight-line basis over the following estimated useful lives:

28





J. Assets, Liabilities and Equity (Continued)

3. Capital Assets (Concluded) .

Asset Class Years

Site and Improvements 20 Buildings and Improvements 20-50 Furniture and Equipment 5-20

4. Deferred Revenue

Cash received for federal and state special projects and programs is recognized as revenue to the extent that qualified expenditures have been incurred. Deferred revenue is recorded to the extent that cash received on specific projects and programs exceeds qualified expenditures.

Deferred revenue on the governmental fund financial statements also includes the amount of developer fee revenue that will be collected in the future to satisfy the deferred obligation that the District incurred to complete construction of the Barbara Chilton Middle School. This revenue is accrued under the accrual basis of accounting, but is required to be deferred until it is available under the modified accrual basis of accounting.

Deferred revenue on the government-wide financial statements includes the premiums associated with general obligation bonds issued since the implementation of Governmental Accounting Standards Board Statement No. 34, and will be amortized over the life of the debt.

5. Compensated Absences

All vacation pay is accrued when incurred in the government-wide financial statements. Accumulated sick leave benefits are not recognized as liabilities of the District. The District's policy is to record sick leave as an operating expense in the period taken, since such benefits do not vest, nor is payment probable; however, unused sick leave is added to the creditable service period for calculation of retirement benefits when the employee retires.

6. Long-term Liabilities

In the government-wide financial statements, long-term obligations are reported as liabilities in the Statement of Net Assets. Premiums and discounts as well as issuance costs are deferred and amortized over the life of the obligation. The liability is reported net of applicable premiums, discounts or issuance costs.

In the fund financial statements, governmental funds recognize premiums and discounts as well as issuance costs, during the period the debt is issued. The face amount of the debt issued, premiums, discounts, or issuance costs is reported as other financing sources or uses.

29





J. Assets, Liabilities and Equity (Continued)

7. Fund Balance

The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy based primarily on the extent to which the District is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. The allowable classifications in the governmental fund financial statements are as follows:

Nonspendable Fund Balance consists of funds that are inherently nonspendable, due to their form or that are legally or contractually required to be maintained intact.

Restricted Fund Balance consists of funds that have limitations on use that are externally enforceable by external parties, constitutional provisions or enabling legislation.

Committed Fund Balance consists of funds that are set aside for a specific purpose by the District's highest level of decision making authority, the Governing Board. The Governing Board may commit fund balance by taking formal action, such as majority vote or resolution, no later than June 30 th; however, the amount can be determined subsequent to the release of the financial statements. The same formal action must be taken by the Governing Board to remove or change the limitations placed on the funds.

Assigned Fund Balance consists of funds that are set aside with the intent to be used for a specific purpose by the District. The Governing Board has delegated authority to assign amounts to be used for a specific purpose to the Assistant Superintendent, Business Services for the purpose of reporting amounts in the annual financial statement.

Unassigned Fund Balance consists of positive net resources of the General Fund in excess of what can properly be classified in the previous four categories. The Board has adopted a minimum fund balance policy consisting of unassigned amounts as follows:

The District will maintain an economic uncertainty reserve of at least 3% of the General Fund operating expenditures (including other financing), to avoid the need for service level reductions in the event of an economic downturn which causes revenues to come in lower than budgeted. The District will maintain an additional District economic uncertainty reserve of at least 2% of total General Fund operating expenditures (including other financing), to avoid the need for service level reductions, to meet cash flow requirements, and to maintain a solid bond rating. These reserves may be increased from time to time in order to address specific anticipated revenue shortfalls (state actions, etc.). In the event that the balance drops below the established minimum, the District will develop a plan to replenish the fund balance to the established minimum level.

The District considers restricted fund balances to have been spent first when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available. Similarly, when an expenditure is incurred for purposes for which amounts in any of the unrestricted classifications of fund balance could be used, the District considers committed amounts to be reduced first, followed by assigned amounts and then unassigned amounts.

30




NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED)

J. Assets, Liabilities and Equity (Concluded)

8. Revenue Limit/Property Tax

The District's revenue limit is received from a combination of local property taxes, state apportionments, and other local sources.

The County of Placer is responsible for assessing, collecting and apportioning property taxes. Taxes are levied for each fiscal year on taxable real and personal property in the county. The levy is based on the assessed values as of the preceding January 1, which is also the lien date. Property taxes on the secured roll are due on November 1 and February 1, and taxes become delinquent after December 10 and April 10, respectively. Property taxes on the unsecured roll are due on the lien date (January 1), and become delinquent if unpaid by August 31.

Secured property taxes are recorded as revenue when apportioned, in the fiscal year of the levy. The county apportions secured property tax revenue in accordance with the alternative method of distribution prescribed by Section 4705 of the California Revenue and Taxation Code. This alternate method provides for crediting each applicable fund with its total secured taxes upon completion of the secured tax roll, approximately October 1 of each year.

The County Auditor reports the amount of the District's allocated property tax revenue to the California Department of Education. Property taxes are recorded as local revenue limit sources by the District.

The District's base revenue limit is the amount of general purpose tax revenue, per average daily attendance (ADA), that the District is entitled to by law.

This amount is multiplied by the applicable attendance period ADA to derive the District's total entitlement. The California Department of Education reduces the District's total entitlement by the District's local property tax revenue. The balance is paid from the State General Fund, and is known as the state apportionment.

NOTE 2- DEPOSITS AND INVESTMENTS

Summary of Deposits and Investments

Deposits and investments as of June 30, 2011, consist of the following:


Fiduciary Activities

Cash on Hand and in Banks $ 200 $ 247,668 Cash in Revolving Funds 10,000 Cash with Fiscal Agent 9,204,842 County Pool Investments 27,651,886 6,755

Total Deposits and Investments $ 36,866,928 $ 254,423

31




NOTE 2- DEPOSITS AND INVESTMENTS (CONTINUED)

Cash on Hand and in Banks

Cash on hand and in banks consists of all cash held by the District and all cash maintained in commercial bank accounts owned by the District, exclusive of amounts held in revolving funds.

Cash in Revolving Funds

Cash in revolving funds consist of all cash maintained in commercial bank accounts that are used as revolving funds as well as petty cash funds.

Cash with Fiscal Agent

Cash with fiscal agent consists of $9,204,842, which will be used to repay the tax revenue anticipation notes on September 1, 2011.

County Pool Investments

County pool investments consist of District cash held by the Placer County Treasury that is invested in the county investment pool. The fair value of the District's investment in the pool is reported in the financial statements at amounts that are based upon the District's pro-rata share of the fair value provided by the County Treasurer for the entire portfolio (in relation to the amortized cost of that portfolio).

General Authorization

Limitations as they relate to interest rate risk, credit risk, and concentration of credit risk are indicated in the following schedule:

Authorized

Investment Type

Maximum

Remaining

Maturity

Maximum

Percentage

of Portfolio

Maximum

Investment

in One Issuer

Local Agency Bonds, Notes, Warrants 5 years None None

Registered State Bonds, Notes, Warrants 5 years None None

U.S. Treasury Obligations/Securities 5 years None None

Banker's Acceptance 180 days 40% 30%

Commercial Paper 270 days 25% 10%

Negotiable Certificates of Deposit 5 years 30% None

Repurchase Agreements 1 year None None

Reverse Repurchase Agreements 92 days 20% of base None

Medium-Term Notes 5 years 30% None

Mutual Funds/Money Market Mutual Funds N/A 20% 10%

Mortgage Pass-Through Securities 5 years 20% None

County Pooled Investment N/A None None

Local Agency Investment Fund N/A None None

Joint Powers Authority Pools N/A None None

32




NOTE 2- DEPOSITS AND INVESTMENTS (CONTINUED)

Interest Rate Risk

Interest rate risk is the risk that changes in market interest rate will adversely affect the fair value of an investment. Generally, as the length of the maturity of an investment increases, the greater the sensitivity of its fair value to changes in market interest rates. The District manages its exposure to interest rate risk by investing in the County Treasury that purchases a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Segmented Time Distribution

Information about the sensitivity of the fair value of the District's investment to market interest rate fluctuations is provided by the following schedule that shows the distribution of the District's investment by maturity:


Investment Tvoe Carrying

Value Fair

Value Less Than

1 Year More Than

1 Year


Fiduciary Activities:

Investment Type

$ 27,651,886

Carrying Value

$ 27,811,773

Fair Value

$ 9,509,113

Less Than 1 Year

$ 18,142,773

More Than 1 Year


Credit Risk

$ 6,755 $ 6,794 $ 2,323 $ 4,432

Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Following is the minimum rating required by the California Government Code, the District's investment policy, or debt agreements, and the actual rating as of the year-end for each investment type.


Carrying Fair Rating as of Year End Investment Type Value Value AAA Aa Unrated

County Pool Investments $ 27,651,886 $ 27,811,773 $ 27,651,886

Fiduciary Activities:

Carrying Fair Rating as of Year End Investment Type Value Value AAA Aa Unrated

County Pool Investments $ 6,755 $ 6,794 $ 6,755

33




NOTE 2- DEPOSITS AND INVESTMENTS (CONCLUDED)


The investment policy of the District contains no limitations on the amount that can be invested in any one issuer beyond the amount stipulated by the California Government Code. However, the District does not hold any investments in any one issuer, at year-end, that represents five percent or more of the total investments held by the District.

Custodial Credit Risk - Deposits

This is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The District does not have a policy for custodial credit risk for deposits. However, the California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure public deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits and letters of credit issued by the Federal Home Loan Bank of San Francisco having a value of 105 percent of the secured deposits.

Custodial Credit Risk - Investments

This is the risk that in the event of the failure of the counterparty, the District will not be able to recover the value of its investments or collateral securities that are in possession of an outside party. The District does not have a policy limiting the amount of securities that can be held by counterparties. As of June 30, 2011, the District does not have any investments that are held by counterparties.

NOTE 3- EXCESS OF EXPENDITURES OVER APPROPRIATIONS

There was no excess of expenditures over appropriations in the General Fund in 2010-11.

NOTE 4- RECEIVABLES

Receivables at June 30, 2011 consist of the following:

A. Short-Term Receivables

General Fund

Developer Fees Fund


Funds Totals

Federal Government $ 710,306 $ 369,832 $ 1,080,138 State Government 11,354,360 30,320 11,384,680 Local Governments 759,069 759,069 Interest 5,951 5,951 Miscellaneous 391,225 $ 111,188 36,416 538,829

Totals $ 13,214,960 $ 111,188 $ 442,519 $ 13,768,667

34




NOTE 4— RECEIVABLES (CONCLUDED)

B. Long-Term Receivable

The $19,390,906 long-term receivable balance in the Developer Fees Fund represents the amount of future school impact fees to be collected, which have been committed to satisfy the deferred obligation described in Note 10.

NOTE 5- INTERFUND ACTIVITIES

lnterfund transactions are reported as either loans, services provided, reimbursements, or transfers. Loans are reported as interfund receivables and payables, as appropriate, and are subject to elimination upon consolidation. Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures. Reimbursements occur when one fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers.

A. Due From/Due To Other Funds

Individual fund interfund receivable and payable balances at June 30, 2011 are as follows:

Funds Interfund

Receivables Interfund Payables

General $ 288,781 $ 4,440 Developer Fees 22,932 Cafeteria 4,440 288,781 County School Facilities 22,932

Totals $ 316,153 $ 316.153

All interfund receivables and payables are scheduled to be paid within one year.

B. Interfund Transfers

Interfund transfers consist of operating transfers from funds receiving revenue to funds through which the resources are to be expended.

Interfund transfers for fiscal year 2010-11 were as follows:

Funds Transfers In Transfers Out

Developer Fees $ 2,157,812 County School Facilities $ 2,157,812

Totals $ 2.157.812 $ 2.157,812

Transfer $2,157,812 from the Developer Fees Fund to the County School Facilities Fund for funds received for the Barbara Chilton Middle School.

35




NOTE 6- CAPITAL ASSETS AND DEPRECIATION

Capital asset activity for the year ended June 30, 2011, is shown below:

Land

Balances

July 1, 2010 Additions Deletions

Balances

June 30, 2011

$ 37,484,239 $ 37,484,239 Sites and Improvements 12,747,913 $ 75,143 12,823,056 Buildings and Improvements 191,132,895 90,734 191,223,629 Furniture and Equipment 2,943,343 143,881 $ 47,134 3,040,090 Work-in-Progress 743,094 330,931 165,878 908,147

Totals at Historical Cost 245,051,484 640,689 213,012 245,479,161

Less Accumulated Depreciation for: Sites and Improvements 2,218,650 642,649 2,861,299 Buildings and Improvements 32,846,890 3,966,820 36,813,710 Furniture and Equipment 1,664,699 259,766 39,938 1,884,527

Total Accumulated Depreciation 36,730,239 4,869,235 39,938 41,559,536

Governmental Activities Capital Assets, net $ 208,321,245 $ (4,228,546) $ 173,074 $ 203,919,625


Instruction $ 4,463,757 Supervision of Instruction 2,317 Home-To-School Transportation 48,349 Food Services 29,612 Other Pupil Services 88,699 Other General Administration 208,207 Data Processing 7,148 Plant Services 31,146

Total Depreciation Expense $ 4,869.235

NOTE 7- GENERAL OBLIGATION BONDS

The outstanding general obligation debt of the District as of June 30, 2011 is as follows:

A. Current Interest Bonds

Date Amount of Issued Of Interest Maturity Original Outstanding Current

Issue Rate % Date Issue July 1, 2010 Year

Redeemed

Current Outstanding

Year June 30, 2011

2003 3.00-5.25 2018 $ 8,740,000 $ 6,150,000 $ 510,000 $ 5,640,000 2004 3.00-5.375 2029 15,115,000 14,200,000 285,000 13,915,000

Totals $ 23,855,000 $ 20,350,000 $ 0 $ 795,000 $ 19,555,000

36




NOTE 7- GENERAL OBLIGATION BONDS (CONTINUED)

A. Current Interest Bonds (Concluded)

The annual requirements to amortize the current interest bonds payable, outstanding as of June 30, 2011, are as follows:

Year Ended June 30 Principal Interest Totals

2012 $ 890,000 $ 934,275 $ 1,824,275 2013 995,000 893,200 1,888,200 2014 1,110,000 847,325 1,957,325 2015 1,230,000 795,338 2,025,338 2016 1,370,000 739,050 2,109,050 2017-2021 5,225,000 2,811,559 8,036,559 2022-2026 4,805,000 1,727,547 6,532,547 2027-2031 3,930,000 327,606 4,257,606

Totals $ 19,555,000 $ 9,075,900 $ 28,630,900

B. Capital Appreciation Bonds

Accreted Date Amount of Interest Redeemed Of Interest Maturity Original Outstanding Current Current Outstanding

Issue Rate % Date Issue July 1, 2010 Year Year June 30, 2011

1992 6.25-6.60 2018 $ 12,796,847 $ 25,153,265 $ 1,510,171 $ 2,835,000 $ 23,828,436 2002 5.11-5.58 2028 5 258 924 7,765,086 424,997 8 190 083

Totals $ 18,055,771 $ 32,918,351 $ 1,935,168 $ 2,835,000 $ 32,018,519

The outstanding obligation for the 1992 capital appreciation bonds is as follows:

Year Ended June 30 Rate %

Amount of Original Issue

(Principal) Accreted Interest Totals

2012 6.50 $ 922,445 $ 2,176,213 $ 3,098,658 2013 6.60 935,323 2,264,756 3,200,079 2014 6.60 962,890 2,331,508 3,294,398 2015 6.60 993,411 2,405,410 3,398,821 2016 6.60 1,023,932 2,479,313 3,503,245 2017-2021 6.60 2,143,365 5,189,870 7,333,235

Totals $ 6,981,366 $ 16,847,070 $ 23,828,436

37




NOTE 7- GENERAL OBLIGATION BONDS (CONCLUDED)

B. Capital Appreciation Bonds (Concluded)

The annual requirements to amortize the 1992 capital appreciation bonds at June 30, 2011, are as follows:


2012 $ 922,445 $ 2,192,555 $ 3,115,000 2013 935,323 2,497,721 3,433,044 2014 962,890 2,808,454 3,771,344 2015 993,411 3,158,503 4,151,914 2016 1,023,932 3,542,656 4,566,588 2017-2021 2,143,365 8,404,523 10,547,888

Totals $ 6,981,366 $ 22,604,412 $ 29,585,778

The outstanding obligation for the 2002 capital appreciation bonds is as follows:

Year Ended June 30 Rate %

Amount of Original Issue

(Principal) Accreted Interest Totals

2012 $ 0 $ 0 $ 0 2013 0 0 0 2014 0 0 0 2015 0 0 0

2016 0 0 0 2017-2021 5.11-5.27 1,637,416 869,650 2,507,066 2022-2026 5.35-5.54 2,605,244 1,473,083 4,078,327 2027-2031 5.56-5.58 1,016,264 588,426 1,604,690

Totals $ 5,258,924 $ 2,931,159 $ 8,190,083

The annual requirements to amortize the 2002 capital appreciation bonds at June 30, 2011, are as follows:


2012 $ 0 $ 0 $ 0 2013 0 0 0

2014 0 0 0 2015 0 0 0 2016 0 0 0

2017-2021 1,637,416 2,162,584 3,800,000 2022-2026 2,605,244 5,249,756 7,855,000 2027-2031 1,016,264 2,763,736 3,780,000

Totals $ 5,258,924 $ 10,176,076 $ 15,435,000

38




NOTE 8- CERTIFICATES OF PARTICIPATION

On December 1, 1998, the Roseville City School Public Financing Corporation issued certificates of participation in the amount of $19,270,000, with interest rates from 3.2% to 4.875%. The proceeds from the sale of the certificates were used to finance a portion of the cost of construction of three new elementary schools and one new middle school

At June 30, 2011, the outstanding principal balance for the certificates of participation was $12,810,000. The certificates mature through 2024 as follows:

Year Ended

June 30 Principal Interest Totals

2012 $ 740,000 $ 596,285 $ 1,336,285 2013 770,000 562,680 1,332,680 2014 805,000 526,840 1,331,840 2015 840,000 488,375 1,328,375 2016 880,000 447,525 1,327,525 2017-2021 5,090,000 1,541,141 6,631,141 2022-2026 3,685,000 275,072 3,960,072

Totals $ 12,810,000 $ 4,437,918 $ 17,247,918

NOTE 9- CAPITAL LEASES

On August 27, 2009, the District entered into a capital lease agreement for the purchase of three special education school buses. During fiscal year 2010-11, the District entered into two capital lease agreements for the purchase of computer equipment. These agreements provide for title to pass upon expiration of the lease periods.

Future minimum lease payments under these agreements are as follows:

Year Ended June 30

Lease Payments

2012 $ 159,155 2013 159,300 2014 159,307 2015 33,509 2016 33,230 2017-2021 33 777

Total Payments 578,278

Less Amounts Representing Interest (37,870)

Present Value of Net Minimum Lease Payments $ 540,408

The District will receive no sublease rental revenues nor pay any contingent rentals for the leased assets.

39




NOTE 10- DEFERRED OBLIGATION

During fiscal year 2005-06, the District entered into an agreement with Roseville Schools, LLC ("Developers"), for the construction of the Barbara Chilton Middle School. Under the terms of the agreement, the Developers pay all costs associated with the acquisition and construction of the Middle School and the District will reimburse the Developers from revenues in the West Roseville Specific Plan (VVRSP) Account.

The District will deposit state apportionments received for the Middle School and school impact fees, collected from developers issued building permits within the project area, into the WRSP Account. In the event that sufficient funds are not available in the WRSP Account to pay the Developers for the construction costs, the underfunded amount shall be treated as an advance to the District and payment deferred until such time as there are sufficient funds in the WRSP Account to satisfy the deferred obligation.

At June 30, 2011, the deferred obligation to the Developers for the Barbara Chilton Middle School is $19,390,906. Payments to satisfy the deferred obligation are required to be paid on a monthly basis from funds available in the WRSP Account.

NOTE 11 - EARLY RETIREMENT INCENTIVES

The District adopted an early retirement incentive program, pursuant to Education Code Sections 22714 and 44929, whereby the service credit to eligible certificated employees was increased by two years. The future liability for these early retirement incentive benefits at June 30, 2011, is $2,042,455.

Future payments under these agreements are as follows:

Year Ended June 30

STRS Golden Handshakes

2012 $ 524,485 2013 454,932 2014 409,754 2015 344,403 2016 296,106 2017-21 499264

Subtotal 2,528,944

Less Amount Representing Interest (486A89)

Total $ 2.042.455

NOTE 12 - OTHER POST EMPLOYMENT BENEFITS

From an accrual accounting perspective, the cost of other post employment benefits (OPEB), like the cost of pension benefits, generally should be associated with the periods in which the cost occurs, rather than in future years when the benefits are paid or provided. Governmental Accounting Standards Board Statement No. 45 requires an accrual basis measurement and recognition of OPEB cost over a period that approximates employees' years of service and provides information about actuarial accrued liabilities associated with OPEB and to what extent progress is being made in funding the plan.

40




NOTE 12 - OTHER POST EMPLOYMENT BENEFITS (CONTINUED)

Plan Descriptions: The District provides coverage to employees who retire from active status at a minimum age of 55 with at least 15 years of service and are eligible for pension benefits under either the California State Teachers' Retirement System (CaISTRS) or California Public Employees' Retirement System (CalPERS)

The District subsidizes premiums for the retirees and dependents up to the District cap (currently set at $7,187 per year); until the retiree reaches age 65 for certificated retirees or for five years, but not beyond age 65 for classified retirees. The District's subsidy is 50% for retirees with 15 years of service with an additional 10% added for each additional year of service, with 100% subsidy for 20 plus years of service. The retiree is responsible for self-paying any excess premiums above the District subsidy.

All contracts with District employees will be renegotiated at various times in the future and, thus, costs and benefits are subject to change. Benefits and contribution requirements (both employee and employer) for the OPEB Plan are established by various labor agreements.

The District had 717 eligible active employees and 44 eligible retired employees covered under the OPEB plan as of February 1, 2010, the effective date of the biennial OPEB valuation. For the District, OPEB benefits are administered by District personnel. No separate financial statements are issued.

Funding Policy: The District currently pays for post employment healthcare benefits on a pay-as-you-go basis, and these financial statements assume that pay-as-you-go funding will continue.

Annual OPEB Cost and Net OPEB Obligation: The following table shows the components of the District's annual OPEB cost for the fiscal year ended June 30, 2011, the amount actually contributed to the plan, and changes in the District's net OPEB obligation that resulted in a net OPEB obligation of $1,535,261 for the year ended June 30, 2011.

Normal service cost $ 493,887

Amortization of UAAL with interest to end of year 267,028

Annual required contribution (ARC) 760,915

Interest on Net OPEB Obligation 54,021

Adjustment to ARC (47,855)


Contributions for the fiscal year (312,243)

Increase in Net OPEB Obligation 454,838

Net OPEB Obligation - June 30, 2010 1,080,423

Net OPEB Obligation - June 30, 2011 $ 1,535,261

The District's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the last three fiscal years are presented in the following table:

41

ROSE VILLE CITY SCHOOL DISTRICT



NOTE 12 - OTHER POST EMPLOYMENT BENEFITS (CONCLUDED)

Net OPEB Obligation

Annual

Percentage Fiscal Year Ended

OPEB Cost

Contributed

June 30, 2011 $ 767,081 40.7% $ 1,535,261 June 30, 2010 741,914 29.0% 1,080,423 June 30, 2009 800,549 30.8% 553,942

Actuarial Methods and Assumptions: Projections of benefits for financial reporting purposes are based on the substantive plan and include the types of benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between the employer and plan members to that point. The projection of future benefits for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of future events far into the future. Examples include mortality, turnover, disability, retirement and other factors that affect the number of people eligible to receive future retiree benefits. Actuarially determined amounts are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarially accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

In the February 1, 2010, actuarial valuation, the liabilities were computed using the entry age normal method and the unfunded actuarial accrued liability is being amortized using the level percentage of payroll method over an amortization period of 30 years. The actuarial assumptions utilized a 5% discount rate, the expected long-term rate of return on District assets, a 3% inflation rate 3%, and 3% compensation increase rate. The valuation assumes a 4% healthcare cost trend rate based on the actuary's long-term assumption that the average increase over time cannot continue to outstrip general inflation by a wide margin.

NOTE 13- LONG-TERM LIABILITIES

A schedule of changes in long-term liabilities for the year ended June 30, 2011, is shown below.

Balances July 1, 2010 Additions Deductions

Balances June 30 2011

Due within

One Year

Compensated Absences 75,918 $ 15,822 $ 91,740 $ 91,740

General Obligation Bonds:

Current Interest 20,350,000 $ 795,000 19,555,000 890,000

Capital Appreciation 32,918,351 1,935,168 2,835,000 32,018,519 3,115,000

Certificates of Participation 13,515,000 705,000 12,810,000 740,000 Capital Leases 205,000 479,516 144,108 540,408 145,430

Deferred Obligation 20,396,114 1,005,208 19,390,906

Early Retirement Incentives 1,555,401 799,929 312,875 2,042,455 395,627

Other Post Employment Benefits 1,080,423 767,081 312,243 1,535,261 353,382

Totals $ 90,096,207 $ 3,997,516 $ 6,109,434 $ 87,984,289 $ 5,731,179

42




NOTE 14 - FUND BALANCES

The fund balances as of June 30, 2011 are as follows:

General Fund

Developer Fees Fund


Funds Totals

Nonspendable $ 653,235 68,011 $ 721,246 Restricted 1,134,788 $ 18,373,591 5,798,388 25,306,767 Assigned 2,547,651 1,115,764 3,663,415 Unassigned:

Economic Uncertainties - 1,922,412 1,922,412 Required

Economic Uncertainties - 1,281,609 1,281,609 District

Other 4,389,763 4,389,763

Total Fund Balances $ 11,929,458 $ 18,373,591 6,982,163 $ 37,285,212

NOTE 15- EMPLOYEE RETIREMENT SYSTEMS

Qualified employees are covered under multiple-employer contributory retirement plans maintained by agencies of the State of California. Certificated employees are members of the State Teachers' Retirement System (STRS) and classified employees are members of the Public Employees' Retirement System (PERS).

A. State Teachers' Retirement System (STRS)

Plan Description

The District contributes to the State Teachers' Retirement System (STRS), a cost-sharing multiple-employer public employee retirement system defined benefit pension plan administered by STRS. The plan provides retirement, disability, and survivor benefits to plan members and beneficiaries. Benefit provisions are established by State statutes, as legislatively amended, within the State Teachers' Retirement Law. STRS issues a separate comprehensive annual financial report that includes financial statements and required supplementary information. Copies of the STRS annual financial report may be obtained from the STRS, 100 Waterfront Place, West Sacramento, California 95605.

Fundinq Policy

Active plan members are required to contribute 8.0% of their salary and the District is required to contribute an actuarially determined rate. The actuarial methods and assumptions used for determining the rate are those adopted by the STRS Teachers' Retirement Board. The required employer contribution rate for fiscal year 2010-11 was 8.25% of annual payroll. The contribution requirements of the plan members are established by State statute. The District's contributions to STRS for the fiscal years ended June 30, 2011, 2010, and 2009, were $2,898,759, $2,922,890, and $2,928,055, respectively, and equal 100% of the required contributions for each year.

43




NOTE 15- EMPLOYEE RETIREMENT SYSTEMS (CONCLUDED)

B. California Public Employees' Retirement System (CalPERS)

Plan Description

The District contributes to the School Employer Pool under the California Public Employees' Retirement System (CalPERS), a cost-sharing multiple-employer public employee retirement system defined benefit pension plan administered by CalPERS. The plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions are established by State statutes, as legislatively amended, within the Public Employees' Retirement Law. CalPERS issues a separate comprehensive annual financial report that includes financial statements and required supplementary information. Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office, 400 Q Street, Sacramento, CA 95811.

Funding Policy

Active plan members are required to contribute 7.0% of their salary and the District is required to contribute an actuarially determined rate. The actuarial methods and assumptions used for determining the rate are those adopted by the CalPERS Board of Administration. The required employer contribution rate for fiscal year 2010-11 was 10.707%. The contribution requirements of the plan members are established by State statute. The District's contributions to CalPERS for the fiscal years ended June 30, 2011, 2010, and 2009, were $850,174, $793,327, and $755,065, respectively, and equal 100% of the required contributions for each year.

C. Social Security

As established by Federal law, all public sector employees who are not members of their employer's existing retirement system (STRS or PERS) must be covered by social security or an alternative plan. The District has elected to use Social Security as its alternative plan. Contributions made by the District and participating employees vest immediately. The District contributes 6.2% of employees' gross earnings. In addition, employees were required to contribute 6.2% of their gross earnings from July 2010 through December 2010 and 4.2% from January 2011 through June 2011.

NOTE 16- ON-BEHALF PAYMENTS MADE BY THE STATE OF CALIFORNIA

The District was the recipient of on-behalf payments made by the State of California to the State Teachers' Retirement System (STRS) for K-12 education. These payments consist of state general fund contributions of $1,499,273 to STRS (4.267% of salaries subject to STRS).

NOTE 17- EARLY RETIREMENT INCENTIVE PROGRAM

The District adopted an early retirement incentive program, pursuant to Education Code Sections 22714 and 44929, whereby the service credit to eligible employees is increased by two years. Eligible employees must have five or more years of service under the State Teachers' Retirement System and retire during a period of not more than 120 days or less than 60 days from the date of the formal action taken by the District.

44




NOTE 17 - EARLY RETIREMENT INCENTIVE PROGRAM (CONCLUDED)

Retiree Information

A total of fourteen employees retired in exchange for the additional two years of service credit.

Position Vacated F1/40

Service Credit

Retiree Salary

Retiree Benefits

Replacement Replacement Salary Benefits

Teacher 62 31 $ 80,472 $ 9,898 $ 50,056 $ 6,157 Teacher 61 37 82,927 10,200 50,056 6,157 Teacher 62 26 80,472 $ 9,898 50,056 6,157 Teacher 63 30 40,236 8,505 25,028 3,079 Teacher 64 17 77,162 9,491 50,056 6,157 Teacher 60 13 77,162 9,491 50,056 6,157 Teacher 68 21 80,472 9,898 50,056 6,157 Teacher 61 32 80,472 9,898 50,056 6,157 Teacher 60 19 80,472 9,898 50,056 6,157 Teacher 59 18 80,472 9,898 50,056 6,157 Teacher 61 17 80,472 9,898 50,056 6,157 Teacher 61 24 80,472 9,898 50,056 6,157 Teacher 58 30 80,472 9,898 50,056 6,157 Principal 62 23 114,895 14,132 83 909 10 321

Totals $ 1 116 630 $ 140,901 $ 709.609 $ 87,284

Additional Costs

As a result of this early retirement incentive program, the District expects to incur $909,300 in additional costs. The breakdown in additional costs is presented below:

Retirement costs $ 904,260 Administrative costs 5,040

Total additional costs $ 909,300

NOTE 16- RISK MANAGEMENT

The District is exposed to various risks of loss related to theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. During fiscal year 2010-11, the District participated in one joint powers authority (JPA) for purposes of pooling risk. There were no significant reductions in coverage during the year. Settlements have not exceeded coverage in any of the past three years.

NOTE 19 - JOINT VENTURES

The District participates in two joint ventures under joint powers agreements (JPAs); the Schools Insurance Group (SIG) for workers' compensation, property and liability, and health and welfare insurance, and School Project for Utility Rate Reduction (SPURR) for direct purchase of gas, electricity, and other utility services. SPURR also provides advisory services relative to utilities. The relationships between the District and the JPAs are such that the JPAs are not component units of the District for financial reporting purposes.

45




NOTE 19- JOINT VENTURES (CONCLUDED)

The JPAs arrange for and/or provide coverage for their members. Each JPA is governed by a board consisting of a representative from each member district. Each board controls the operations of their JPA, including selection of management and approval of operating budgets independent of any influence by the member districts beyond their representation on the Board. Each member district pays a premium commensurate with the level of coverage requested and shares surpluses and deficits proportionately to their participation in each JPA. The JPAs are audited on an annual basis. Financial information can be obtained by contacting each JPA's management.

NOTE 20- COMMITMENTS AND CONTINGENCIES

A. State and Federal Allowances, Awards and Grants

The District has received state and federal funds for specific purposes that are subject to review and audit by the grantor agencies. Although such audits could generate expenditure disallowances under terms of the grants, it is believed that any required reimbursements will not be material.

B. Litigation

The District is subject to various legal proceedings and claims. In the opinion of management, the ultimate liability with respect to these actions will not materially affect the financial position or results of operations of the District.

C. Construction Commitment

As of June 30, 2011, the District has an outstanding construction commitment of $104,682 for architectural services related to the Buljan Middle School 6 th Grade Classroom project, which is scheduled for completion in June 2012.

NOTE 21 - RECLASSIFICATION OF FUND BALANCES

The beginning fund balances of the General Fund and Deferred Maintenance Fund have been combined for financial reporting purposes in accordance with GASB 54 (see Note 1C).

Deferred General Maintenance

Fund Fund

Fund Balances - July 1, 2010 (as originally stated) $ 8,713,425 $ 893,308

Reclassification of Fund Balances 893,308 (893,308)

Fund Balances - July 1, 2010 (as restated) $ 9,606,733 0

NOTE 22- SUBSEQUENT EVENT

On October 5, 2011, the District issued tax and revenue anticipation notes (IRAN) in the amount of $5,700,000. The notes mature on October 4, 2012, and bear interest at 2.0%. Proceeds from the notes can be drawn upon during the year if cash shortages arise.

46

SUPPLEMENTARY INFORMATION SECTION


ROSE VILLE CITY SCHOOL DISTRICT

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL - GENERAL FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2011

Revenues

Original Budget

Final Budget Actual

Variance with Final Budget

Favorable (Unfavorable)

Revenue Limit Sources:

State Apportionment $ 17,286,177 $ 23,355,917 $ 23,427,245 71,328

Local Sources 29,141,673 25,765,421 25,732,446 (32,975)

Total Revenue Limit Sources 46,427,850 49,121,338 49,159,691 38,353

Federal Revenue 2,928,456 5,653,289 3,926,519 (1,726,770)

Other State Revenue 8,282,918 8,649,216 8,799,352 150,136

Other Local Revenue 3,030,862 4,280,650 4,323,924 43,274

Total Revenues 60,670,086 67,704,493 66,209,486 (1,495,007)

Expenditures Certificated Salaries 35,603,958 35,499,152 35,497,156 1,996

Classified Salaries 7,166,300 7,403,954 7,401,208 2,746

Employee Benefits 11,554,389 11,391,773 11,173,838 217,935

Books and Supplies 2,513,000 5,497,157 2,880,270 2,616,887

Services and Other Operating Expenditures 6,629,934 6,181,906 5,640,758 541,148

Capital Outlay 30,000 126,105 119,485 6,620

Debt Service: Principal Retirement 332,433 457,042 456,983 59

interest and Fiscal Charges 80,504 106,304 106,254 50

Other Expenditures 991,993 1,186,007 1,090,325 95,682


Excess of Revenues Over (Under) Expenditures (3,232,425) (144,907) 1,843,209 1,988,116

Other Financing Sources Other Sources 479,517 479,516 (1)

Net Change in Fund Balances (3,232,425) 334,610 2,322,725 $ 1,988,115

Fund Balances - July 1, 2010 (Note 21) 9,606,733 9,606,733 9,606,733

Fund Balances - June 30, 2011 $ 6,374,308 $ 9,941,343 $ 11,929,458


47



NON-MAJOR GOVERNMENTAL FUNDS

JUNE 30, 2011

Assets Cafeteria

Bond Interest

and Redemption

County School

Facilities

Total Non-Major

Governmental Funds

Deposits and Investments $ 1,045,484 $ 4,415,510 $ 1,761,891 $ 7,222,885

Receivables 436,568 5,951 442,519

Due from Other Funds 4,440 4,440

Stores Inventory 45,611 45,611

Prepaid Expenditures 22,400 22,400

Total Assets $ 1,554,503 $ 4,421,461 $ 1,761,891 $ 7,737,855

Liabilities and Fund Balances Liabilities:

Accounts Payable $ 24,923 $ 362,032 $ 386,955

Due to Other Funds 288,781 22,932 311,713

Deferred Revenue 57,024 57,024

Total Liabilities 370,728 384,964 755,692

Fund Balances: Nonspendable 68,011 68,011

Restricted $ 4,421,461 1,376,927 5,798,388

Assigned 1,115,764 1,115,764

Total Fund Balances 1,183,775 4,421,461 1,376,927 6,982,163

Total Liabilities and Fund Balances $ 1,554,503 $ 4,421,461 $ 1,761,891 $ 7,737,855


48


COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS


Revenues Cafeteria

Bond Interest

and Redemption

County School

Facilities

Total Non-Major

Governmental Funds

Federal Revenue $ 2,641,167 $ 2,641,167

State Revenue 212,569 $ 52,324 264,893

Local Revenue 2,225,272 4,960,989 $ 6,408 7,192,669

Total Revenues 5,079,008 5,013,313 6,408 10,098,729

Expenditures Food Services 4,557,935 4,557,935

Other General Administration 205,264 205,264

Plant Services 83,516 1,735,939 1,819,455

Facilities Acquisition and Construction 17,469 79,449 96,918

Debt Service:

Principal Retirement 3,630,000 3,630,000

Interest and Issuance Costs 969,575 969,575


Excess of Revenues Over (Under) Expenditures 214,824 413,738 (1,808,980) (1,180,418)

Other Financing Sources Operating Transfers In 2,157,812 2,157,812

Net Change in Fund Balances 214,824 413,738 348,832 977,394

Fund Balances-July 1, 2010 968,951 4,007,723 1,028,095 6,004,769

Fund Balances - June 30, 2011 $ 1,183,775 $ 4,421,461 $ 1,376,927 $ 6,982,163


49


SCHEDULE OF FUNDING PROGRESS


Actuarial Accrued Unfunded Percentage Valuation Value of Liability AAL Funded Covered of Covered

Date Assets (AAL) WAAL) Ratio Payroll Payroll

2/1/10 $ 0 $ 5,726,672 $ 5,726,672 0% $ 39,328,079 14.6% 2/1/08 0 5,203,357 5,203,357 0% 38,683,024 13.5%

SEE NOTES TO SUPPLEMENTARY INFORMATION 50


ORGANIZATION/BOARD OF EDUCATION/ADMINISTRATION


ORGANIZATION

The Roseville City School District was established on May 14, 1869, and operates fourteen elementary schools, two middle schools and one intermediate school. The District encompasses and serves the City of Roseville. There were no changes in the boundaries of the District during the year.

BOARD OF EDUCATION


Susan Goto President November, 2012

Rene Aguilera Clerk November, 2014

Gary Miller Member November, 2012

Ha!lie Romero Member November, 2014

James Brian Vlahos Member November, 2014

ADMINISTRATION

Richard L. Pierucci Superintendent

Vacant Assistant Superintendent - Educational Services

Jerrold Jorgensen Assistant Superintendent - Personnel Services

Julie Olson Assistant Superintendent - Business Services

51




P-2 Report Annual Report

Elementary District

Reported Audited

* ** ** ** ** **

District Reported Audited

*

**

Kindergarten First through Third Fourth through Sixth Seventh and Eighth Home and Hospital Special Education - SDC Special Education - Nonpublic Extended Year

Totals

1,075.65 3,266.91 3,175.21 1,833.75

4.78 141.85 10.42 10.46

1,074.81 3,267.57 3,175.04 1,833.95

4.77 142.49 10.42 10.46

1,077.21 3,266.19 3,172.38 1,831.66

4.89 143.26 10.51 10.46

1,075.92 3,266.19 3,172.38 1,831.66

5.30 143.26

10.51 10.46

9,519.03 9,519.51 9,516.56 9,515.68

* Reported amounts reflect the exclusion of the ADA questioned in Finding 11 - 2 1 10000 in the Findings and Questioned Costs Section of this report.

** Reported amounts reflect District initiated revisions that were not made as a result of the annual audit.

The District submitted revised P-2 and Annual Attendance reports, reflecting the audited ADA above, to the California Department of Education on August 29, 2011.





Grade Level

1982-83

Actual

Minutes

Adjusted

1982-83

Actual

Minutes

1986-87

Minutes

Required

Adjusted

1986-87

Minutes

Required

2010-11

Actual

Minutes

Number

of Days

Traditional

Calendar

Number

of Days

Multitrack

Calendar Status

Kindergarten 31,500 30,625 36,000 35,000 35,600 178 N/A In Compliance

Grade 1 50,090 48,699 50,400 49,000 53,530 178 N/A In Compliance










SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


Program Name

Federal Catalog Number

Pass-Through identification

Number

Federal Program

Expenditures

U.S. Department of Agriculture: Passed through California Department of Education (CDE): Child Nutrition Cluster:

National School Lunch 10.555 13524 $ 2,543,894 Basic Breakfast 10.553 13525 31,173

Needy Breakfast 10.553 13526 390,405 Summer Food Service Program 10.559 13004 42,511

U.S. Department of Education: Passed through CDE:

Title 1, Part A Cluster: NCLB: Title 1 Basic Grant Low-Income & Neglected 84.010 14329 450,084 ARRA NCLB: Title I Basic Grant Low-Income & Neglected 84.389 15005 40,246

ARRA State Fiscal Stabilization Fund 84.394 25008 500,417

NCLB: Title II Improving Teacher Quality 84.367 14341 214,450

NCLB: Title II Enhancing Education Through Technology 84.318 14334 1,967

ARRA: NCLB: Title II Enhancing Education Through Technology 84.386A 15019 4,771 NCLB: Title Ill Immigrant Education Program 84.365 14346 22,960

NCLB: Title III Limited English Proficient 84.365 10084 99,633

Passed through Roseville Joint Union High School District: NCLB: Title X McKinney-Vento Homeless Assistance 84.196 14332 12,059

ARRA NCLB: Title X McKinney-Vento Homeless Assistance 84.387 15007 53,908 Passed through Placer County SELPA:

Special Education Cluster: IDEA Part B Local Assistance 84.027 13379 1,437,095

IDEA Part B Preschool Grants 84.173 13430 66,242

IDEA Part B Preschool Local Entitlement 84.027A 13682 201,897 ARRA IDEA Part B Local Assistance 84.391 15003 472,222

ARRA IDEA Part B Preschool Grants 84.392 15000 54,675

ARRA IDEA Part B Preschool Local Entitlement 84.391 15002 114,132

U.S. Department of Health and Human Services: Passed through California Department of Health Services:

Medi-Cal Billing 93.778 10013 85,647 Passed through Sutter County Office of Education:

Medi-Cal Administrative Activities 93.778 10060 180,506

Total $ 7,020,894

SEE NOTES TO SUPPLEMENTARY INFORMATION

54


RECONCILIATION OF ANNUAL FINANCIAL AND BUDGET REPORT

WITH AUDITED FINANCIAL STATEMENTS


June 30, 2011 Annual Financial and

General Fund

Deferred Maintenance

Fund

Budget Report Fund Balances $ 11,308,379 $ 621,079

Reclassification Increasing (Decreasing) Fund Balance:

Overstatement of Fund Balance (621,079) Understatement of Fund Balance 621,079

June 30, 2011 Audited Financial Statements Fund Balances $ 11,929,458 $ 0

The District followed CDE guidance for the accounting of the Deferred Maintenance Fund. The reclassification of fund balances above was required as a result of the definition of special revenue funds prescribed by GASB 54.

Auditor's Comments

The audited financial statements of all other funds were in agreement with the Annual Financial and Budget Report for the fiscal year ended June 30, 2011.


55




Revenues and Other Financial Sources

Expenditures

Other Uses and Transfers Out

Total Outgo

Change in Fund Balance

Ending Fund Balance

Available Reserves

Reserve for Economic Uncertainties ***

GENERAL FUND

(Budget)* 2011-12 ** 2010-11 2009-10

(1)

2008-09

$ 66,588,841 $ 66,689,002 $ 62,879,688 $ 67,989,748

66,205,342

0

64,366,277

0

63,841,992

0

64,838,411

0

66,205,342 64,366,277 63,841,992 64,838,411

383,499 2,322,725 (962,304) 3,151,337

$ 12,312,957 $ 11,929,458 $ 9,606,733 $ 9,675,729

$ 8,161,413 $ 7,593,784 $ 5,191,182 $ 2,666,404

$ 3,303,525 $ 3,204,021 $ 5,191,182 $ 2,666,404

Available Reserves as a Percentage of Total Outgo 12.3% 11.8% 8.1% 4.1%

Total Long-Term Liabilities $ 82,253,110 $ 87,984,289 $ 90,096,208 $ 93,614,881

Average Daily Attendance at P-2 9,706 9,520 9,218 8,967

* Amounts reported for the 2011-12 budget are presented for analytical purposes only and have not been audited.

** Amounts have been adjusted to ensure comparability with the current year GASB 54 financial statement presentation.

*** Reported balances are a component of available reserves.

(1) The amount presented for fiscal year 2009-10 has been adjusted to reflect the reclassification discussed in Note 21 of these financial statements.

The fund balance of the General Fund increased $2,253,729 over the past two years due partially to the reclassification of the Deferred Maintenance Fund at the beginning of fiscal year 2010-11 (Note 21). The fiscal year 2011-12 budget projects an increase of $383,499 (3.2%). For a district this size, the state recommends available reserves of at least 3% of total general fund expenditures, transfers out, and other uses (total outgo).

The District produced operating surpluses of $2,322,725 and $3,151,337 during fiscal years 2010-11 and 2008-09, respectively, and incurred an operating deficit of $962,304 during fiscal year 2009-10.

Long-term liabilities decreased $5,630,592 over the past two years due primarily to payments on the outstanding general obligation bonds, certificates of participation and deferred obligation.

Average daily attendance (ADA) increased 553 ADA (6.2%) over the past two years. The District projects an increase of 186 ADA (2%) during fiscal year 2011-12.


56




NOTE 1 - PURPOSE OF STATEMENTS AND SCHEDULES

A. Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual

In accordance with Governmental Accounting Standards Board (GASB) Statement No. 34, the District is required to present a Schedule of Revenues, Expenditures, and Changes in Fund Balance budgetary comparison for the General Fund and each Major Special Revenue Fund that has an adopted budget. These statements present the original adopted budget, final adopted budget, and the actual revenues and expenditures of each of these funds by object.

B. Combining Statements

Combining statements are presented for purposes of additional analysis, and are not a required part of the District's basic financial statements. These statements present more detailed information about the financial position and financial activities of the District's individual funds.

C. Schedule of Funding Progress

In accordance with Governmental Accounting Standards Board Statement No. 45, the District is required to present a schedule which shows the funding progress of the District's OPEB plan for the most recent valuation and two preceding valuations. The information required to be disclosed includes the valuation date, the actuarial value of assets, the actuarial accrued liability, the total unfunded actuarial liability, the actuarial value of assets as a percentage of the actuarial accrued liability (funded ratio), the annual covered payroll and the ratio of the unfunded actuarial liability to annual covered payroll.

D. Schedule of Average Daily Attendance

Average daily attendance is a measurement of the number of pupils attending classes of the District. The purpose of attendance accounting from a fiscal standpoint is to provide the basis on which apportionments of state funds are made to school districts. This schedule provides information regarding the attendance of students at various grade levels and in different programs.

E. Schedule of Instructional Time

The District has received incentive funding for increasing instructional time as provided by the Incentives for Longer Instructional Day. This schedule presents information on the amount of instructional time offered by the District and whether the District complied with the provisions of Education Code Sections 46200 through 46206.

F. Schedule of Expenditures of Federal Awards

The accompanying schedule of expenditures of federal awards includes the federal grant activities of the District and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.

G. Reconciliation of Annual Financial and Budget Report with Audited Financial Statements

This schedule provides the information necessary to reconcile the fund balances of all funds as reported in the Annual Financial and Budget Report to the audited financial statements.

57




NOTE 1 - PURPOSE OF STATEMENTS AND SCHEDULES (CONCLUDED)

H. Schedule of Financial Trends and Analysis

This schedule discloses the District's financial trends by displaying past years data along with current year budget information. These financial trend disclosures are used to evaluate the District's ability to continue as a going concern for a reasonable period of time.

58

OTHER INDEPENDENT AUDITOR'S REPORTS SECTION



INDEPENDENT AUDITOR'S REPORT ON STATE COMPLIANCE


We have audited Roseville City School District's compliance with the types of compliance requirements described in the Standards and Procedures for Audits of California K-12 Local Educational Agencies 2010-11 to the state laws and regulations listed below for the year ended June 30, 2011. Compliance with the requirements of state laws and regulations is the responsibility of the District's management. Our responsibility is to express an opinion on Roseville City School District's compliance based on our audit.

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 the Standards and Procedures for Audits of California K-12 Local Educational Agencies 2010-11 prescribed in the California Code of Regulations, Title 5, section 19810 and following. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the state laws and regulations listed below occurred. An audit includes examining, on a test basis, evidence about Roseville City School District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of Roseville City School District's compliance with those requirements.

Procedures in Education Audit Appeals Panel's Procedures

Description Audit Guide Performed

Attendance Accounting: Attendance Reporting 8 Yes Kindergarten Continuance 3 Yes Independent Study 23 No (see below) Continuation Education 10 Not Applicable

Instructional Time: School Districts 6 Yes County Offices of Education 3 Not Applicable

Instructional Material: General Requirements 8 Yes

Ratios of Administrative Employees to Teachers 1 Yes

Classroom Teacher Salaries 1 Yes

Early Retirement Incentive Program 4 Yes

Gann Limit Calculation 1 Yes

School Accountability Report Card 3 Yes

Public Hearing Requirement - Receipt of Funds 1 Yes

59

P.O. Box 2196 / Folsom, CA 95763 / Phone (916) 966-3883 / Fax (916) 966-3815

Procedures In Education Audit Appeals Panel's

Audit Guide Procedures Performed

7 Yes 3 Yes 4 Not Applicable

4 Not Applicable

4 Yes 4 Yes 5 Not Applicable


Description

Class Size Reduction Program: General Requirements Option One Option Two Districts or Charter Schools With Only One School Serving K-3

After School Education and Safety Program: General Requirements After School Before School

Contemporaneous Records of Attendance For Charter Schools 1 Not Applicable

Mode of Instruction for Charter Schools 1 Not Applicable

Nonclassroom-Based Instruction/ Independent Study for Charter Schools 15 Not Applicable

Determination of Funding for Nonclassroom-Based Instruction for Charter Schools 3 Not Applicable

Annual Instructional Minutes - Classroom Based For Charter Schools 3 Not Applicable

We did not perform tests for the independent study program because the ADA claimed by the District does not exceed the threshold that requires testing.

In our opinion, Roseville City School District complied with the state laws and regulations referred to above for the year ended June 30, 2011, except as described in the accompanying Schedule of Findings and Questioned Costs. Further, based on our examination, for items not tested, nothing came to our attention to indicate that the Roseville City School District had not complied with the state laws and regulations.

The District's response to the finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. We did not audit the response and, accordingly, we express no opinion on the response.

This report is intended solely for the information and use of the District's Board, management, California State Controller's Office, California Department of Finance, California Department of Education, and pass-through entities, and is not intended to be and should not be used by anyone other than these specified parties.

SIttia*. g441e4 Ae6044444 ,67 ColtoulLoi. STEPHEN ROATCH ACCOUNTANCY CORPORATION Certified Public Accountants

December 5, 2011

60


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


We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Roseville City School District, as of and for the fiscal year ended June 30, 2011, which collectively comprise the District's basic financial statements, and have issued our report thereon dated December 5, 2011. 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.

Internal Control Over Financial Reporting

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

Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as described in the accompanying Schedule of Findings and Questioned Costs, we identified a certain deficiency in internal control over financial reporting that we consider to be a material weakness.

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. We consider the deficiency described in the accompanying Schedule of Findings and Questioned Costs as Finding 11 - 1 / 30000 to be a material weakness.

61

P.O. Box 2196 / Folsom, CA 95763 / Phone (916) 966-3883 / Fax (916) 966-3815


Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District's financial statements are free of 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.

We noted certain matters that we reported to management of Roseville City School District in a separate letter dated December 5, 2011.

The District's response to the finding identified in our audit is described in the accompanying Schedule of Findinqs and Questioned Costs. We did not audit the response and, accordingly, we express no opinion on it.

This report is intended solely for the information and use of the District's Board, management, federal and state awarding agencies, and pass-through entities, and is not intended to be and should not be used by anyone other than these specified parties.

514144, goevid Ace,(244444., 0424/..0


December 5, 2011

62


INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON

INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133


Compliance

We have audited Roseville City School District's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of Roseville City School District's major federal programs for the year ended June 30, 2011. The District's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the District's management. Our responsibility is to express an opinion on Roseville City School District's compliance based on our audit.

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 Roseville City School District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of Roseville City School District's compliance with those requirements.

In our opinion, Roseville City School District complied, in all material respects, with the 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, 2011.

63 P.O. Box 2196 / Folsom, CA 95763 / Phone (916) 966-3883 / Fax (916) 966-3815


Internal Control Over Compliance

Management of Roseville City School District is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the District's internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, 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 District'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.

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 deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.

This report is intended solely for the information and use of the District's Board, management, federal and state awarding agencies, and pass-through entities, and is not intended to be and should not be used by anyone other than these specified parties.

511144, Road Aezo4,4444,.6 7 Coifo4/404.


December 5, 2011

64

FINDINGS AND QUESTIONED COSTS SECTION



SCHEDULE OF FINDINGS AND QUESTIONED COSTS


SECTION I - SUMMARY OF AUDITOR'S RESULTS

Financial Statements

Type of auditor's report issued: Unqualified

Internal control over financial reporting: Material weaknesses identified? X Yes No

Significant deficiencies identified not considered to be material weaknesses? Yes X No


Federal Awards

Internal control over major programs: Material weaknesses identified? Yes X No

Significant deficiencies identified not considered


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

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


CFDA Numbers Federal Programs

10.553 / 10.555 / 10.559

Child Nutrition Cluster

84.027 / 84.173 / 84.391 /84.392

Special Education Cluster 84.010 /84.389

Title I, Part A Cluster

84.394

ARRA State Fiscal Stabilization Fund

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

Auditee qualified as low-risk auditee?

Yes X No

State Awards

Internal control over state programs: Material weaknesses identified? Yes X No

Significant deficiencies identified not considered to be material weaknesses? X Yes None reported

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

65





11 - 1 / 30000

MATERIAL WEAKNESS

MEMORANDUM OF UNDERSTANDING

Criteria:

Condition:

When districts contract with other parties to provide services, best practices recommend that the parties involved approve a contract or memorandum of understanding that covers all significant areas of the agreement for services.

There was no memorandum of understanding between the District and the operator of the District's After School Education and Safety (ASES) program, for fiscal year 2010-11.

Questioned Costs: None.

Context:

Effect:

Cause:

Recommendation:

District Response:

The District has contracted with the City of Roseville to operate an ASES program at two of their sites since fiscal year 2007-08. The memorandum of understanding stipulates the responsibilities of both parties as well as covering other areas such as term, bi-annual review, indemnification, insurance, assignment, termination of agreement, and attorney's fees.

The City of Roseville operated the District's ASES program in fiscal year 2010-11 without an approved memorandum of understanding with the District.

The original multi-year memorandum of understanding approved by the District and City of Roseville became effective on September 5, 2007. Both parties were unaware that the original memorandum of understanding term had expired.

The District should verify that there is an approved memorandum of understanding in effect at the beginning of each fiscal year.

The District agrees with the finding and will reinforce procedures currently in place to implement the recommendation.

66





There are no matters to report for the fiscal year ended June 30, 2011.

67





11 - 2 / 10000

SIGNIFICANT DEFICIENCY

KINDERGARTEN CONTINUANCE

Criteria:

Condition:

Questioned Costs:

Context:

Effect:

Cause:

Recommendation:

Education Code Section 46300(g) allows a district to include in its average daily attendance kindergarten pupils who have already completed one school year in kindergarten only if the school district has on file for each of those pupils an agreement made pursuant to Education Code Section 48011, approved in form and content by the California Department of Education (CDE), and signed by the pupil's parent or guardian near the anniversary date of the pupil's kindergarten admittance.

During fiscal year 2010-11, two students continued in kindergarten for a second year without obtaining an agreement made pursuant to Education Code Section 48011 that was approved in form and content by the CDE.

Average daily attendance (ADA) reported on the P-2 and Annual attendance reports was overstated by 1.07 ADA and 1.29 ADA, respectively. The estimated fiscal impact of this finding is a $5,334 decrease in revenue limit funding, which was computed as follows:

(1.07 P-2 ADA x $4,984.78 deficited base revenue limit per ADA)

All kindergarten students enrolled at Diamond Creek, Kaseberg, Cirby, and Stoneridge elementary schools, were tested for compliance with kindergarten continuation requirements. The District revised the P-2 and Annual attendance reports to exclude the questioned ADA noted above on August 29, 2011. (Certificate No. 4FA5F68A and Certificate No.484013B4).

The District did not comply with the requirements of Education Code Section 48011.

One site was unable to locate the state approved kindergarten continuation form and another site did not use the state approved kindergarten continuation form.

The District should instruct personnel at all elementary school sites to use the state approved kindergarten continuation form used by the District.

District Response: The District agrees with the finding and will reinforce procedures currently in place to implement the recommendation.

68


STATUS OF PRIOR YEAR RECOMMENDATIONS


There were no matters reported in the prior year audit report.

69


WESTERN PLACER UNIFIED SCHOOL DISTRICTLincoln, California

FINANCIAL STATEMENTSJune 30, 2011





TABLE OF CONTENTS

Page

Independent Auditors' Report 1-2

Management's Discussion and Analysis 3-11







Reconciliation of the Governmental Funds Balance Sheet - to theStatement of Net Assets 15



Statement of Fiduciary Net Assets - Trust and Agency Funds 18

Statement of Change in Fiduciary Net Assets - Fiduciary Funds 19




Schedule of Other Postemployment Benefits (OPEB) Funding Progress 44

Notes to Required Supplementary Information 45







Page


Combining Statement of Revenues, Expenditures and Change inFund Balances - All Non-Major Funds 47

Combining Statement of Changes in Assets and Liabilities - AllAgency Funds 48

Organization 49



Schedule of Expenditure of Federal Awards 52-53





Independent Auditors' Report on Compliance with State Laws andRegulations 59-61

Independent Auditors' Report on Internal Control over FinancialReporting and on Compliance and Other Matters Based on anAudit of Financial Statements Performed in Accordance withGovernment Auditing Standards 62-63

Independent Auditors' Report on Compliance with RequirementsThat Could Have a Direct and Material Effect on Each MajorProgram and on Internal Control over Compliance in Accordancewith OMB Circular A-133 64-65



Status of Prior Year Findings and Recommendations 70-71

3

Western Placer Unified School District Management Discussion and Analysis For the Fiscal Year Ended June 30, 2011

The discussion and analysis of Western Placer Unified School District’s (the District) financial performance provides an overview of the District’s financial activities for the fiscal year ended June 30, 2011. Management has prepared the financial statements and the related footnote disclosures along with this discussion and analysis. The intent of this discussion and analysis is to look at the District’s financial performance as a whole. To provide a complete understanding of the District’s financial performance, please read it in conjunction with the Independent Auditor’s report on pages 1 and 2, notes to the financial statements on pages 20‐42, and the District’s financial statements, which begin on page 12.

FINANCIAL HIGHLIGHTS

The last several years have been a budgetary roller coaster ride for school districts in California. The state’s financial woes have resulted in a 12% decline in the revenue limit funding, and a 5% decline in overall revenues, since 2007‐08. Western Placer has lost over $14 million in education funding as a result of these decreases.

Western Placer is fortunate to have identified and received $17 million in prior year funding as a result of its basic aid status. These resources have allowed the Board of Trustees to take a balanced and thoughtful approach to our state required budget cuts by mitigating deficit spending utilizing existing reserves. The Board of Trustees has targeted 2013‐14 as the timeline in which to achieve a balanced budget. By setting a target year by which to achieve a balanced budget, we can review and modify our annual goals and budget reductions to match revenue changes from the state.

District enrollment increased 104 students, or 1.7%, over the prior year. While the District did see slight growth in 2010‐11, 2011 CBEDS was only 37 students higher than 2010 and the District is projecting no increase in ADA for 2011‐12 or 2012‐13. The housing crisis has had a significant impact on our district demographics, and it is unlikely that significant growth will be seen until the housing market begins to recover.

OVERVIEW OF THE FINANCIAL STATEMENTS The financial statements are organized to provide the reader first with a look at the financial status of the entire Western Placer Unified School District. The statements then proceed to provide an increasingly detailed look at specific financial activities. This annual report consists of three parts:

Management’s Discussion and Analysis – this section which provides an overall review of the financial activity for the past fiscal year as well as a look at the future years.

Basic Financial Statements – a look at Western Placer Unified School District’s financial statement as a whole for the entire operating entity. The financial statements also include notes that explain some of the information in the statements and provide more detailed data.

4

Required Supplementary Information – detailed information for specific financial activities including required supplementary information that further explains and supports the financial statements with a comparison of the District’s budget for the year.

Reporting on the District as a Whole Statement of Net Assets and Statement of Activities These two statements provide information about the District as a whole using the accrual accounting methods similar to those used by private‐sector companies. They help answer the question, “How did we do financially during 2010‐11?” The change in net assets is report in the Statement of Net Assets. This change in net assets is important because it tells the reader whether the financial position of the District has improved or diminished. The causes of this change may be the result of many factors, some of them financial and some not. Over time, the increases or decreases in the District’s net assets, as reported in the Statement of Activities, are one indicator of whether its financial health is improving or deteriorating. All current year revenues and expenses are accounted for in the Statement of Activities regardless of when cash is received or paid. The relationship between revenues and expenses indicates the District’s operating results. It is important to remember, the District’s goal is to provide services to its students, not to generate profits as is necessary in commercial entities. One must consider many other non‐financial factors, such as the quality of education provided and the safety of the schools in order to assess the overall health of the District. In the district‐wide financial statements, the District’s activities are divided into two categories:

Governmental Activities – All of the District’s services are reported here, including regular and special education, general administration, transportation, food services, plant services, facilities acquisition and construction, interest, and long‐term debt. State support from revenue limit finding and categorical apportionments finance most of these activities.

Business‐type Activities – The District does not currently have any business type activities. Reporting the District’s Most Significant Funds Fund Financial Statements The fund financial statements provide more detailed information about the District’s most significant funds. Funds are accounting devices the District uses to keep track of specific sources of funding and spending on particular programs:

Some funds are required to be established by State law, bond covenants, or through grant or program restrictions.

The District establishes other funds to control and manage money for specific purposes (like repaying its long‐term debts) or to show that it is properly using certain revenues (like federal grants).

5

A District may have three kinds of funds:

Governmental Funds – Most of the District’s activities are reported in governmental funds. The major governmental funds of the District are the General Fund, Special Reserve Fund, and the Mello‐Roos Fund. Governmental funds focus on how money flows into and out of the funds and the balances that remain at the end of the year. They are reported using an accounting method called modified accrual 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 District’s operations and services that help determine whether there are more or fewer financial resources that can be spent in the near future to finance the District’s programs.

Proprietary Funds – Services for which the District charges a fee are generally reported in proprietary funds. Proprietary funds use the full accrual basis of accounting, the same as the district‐wide statements. The District does not have programs classified in this category.

Fiduciary Funds – The District is the trustee, or fiduciary, for assets that belong to others, such as the student activities funds. The District is responsible for ensuring that the assets that are reported in these funds are used only for their intended purposes and by those to whom the assets belong. The District’s fiduciary activities are reported in a separate statement of fiduciary net assets and a statement of changes in fiduciary net assets. We exclude these activities from the district‐wide financial statements because the District cannot use these assets to finance its operations.

FINANCIAL ANALYSIS OF THE GOVERNMENT‐WIDE STATEMENTS The District as a Whole Statement of Net Assets The District’s net assets decreased by $5,177,612 to $64,261,172 during the 2010‐11 fiscal year. Cash and cash equivalent accounts decreased $1,401,191 from FY 2009‐10. This decrease to the cash accounts was primarily due to the ongoing state apportionment deferrals. Total liabilities increased by $3,570,026 primarily due to the change in Accounts Payable. Accounts Payable increased by $3,831,989 primarily as a result of a Basic Aid Supplemental Charter School Funding that the California Department of Education (CDE) pulled back from the district for the 2009‐10 and 2010‐11 revenue limit (this payable is nearly equal to a receivable of deferred apportionment due from the CDE). District staff continues to petition CDE to revise their interpretation of the Basic Aid Supplemental Charter School Funding allocation for the 2009‐10 fiscal year and restore approximately $2 million in funding to Western Placer USD. Long‐term liabilities decreased by approximately $1.2 million due to principal payments on long‐term debt. The District’s net assets for FY 2010‐11 were $64,261,172, a decrease of $5,177,612 from FY 2009‐10. Of this balance, $25,700,982 was restricted while $9,256,231 was unrestricted. Investments in capital assets, net of related debt, accounted for $29,303,959 of the total net assets.

6

The Statement of Net Assets is included in the table below and provides the detail information for 2009‐10 and 2010‐11 along with the variances between the years.

2009-10 2010-11 $ Difference % Difference

Assets:

Cash and equivalents 39,396,797$ 37,995,606$ (1,401,191)$ -3.56%Receivables 6,228,519 7,138,907 910,388 14.62%Prepaid expenditures 6,032,303 6,285,154 252,851 4.19%

Stores inventory - 10,578 10,578 100.00%Capital assets (net of accumulated depreciation) 185,568,182 184,187,970 (1,380,212) -0.74%Total assets 237,225,801 235,618,215 (1,607,586) -0.68%

Liabilities:

Accounts payable and other current liabilities 5,884,042 9,716,031 3,831,989 65.13%Deferred revenue 212,408 1,147,932 935,524 440.44%Long-term liabilities

Due within one year 1,895,093 1,994,934 99,841 5.27%Due after one year 159,795,474 158,498,146 (1,297,328) -0.81%Total liabilities 167,787,017 171,357,043 3,570,026 2.13%

Net Assets

Invested in capital assets, net of related debt 30,120,003 29,303,959 (816,044) -2.71%Restricted 31,263,342 25,700,982 (5,562,360) -17.79%

Unrestricted 8,055,439 9,256,231 1,200,792 14.91%Total Net Assets 69,438,784$ 64,261,172$ (5,177,612)$ -7.46%

Table 1

Statement of Net AssetsJune 30, 2010 and 201


Statement of Activities The district’s total expenses were $66,899,859; $2,833,149 less in 2010‐11 than 2009‐10. Program revenues were $13,708,747; $4,666,084 higher in 2010‐11 than 2009‐10. General revenues were $48,013,500; $115,431 lower than 2009‐10.

7

2009-10 2010-11 $ Difference % DifferenceGeneral RevenuesTaxes Levied for General Purposes 36,950,910$ 33,665,754$ (3,285,156)$ -8.89%Taxes Levied for Debt Service 1,381,527 1,463,390 81,863 5.93%Taxes Levied for Specific Purposes 5,444,493 5,340,547 (103,946) -1.91%Unrestricted Federal and State Aid 2,072,333 4,491,739 2,419,406 116.75%Interest and Investment Earnings 889,946 574,277 (315,669) -35.47%Interagency Revenues 135,727 146,722 10,995 8.10%Miscellaneous 1,253,995 2,331,071 1,077,076 85.89%

Total General Revenues 48,128,931 48,013,500 (115,431) -0.24%

Program RevenuesCharges for Services 807,362 803,953 (3,409) -0.42%Operating Grants & Contributions 8,235,301 8,843,763 608,462 7.39%Capital Grants & Contributions - 4,061,031 4,061,031 0.00%

Total Program Revenues 9,042,663 13,708,747 4,666,084 51.60%

Total Revenues 57,171,594 61,722,247 4,550,653 7.96%

ExpensesInstruction 35,791,860 36,374,906 583,046 1.63%Supervision of Instruction 1,233,140 1,093,407 (139,733) -11.33%Instructional Library, Media & Technology 604,745 625,857 21,112 3.49%School Administration 3,463,927 3,517,201 53,274 1.54%Pupil Support Services 1,749,188 1,738,783 (10,405) -0.59%Home-to-School Transportation 1,757,963 1,426,646 (331,317) -18.85%Food Service 1,660,949 1,726,066 65,117 3.92%General Administration 3,222,481 3,664,494 442,013 13.72%Plant Services 5,249,155 5,003,445 (245,710) -4.68%Ancillary Services 934,823 921,865 (12,958) -1.39%Community Services 179,510 121,132 (58,378) -32.52%Enterprise activities 1,983 - (1,983) 0.00%Transfer Between Agencies 6,122,016 1,336,344 (4,785,672) -78.17%Interest on Debt and Fiscal Charges 7,761,268 9,349,713 1,588,445 20.47%

Total Expenses 69,733,008 66,899,859 (2,833,149) -4.06%

Change in Net Assets (12,561,414) (5,177,612) 7,383,802 -58.78%

Net Assets - Beginning 82,000,198 69,438,784 (12,561,414) -15.32%

Net Assets - Ending 69,438,784$ 64,261,172$ (5,177,612)$ -7.46%


Table 2Change in Net Assets


8

The users of the District’s programs paid $803,953 of the cost. This revenue was generated through cafeteria sales of $674,884, Transportation Fees of $94,653, and other miscellaneous revenue of $34,416. The federal and state governments subsidized certain programs with grants and contributions of $8,843,763. Most of the governmental activities were paid with $40,469,691 in property taxes, $4,491,739 of unrestricted state aid based on the statewide education aid formula, and $574,277 of investment earnings. The Miscellaneous Revenues of $2,331,071 is comprised of a number of items, including interest revenue, facilities use fees, developer fees, Mello‐Roos receipts and site co‐curricular revenues. Sources of Western Placer USD’s Revenue for the 2010‐11 Fiscal Year Figure 1

State Aid8%

Interest & Misc.5%

Grants & Contributions

15%

Charges for Services1%

Property Taxes71%

As reported in the Statement of Activities, the cost of all of the District’s governmental activities this year was $66,899,859. Instruction, instructional library, media & technology, and pupil services expenses made up approximately 65% of total 2010‐11 expenditures. This is a 4% decrease from the 61% expended in FY 2009‐10. General administration accounted for approximately 5% of the expenditure budget, similar to the prior year, and interest on debt and fiscal charges expenditures represented 15% of all outgo, an increase of 4%. Plant maintenance and operations accounted for 7% of the expenditure budget, a decrease of 1%. Figure 2, on the next page, charts the Districts expenditures for the 2010‐11 school year.

9

Western Placer USD’s Expenses for the Fiscal Year 2010‐11 Figure 2

Pupil Services7%

Plant Services7%

Other Outgo2%

Debt Service14%


5%

All Others2%

Instructional & Inst. Related Services

63%

FINANCIAL ANALYSIS OF THE FUND STATEMENTS The fund financial statements focus on individual parts of the District’s operations in more detail than the government‐wide statements. The individual fund statements provide information on inflows and outflows and balances of spendable resources. The District’s Governmental Funds reported a combined fund balance of $37.8 million, a decrease of $4.7 million from the previous fiscal year’s combined ending balance of $42.5 million. The funds with greatest changes were the General Fund (decrease of $4.7 million), Mello‐Roos Fund (decrease of $2.6 million), and the Capital Facilities Fund (increase of $4.0 million due to receipt of state match funds). General Fund Budgetary Highlights Over the course of the year, the District revised the annual operating budget regularly. Significant budget adjustments fell into the following categories:

Budget revisions to the adopted budget required after approval of the State budget.

Budget revisions acknowledging the inclusion of restricted ending balances, deferred revenue, and carryover from the prior year.

Budget revisions to update revenues to actual enrollment information and to update expenditures for staffing adjustments related to actual enrollments.

Budget revisions to reflect salary settlements.

Other budget revisions are routine in nature, including adjustments to categorical revenues and expenditures based on final awards, and adjustments between expenditure categories for school and department budgets.

The final revised budget for the General Fund reflected a net decrease to the ending balance of approximately $7.3 million. Actual audited activity reflected a net decrease to the ending balance of $6.3 million. The difference between the final budget and the actual ending balance is due primarily to books and supplies monies not being spent. This is not uncommon, particularly in categorical programs that carry balances over from year to year.

10

CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets By the end of the 2010‐11 fiscal year, the District had invested $184.2 million in a broad range of capital assets, including school sites, school buildings, site improvements, vehicles, equipment, and work in progress regarding the construction of new schools. This amount represents an decrease of $1.4 million from the previous fiscal year, the net change which consists of additional capital outlay of $1.7 million net of deletions and depreciation expense in the current fiscal year of $3.1 million.

2009-10 2010-11 $ Difference % Difference

Land 38,662,548$ 38,662,548$ -$ 0.00%Site Improvement 1,535,503 1,437,498 (98,005) -6.38%

Buildings 130,575,063 128,872,743 (1,702,320) -1.30%Equipment & Vehicles 1,941,127 2,162,349 221,222 11.40%

Work in Progress (WIP) 12,853,941 13,052,832 198,891 1.55%Total 185,568,182$ 184,187,970$ (1,380,212)$ 5.26%

Table 3

Capital Assets(net of depreciation)

The District did not begin or complete any major construction projects during 2010‐11. Expenditures for Twelve Bridges High School make up the majority of the June 30, 2011 WIP balance. Long‐Term Debt At June 30, 2011, the District had $160,493,080 in long‐term debt outstanding.

2010 2011

General Obligation Bonds 7,133,762$ 6,375,694$ 3.97%Accreted Interest on G.O. Bonds 7,585,986 8,355,322 5.21%Special Tax Bond 13,820,000 13,465,000 8.39%Other Post Employment Benefits 2,636,032 496,229 0.31%PARS - 1,919,038 1.20%Compensated Absences 160,184 150,732 0.09%Cerfiticates of Participation 130,130,000 129,600,000 80.75%Capital Leases 224,603 131,065 0.08%

TOTAL 161,690,567$ 160,493,080$

Table 4Outstanding LiabilitiesJune 30, 2010 and 2011

11

PARS represents the five‐year payment of an early retirement incentive the District offered in 2010‐11. Twenty‐two employees took the opportunity to retire early under this plan. PARS debt represents just over 1% of the Districts long‐term liabilities at June 30, 2011. The General Obligation Bonds are financed by the local taxpayers and represent 4% of the District’s long‐term debt. Certificates of Participation (COPs) are defeased through Mello‐Roos special taxes and developer fees. COPs represent an additional 80.8% of the District long‐term debt. FACTORS BEARING ON THE DISTRICT’S FUTURE For several years, the District saw rapid growth as new housing developments were completed and new homeowners moved into our district. The housing crisis and the economic downturn have had a significant impact on this development. Enrollment in 2010‐11 increased only 104 students (or 1.7%) over 2009‐10. Enrollment has increased 37 students in 2011‐12, about half of one percent, over 2010‐11. The District anticipates that enrollment will remain relatively flat for the next few years until developers begin building houses in Lincoln again. In 2011‐12, the District’s effective cost of living adjustment (COLA) for revenue is 2.24%. However, the net COLA is zero because the State increased the deficit it applies to revenue limits from 17.963% to 19.754%. This means that the District receives barely 80% of the entitled revenue limit funds. Additionally, the 2011‐12 State Budget includes language that, if state revenues are not as high as budgeted, automatic spending reductions are triggered, which may result in a total of over $2 billion in cuts to education. Negotiations with collective bargaining groups for the year have not been finalized with any bargaining groups. Other District costs, such as energy costs and certificated health and welfare benefits, continue to increase. The state’s budget crisis has had a serious impact to education funding. While all of the major governmental functions have taken cuts in budget over the past four years, only public K‐12 education is now funded at a lower level than in 2007‐08. The cuts to other areas have "vaporized" or have been restored in one way or another. Public education has a real, ongoing loss of nearly $5.9 billion, or 12% of revenue limit funding. If the automatic spending reductions are indeed triggered in 2011‐12, which appears likely, the loss of revenue limit funding will increase to as high as %15, or $7.3 billion statewide. So, we continue to prepare for the worst and hope for the best. The District’s greatest challenge continues to be maintaining a viable relationship between its revenues and expenditures while at the same time expanding its infrastructure and services to address the educational needs of its existing and future students. The $17 million recovered from the State in realization of the District’s basic aid status will certainly aid in this, and the District will use these funds to take a balanced approach to budget cuts while maintaining a reserve of 3% for economic uncertainties. CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Business Office, Western Placer Unified School District, 600 Sixth Street, Suite 400, Lincoln, CA 95648, (916) 645‐6350.





June 30, 2011


ASSETS

Cash and investments (Note 2) $ 37,995,606Receivables 7,138,907Prepaid expenditures 6,285,154Stores inventory 10,578Non-depreciable capital assets (Note 4) 51,715,380Depreciable capital assets, net of accumulated

depreciation (Note 4) 132,472,590

Total assets 235,618,215

LIABILITIES

Accounts payable 9,716,031Deferred revenue 1,147,932Long-term liabilities (Note 5):

Due within one year 1,994,934Due after one year 158,498,146


NET ASSETS

Invested in capital assets, net of related debt 29,303,959Restricted (Note 6) 25,700,982Unrestricted 9,256,231



12




Net(Expense)

Revenue andChanges in

Program Revenues Net Assets Charges Operating Capital

For Grants and Grants and Governmental

Expenses Services Contributions Contributions Activities

Governmental activities (Note 4):Instruction $ 36,374,906 $ 5,765,895 $ 4,061,031 $ (26,547,980)Instruction-related services:

Supervision of instruction 1,093,407 468,030 (625,377)Instructional library, media and

technology 625,857 (625,857)School site administration 3,517,201 59,983 (3,457,218)

Pupil services:Home-to-school transportation 1,426,646 $ 94,653 453,182 (878,811)Food services 1,726,066 674,884 1,101,223 50,041All other pupil services 1,738,783 124,910 (1,613,873)

General administration:Data processing 1,107,242 76,756 (1,030,486)All other general administration 2,557,252 34,416 393,163 (2,129,673)

Plant services 5,003,445 (5,003,445)Ancillary services 921,865 356,232 (565,633)Community services 121,132 18,389 (102,743)Other outgo 1,336,344 26,000 (1,310,344)Interest on long-term liabilities 9,349,713 (9,349,713)

Total governmental activities $ 66,899,859 $ 803,953 $ 8,843,763 $ 4,061,031 (53,191,112)


Taxes levied for general purposes 33,665,754Taxes levied for debt service 1,463,390Taxes levied for other specific purposes 5,340,547

Federal and state aid not restricted to specific purposes 4,491,739Interest and investment earnings 574,277Interagency revenues 146,722Miscellaneous 2,331,071


Change in net assets (5,177,612)

Net assets, July 1, 2010 69,438,784

Net assets, June 30, 2011 $ 64,261,172


13


BALANCE SHEET

GOVERNMENTAL FUNDS

June 30, 2011

TotalAll Govern-

General Mello-Roos Non-Major mental Fund Fund Funds Funds

ASSETS

Cash and investments:Cash in County Treasury $ 10,430,321 $ 14,771,773 $ 9,748,442 $ 34,950,536Cash in revolving fund 2,000 2,000Cash with Fiscal Agent 3,043,070 3,043,070

Receivables 6,520,973 617,934 7,138,907Prepaid expenditures 418,324 3,996 2,015 424,335Stores inventory 10,578 10,578Due from other funds 64,766 138,085 202,851

Total assets $ 17,436,384 $ 17,818,839 $ 10,517,054 $ 45,772,277


Liabilities:Accounts payable $ 6,362,018 $ 2,200 $ 267,997 $ 6,632,215Deferred revenue 1,113,818 34,114 1,147,932Due to other funds 67,668 135,183 202,851

Total liabilities 7,543,504 2,200 437,294 7,982,998

Fund balances:Nonspendable 420,324 3,996 10,833 435,153Restricted 425,569 17,812,643 10,068,927 28,307,139Assigned 2,146,384 2,146,384Unassigned 6,900,603 6,900,603

Total fund balances 9,892,880 17,816,639 10,079,760 37,789,279

Total liabilities and fundbalances $ 17,436,384 $ 17,818,839 $ 10,517,054 $ 45,772,277


14


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET -TO THE STATEMENT OF NET ASSETS

June 30, 2011


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

Capital assets used for governmental activities are not financialresources and, therefore, are not reported as assets ingovernmental funds. The cost of the assets is $211,528,540and the accumulated depreciation is $27,340,570 (Note 4). 184,187,970

In governmental funds, debt issue costs are recognized asexpenditures in the period they are incurred. In thegovernment wide statements, debt issue costs are amortizedover the life of debt. Unamortized debt issue costs included inprepaid expense on the statement of net assets are: 5,860,819

In governmental funds, interest on long-term debt is notrecognized until the period in which it matures and is paid. Inthe government-wide statements, it is recognized in the periodthat it is incurred. (3,083,816)

Long-term liabilities are not due and payable in the currentperiod and, therefore, are not reported as liabilities in thegovernmental funds. Long-term liabilities at June 30, 2011consisted of (Note 5):

Special Tax Bonds $ (13,465,000)General Obligation Bonds (6,375,694)Accreted interest (8,355,322)Certificates of Participation (129,600,000)Capitalized lease obligations (131,065)PARS (1,919,038)Other postemployment benefits (Note 8) (496,229)Compensated absences (150,732)

(160,493,080)

Total net assets - governmental activities $ 64,261,172


15



GOVERNMENTAL FUNDS


TotalAll Govern-

General Mello-Roos Non-Major mental Fund Fund Funds Funds


State apportionment $ 8,036,702 $ 8,036,702Local sources 25,068,957 25,068,957

Total revenue limit 33,105,659 33,105,659

Federal sources 3,000,437 $ 1,062,446 4,062,883Other state sources 6,403,700 4,273,178 10,676,878Other local sources 3,287,334 $ 5,633,972 4,955,524 13,876,830

Total revenues 45,797,130 5,633,972 10,291,148 61,722,250

Expenditures:Certificated salaries 25,437,724 117,844 25,555,568Classified salaries 7,416,725 887,617 8,304,342Employee benefits 10,565,871 435,799 11,001,670Books and supplies 2,409,875 20 764,514 3,174,409Contract services and operating

expenditures 4,190,433 85,786 695,979 4,972,198Capital outlay 563,152 1,565,404 2,128,556Other outgo 1,393,152 1,393,152Debt service:

Principal retirement 4,076 885,000 869,904 1,758,980Interest 1,240 7,477,231 707,027 8,185,498


(Deficiency) excess of revenues(under) over expenditures (6,185,118) (2,814,065) 4,247,060 (4,752,123)

Other financing sources (uses):Operating transfers in 97,970 300,000 315,588 713,558Operating transfers out (207,519) (108,069) (397,970) (713,558)

Total other financing sources(uses) (109,549) 191,931 (82,382)

Change in fund balances (6,294,667) (2,622,134) 4,164,678 (4,752,123)

Fund balances, July 1, 2010 16,187,547 20,438,773 5,915,082 42,541,402

Fund balances, June 30, 2011 $ 9,892,880 $ 17,816,639 $ 10,079,760 $ 37,789,279


16





Net change in fund balances - Total Governmental Funds $ (4,752,123)

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

Acquisition of capital assets is an expenditure in thegovernmental funds, but increases capital assets in thestatement of net assets (Note 4). $ 2,238,462


Issuance of long-term liabilities is an other financing source inthe governmental funds, but increases the long-term liabilitiesin the statement of net assets (Note 5). (22,374)

Repayment of principal on long-term liabilities is an expenditurein the governmental funds, but decreases the long-termliabilities in the statement of net assets (Note 5). 1,758,980

Amortization of costs associated with the issuance of liabilitiesare not uses of financial sources and, therefore, are notreported as expenditures in governmental funds. (152,115)

Accreted interest is not accrued in the governmental funds, butis recognized over the life of the debt in the government-widefinancial statements (Note 5). (769,336)

Unmatured interest on long-term liabilities is not recorded in thegovernmental funds until it becomes due, but increases theliabilities in the statement of net assets. (90,649)

In the statement of activities, expenses related to PARS, otherpostemployment benefits and compensated absences aremeasured by the amounts earned during the year. In thegovernmental funds, expenditures are measured by theamount of financial resources used (Note 5). 230,217 (425,489)

Change in net assets of governmental activities $ (5,177,612)


17


STATEMENT OF FIDUCIARY NET ASSETS

TRUST AND AGENCY FUNDS

June 30, 2011

Agency Trust Funds Fund

Retiree Student Scholarship Benefits Body Total

ASSETS

Cash and investments (Note 2):Cash in County Treasury $ 162,248 $ 6,387 $ 168,635Cash on hand and in banks $ 208,706 208,706

Total assets 162,248 6,387 208,706 377,341

LIABILITIES

Due to student groups 208,706 208,706

NET ASSETS

Restricted (Note 6) $ 162,248 $ 6,387 $ - $ 168,635


18


STATEMENT OF CHANGE IN FIDUCIARY NET ASSETS

FIDUCIARY FUNDS


Trust Funds Retiree

Scholarship Benefits Total

Operating revenues:Other local sources $ 3,082 $ 3,190 $ 6,272

Operating expenditures:Contract services and operating

expenditures 2,050 2,381,039 2,383,089

Change in net assets 1,032 (2,377,849) (2,376,817)

Net assets, July 1, 2010 161,216 2,384,236 2,545,452

Net assets, June 30, 2011 $ 162,248 $ 6,387 $ 168,635


19



1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Western Placer Unified School District (the "District") accounts for its financialtransactions in accordance with the policies and procedures of the CaliforniaDepartment of Education's California School Accounting Manual. The accountingpolicies of the District conform to accounting principles generally accepted in the UnitedStates of America as prescribed by the Governmental Accounting Standards Board.The following is a summary of the more significant policies:

Reporting Entity

The Board of Education is the level of government which has governanceresponsibilities over all activities related to public school education in the District. TheBoard is not included in any other governmental "reporting entity" as defined by theGovernmental Accounting Standards Board since Board members have decision-making authority, the power to designate management, the responsibility to significantlyinfluence operations and primary accountability for fiscal matters.

Mello-Roos Community Facilities District

The District and the Mello-Roos Community Facilities District (the "CFD") have afinancial and operational relationship that meets the reporting entity definition criteria ofGASB Codification Section 2100, The Financial Reporting Entity, for inclusion of theCFD as a blended component unit of the District. Accordingly, the financial activities ofthe CFD have been included in the financial statements of the District within the Mello-Roos Fund, a capital projects fund. Special tax bonds issued by the CFD are includedin long-term liabilities on the government-wide financial statements.


The CFD was created for the sole purpose of financially assisting the District. The CFDis a community facilities district pursuant to the provisions of the Mello-Roos CommunityFacilities Act of 1982, as amended by Title 5, Division 2, Part 1, Chapter 2.5 of theCalifornia Government Code established March 30, 1989. The CFD was formed toprovide financing assistance to the District for construction, rehabilitation and acquisitionof major capital facilities.

Western Placer Unified School District Financing Corporation

The District and the Western Placer Unified School District Financing Cooperation (theCorporation) have a financial and operational relationship that meets the reporting entitydefinition criteria of GASB Codification Section 2100, The Financial Reporting Entity, forinclusion of the Corporation as a blended component unit of the District. Accordingly,the financial activities of the Corporation have been included in the general-purposefinancial statements of the District within the Capital Facilities Fund, a capital projectsfund. The certificates of participation issued by the Corporation are included in long-term liabilities on the government-wide financial statements.

20




Western Placer Unified School District Financing Corporation (Continued)


The Corporation was created in June 1998 for the sole purpose of financially assistingthe District.


The basic financial statements include a Management's Discussion and Analysis(MD & A) section providing an analysis of the District's overall financial position andresults of operations, financial statements prepared using full accrual accounting for allof the District's activities, including infrastructure, and a focus on the major funds.


The Statement of Net Assets and the Statement of Activities displays information aboutthe reporting government as a whole. Fiduciary funds are not included in thegovernment-wide financial statements. Fiduciary funds are reported only in theStatement of Fiduciary Net Assets and the Statement of Change in Fiduciary Net Assetsat the fund financial statement level.


Program revenues: Program revenues included in the Statement of Activities derivedirectly from the program itself or from parties outside the District's taxpayers orcitizenry, as a whole; program revenues reduce the cost of the function to be financedfrom the District's general revenues.

Allocation of indirect expenses: The District reports all direct expenses by function inthe Statement of Activities. Direct expenses are those that are clearly identifiable with afunction. Depreciation expense is specifically identified by function and is included inthe direct expense of each function. Interest on general long-term liabilities isconsidered an indirect expense and is reported separately on the Statement ofActivities.

21





The accounts of the District are organized on the basis of funds, each of which isconsidered to be a separate accounting entity. The operations of each fund areaccounted for with a separate set of self-balancing accounts that comprise its assets,liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Districtresources are allocated to and accounted for in individual funds based upon the purposefor which they are to be spent and the means by which spending activities arecontrolled. The District's accounts are organized into two broad categories which, inaggregate, include six fund types as follows:


1. General Fund:

The General Fund is the general operating fund of the District andaccounts for all revenues and expenditures of the District notencompassed within other funds. All general tax revenues and otherreceipts that are not allocated by law or contractual agreement to someother fund are accounted for in this fund. General operating expendituresand the capital improvement costs that are not paid through other fundsare paid from the General Fund. The activities of the Special Reserve forOther Than Capital Outlay Fund have been included in the General Fundfor financial reporting purposes.

2. Special Revenue Funds:

The Special Revenue Funds are used to account for the proceeds ofspecific revenue sources that are legally restricted to expenditures forspecified purposes. This classification includes the Adult Education,Child Development, Cafeteria and Deferred Maintenance.

3. Capital Projects Funds:

The Capital Projects Funds are used to account for resources used forthe acquisition or construction of capital facilities by the District. Thisclassification includes the Mello-Roos, Building, Capital Facilities, CountySchool Facilities and Special Reserve Funds.

4. Debt Service Funds:

The Debt Service Funds are used to account for the accumulation ofresources for, and the payment of, general long-term debt principal,interest, and related costs. This classification includes the Bond Interestand Redemption and Mello-Roos Debt Service Funds.

22





B - Fiduciary Funds

1. Trust Fund:

The Trust Funds are used to account for assets held by the District asTrustee. The District maintains two expendable trust funds, theScholarship Trust, which is to be used to provide financial assistance tostudents of the District, and the Retiree Benefits Fund, which is used bythe District to reserve for funds to pay for retiree benefits.

2. Agency Funds:

Student Body Funds are used to account for revenues and expendituresof the various student body organizations. All cash activity, assets andliabilities of the various student bodies of the District are accounted for inStudent Body Funds.

Basis of Accounting

Basis of accounting refers to when revenues and expenditures or expenses arerecognized in the accounts and reported in the basic financial statements. Basis ofaccounting relates to the timing of the measurement made, regardless of themeasurement focus applied.

Accrual

Both governmental and business-type activities in the government-wide financialstatements and the fiduciary fund financial statements are presented on the accrualbasis of accounting. Revenues are recognized when earned and expenses arerecognized when incurred.

Modified Accrual

The governmental funds financial statements are presented on the modified accrualbasis of accounting. Under the modified accrual basis of accounting, revenues arerecorded when susceptible to accrual; i.e., both measurable and available. "Available"means collectible within the current period or within 60 days after year end.Expenditures are generally recognized under the modified accrual basis of accountingwhen the related liability is incurred. The exception to this general rule is that principaland interest on general obligation long-term liabilities, if any, is recognized when due.


By state law, the Board of Education must adopt a final budget by July 1. A publichearing is conducted to receive comments prior to adoption. The Board of Educationcomplied with these requirements.

23




Cafeteria Food Purchases

Cafeteria purchases include food purchased through the State of California Office ofSurplus Property, for which the District is required to pay only a handling charge. Thestate does not require the Cafeteria Fund to record the fair market value of thesecommodities. The expenditures for these items would have been greater had theDistrict paid fair market value for the government surplus food commodities.

Prepaid Debt Issuance Cost

Included in the Statement of Net Assets $5,860,819 of prepaid debt issuance costs.Prepaid debt issuance cost are amortized over the life of the debt. Amortization of$152,115 was recognized in the current year in the Statement of Activities.

Capital Assets



Compensated absences totaling $150,732 are recorded as a liability of the District. Theliability is for the earned but unused benefits.


Sick leave benefits are not recognized as liabilities of the District. The District's policy isto record sick leave as a operating expenditure or expense in the period taken sincesuch benefits do not vest nor is payment probable; however, unused sick leave is addedto the creditable service period for calculation of retirement benefits for certain STRSand CalPERS employees, when the employee retires.

Deferred Revenue

Revenue from federal, state, and local special projects and programs is recognizedwhen qualified expenditures have been incurred. Funds received but not earned arerecorded as deferred revenue until earned.

24





Restrictions of the ending net assets indicate the portions of net assets not appropriablefor expenditure or amounts legally segregated for a specific future use. The restrictionsfor revolving cash fund, prepaid expenditures and stores inventory reflect the portions ofnet assets represented by revolving cash fund, prepaid expenditures and storesinventory, respectively. These amounts are not available for appropriation andexpenditure at the balance sheet date. The restriction for unspent categorical programrevenues represent programs where the revenue received is restricted for expendituresonly in that particular program. The restriction for special revenues represents theportion of net assets restricted for special purposes. The restriction for debt servicerepayments represents the portion of net assets which the District plans to expend ondebt repayment. The restriction for capital projects represents the portion of net assetsrestricted for capital projects. The restriction for scholarships represents the portion ofnet assets to be used to provide financial assistance to students of the District. Therestriction for retiree benefits represents the portion of net assets to be used by theDistrict to pay for retiree benefits.


Governmental Accounting Standards Board Codification Sections 1300 and 1800, FundBalance Reporting and Governmental Fund Type Definitions (GASB Cod. Sec. 1300and 1800) implements a five-tier fund balance classification hierarchy that depicts theextent to which a government is bound by spending constraints imposed on the use ofits resources. The five classifications, discussed in more detail below, arenonspendable, restricted, committed, assigned and unassigned.


The nonspendable fund balance classification reflects amounts that are not inspendable form, such as revolving fund cash, prepaid expenditures and storesinventory.


The restricted fund balance classification reflects amounts subject to externallyimposed and legally enforceable constraints. Such constraints may be imposedby creditors, grantors, contributors, or laws or regulations of other governments,or may be imposed by law through constitutional provisions or enablinglegislation. These are the same restrictions used to determine restricted netassets as reported in the government-wide and fiduciary trust fund statements.

25






The committed fund balance classification reflects amounts subject to internalconstraints self-imposed by formal action of the Board of Education. Theconstraints giving rise to committed fund balance must be imposed no later thanthe end of the reporting period. The actual amounts may be determinedsubsequent to that date but prior to the issuance of the financial statements.Formal action by the Board of Education is required to remove any commitmentfrom any fund balance. At June 30, 2011, the District had no committed fundbalances.

D - Assigned Fund Balance:

The assigned fund balance classification reflects amounts that the District'sBoard of Education has approved to be used for specific purposes, based on theDistrict's intent related to those specific purposes. The Board of Education candesignate personnel with the authority to assign fund balances, however, as ofJune 30, 2011, no such designation has occurred.




Fund Balance Policy


While GASB Cod. Sec. 1300 and 1800 do not require districts to establish a minimumfund balance policy or a stabilization arrangement, GASB Cod. Sec. 1300 and 1800 dorequire the disclosure of a minimum fund balance policy and stabilization arrangements,if they have been adopted by the Board of Education. At June 30, 2011, the District hasnot established a minimum fund balance policy nor has it established a stabilizationarrangement.

26




Property Taxes

Secured property taxes are attached as an enforceable lien on property as of March 1.Taxes are due in two installments on or before December 10 and April 10. Unsecuredproperty taxes are due in one installment on or before August 31. The County of Placerbills and collects taxes for the District. Tax revenues are recognized by the Districtwhen received.

Encumbrances

Encumbrance accounting is used in all budgeted funds to reserve portions of applicableappropriations for which commitments have been made. Encumbrances are recordedfor purchase orders, contracts, and other commitments when they are written. Allencumbrances are liquidated as of June 30.


In the process of aggregating data for the Statement of Net Assets and the Statement ofActivities, some amounts reported as interfund activity and balances in the funds wereeliminated or reclassified. Interfund receivables and payables were eliminated tominimize the "grossing up" effect on assets and liabilities within the governmentalactivities column.

Estimates

The preparation of basic financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions. These estimates and assumptions affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the financial statements and the reported amounts of revenues and expendituresduring the reporting period. Accordingly, actual results may differ from those estimates.

27




Cash and investments at June 30, 2011 are reported at fair value and consisted of thefollowing:

Governmental Fiduciary Activities Activities

Pooled Fund:Cash in County Treasury $ 34,950,536 $ 168,635

Deposits:Cash on hand and in banks 208,706Cash in revolving fund 2,000

Investments:Cash with Fiscal Agent 3,043,070

Total cash and investments $ 37,995,606 $ 377,341

Pooled Funds

In accordance with Education Code Section 41001, the District maintains substantiallyall of its cash in the Placer County Treasury. The County pools these funds with thoseof school districts in the County and invests the cash. These pooled funds are carried atcost which approximates fair value. Interest earned is deposited monthly intoparticipating funds. Any investment losses are proportionately shared by all funds in thepool.

Because the District's deposits are maintained in a recognized pooled investment fundunder the care of a third party and the District's share of the pooled investment funddoes not consist of specific, identifiable investment securities owned by the District, nodisclosure of the individual deposits and investments or related custodial credit riskclassifications is required.

In accordance with applicable state laws, the Placer County Treasurer may invest inderivative securities. However, at June 30, 2011, the Placer County Treasurer hasrepresented that the Treasurer's pooled investment fund contained no derivatives orother investments with similar risk profiles.

Deposits - Custodial Credit Risk - Deposits

The District limits custodial credit risk by ensuring uninsured balances are collateralizedby the respective financial institution. Under Section 343 of the Dodd-Frank Wall StreetReform and Consumer Protection Act, interest-bearing cash balances held in banks areinsured up to $250,000 and noninterest-bearing cash balances held in banks are fullyinsured by the Federal Deposit Insurance Corporation (FDIC) and are collateralized bythe respective financial institution. At June 30, 2011, the carrying amount of theDistrict's accounts was $210,706 and the bank balance was $232,329, all of which wasinsured.

28




Investments

The Cash with Fiscal Agent of $3,043,070 in the Mello-Roos Fund represents debtproceeds that have been set aside for capital projects and the repayment of long-termliabilities. These amounts are held by a third party custodian in the District's name.

Interest Rate Risk


Credit Risk





Interfund Activity

Transactions between funds of the District are recorded as interfund transfers, exceptfor the Self-Insurance Fund activity which is recorded as income and expenditures of theSelf-Insurance Fund and the funds which incur payroll costs, respectively. The unpaidbalances at year end, as a result of such transactions, are shown as due to and duefrom other funds.

29



3. INTERFUND TRANSACTIONS (Continued)


Individual interfund receivable and payable balances at June 30, 2011 were as follows:

Interfund Interfund Fund Receivables Payables

Major Fund:General $ 64,766 $ 67,668

Non-Major Funds:Adult Education 148 7,045Child Development 7,520 4,186Cafeteria 351Deferred Maintenance 60,000Building 70,417Special Reserve 123,601

Totals $ 202,851 $ 202,851

Interfund Transfers

Interfund transfers consist of operating transfers from funds receiving revenue to fundsthrough which the resources are to be expended.

Interfund transfers for the 2010-2011 fiscal year were as follows:

Transfer from the General Fund to the Adult Education Fundfor revenues. $ 116,491

Transfer from the General Fund to the Adult Education Fundfor the TPP program contribution. 23,508

Transfer from the General Fund to the Child Development andfor the state preschool contribution. 7,520

Transfer from the General Fund to the Deferred MaintenanceFund to account for the current year allocation of DeferredMaintenance funding. 60,000

Transfer from the Mello-Roos Fund to the Mello-Roos DebtService Fund for debt service payment. 82,069

Transfer from the Mello-Roos Fund to the Child DevelopmentFund for debt repayment. 26,000

Transfer from the Adult Education Fund to the General Fundfor indirect costs. 5,455

Transfer from the Child Development Fund to the GeneralFund for indirect costs. 16,743

Transfer from the Cafeteria Fund to the General Fund forindirect costs. 75,772

Transfer from the Capital Facilities Fund to the Mello-RoosFund for debt service payments. 300,000

$ 713,558

30



4. CAPITAL ASSETS

A schedule of changes in capital assets for the year ended June 30, 2011 is shownbelow:

Balance Transfers Transfers BalanceJuly 1, and and June 30,

2010 Additions Deductions 2011 Governmental Activities

Non-depreciable:Land $ 38,662,548 $ 38,662,548Work-in-process 12,853,941 $ 1,090,237 $ 891,346 13,052,832

Depreciable:Buildings 150,774,803 1,454,921 152,229,724Equipment 4,674,841 584,650 543,236 4,716,255Site improvements 2,867,181 2,867,181

Totals, at cost 209,833,314 3,129,808 1,434,582 211,528,540

Less accumulateddepreciation:

Buildings (20,199,740) (3,157,241) (23,356,981)Equipment (2,733,714) (363,428) (543,236) (2,553,906)Site improvements (1,331,678) (98,005) (1,429,683)

Total accumulateddepreciation (24,265,132) (3,618,674) (543,236) (27,340,570)

Capital assets, net $ 185,568,182 $ (488,866) $ 891,346 $ 184,187,970


Instruction $ 3,312,425Food services 30,000Site administration 50,000Home-to-School transportation 100,000Plant services 126,249

Total depreciation expense $ 3,618,674

31




Special Tax Bonds

In 2005, the District issued Community Facilities District No. 1 Special Tax Bonds in theamount of $15,000,000, to pay for the acquisition and construction of certain schoolfacilities. The bonds bear interest rates ranging from 3.0% to 5.0% and are scheduled tomature in September 2034.

Scheduled payments on Series 2005 Special Tax Bond are as follows:

Year Ended June 30, Principal Interest Total

2012 $ 365,000 $ 572,596 $ 937,5962013 380,000 560,946 940,9462014 390,000 548,190 938,1902015 405,000 534,521 939,5212016 420,000 519,034 939,034

2017-2021 2,355,000 2,325,269 4,680,2692022-2026 2,865,000 1,796,406 4,661,4062027-2031 3,535,000 1,108,918 4,643,9182032-2035 2,750,000 241,000 2,991,000

$ 13,465,000 $ 8,206,880 $ 21,671,880

General Obligation Bonds

In 1999, the District issued General Obligation Bonds in the amount of $15,052,284, toconstruct, repair and expand local schools. Repayment of the bonds will be made fromproperty taxes levied. The bonds bear interest rates ranging from 4.6% to 6.05% andare scheduled to mature in June 2019.


2012 $ 774,283 $ 810,717 $ 1,585,0002013 785,308 919,692 1,705,0002014 794,898 1,045,102 1,840,0002015 810,899 1,189,101 2,000,0002016 821,052 1,328,948 2,150,000

2017-2019 2,389,254 4,690,746 7,080,000

$ 6,375,694 $ 9,984,306 $ 16,360,000

32




Certificates of Participation (COPs)

In October 2006 the District issued $8,000,000 Series A COPs with the payment toadvance refund and defease the District's 2001 COPs. The 2001 COPs are consideredto be defeased, and the obligations have been removed from the District's financialstatements. In June 2008, the District issued $32,370,000 Refinancing Project COPs,with interest rates ranging from 3.4% to 5.0%, maturing in 2047. The 2008 refinancingCOPs was used to pay the 2003 Series A COPS and the 2003 Series B COPs. InAugust 2008, the District issued $36,725,000 Refinancing Project COPs, with interestrates ranging from 4.0% to 5.13%, maturing in 2047. The 2008B refinancing COPs wasused to pay the 2004 Series A COPs. In December 2009, the District issued$53,035,000 Refinancing Project COPs, with interest rates ranging from 3.0% to 5.75%,maturing in 2049. The 2009 refinancing COPs was used to pay the 2006 Series BCOPs.

The 2006, Series A COPs mature as follows:


2012 $ 292,032 $ 292,0322013 292,032 292,0322014 292,032 292,0322015 292,032 292,0322016 292,032 292,032

2017-2021 $ 1,100,000 1,418,485 2,518,4852022-2026 3,100,000 974,352 4,074,3522027-2031 3,800,000 346,181 4,146,181

$ 8,000,000 $ 4,199,178 $ 12,199,178

The 2008, Refinancing Project COPs matured as follows:


2012 $ 1,569,505 $ 1,569,5052013 1,569,505 1,569,5052014 1,569,505 1,569,5052015 1,569,505 1,569,5052016 $ 95,000 1,567,890 1,662,890

2017-2021 2,175,000 7,673,046 9,848,0462022-2026 3,585,000 6,992,952 10,577,9522027-2031 1,400,000 6,433,113 7,833,1132032-2036 2,050,000 6,061,775 8,111,7752037-2041 10,515,000 4,624,875 15,139,8752042-2046 12,025,000 1,559,375 13,584,3752047-2048 525,000 15,875 540,875

$ 32,370,000 $ 41,206,921 $ 73,576,921

33




Certificates of Participation (Continued)

The 2008, Series B COPs matured as follows:


2012 $ 1,843,194 $ 1,843,1942013 1,843,194 1,843,1942014 1,843,194 1,843,1942015 1,843,194 1,843,1942016 $ 210,000 1,837,944 2,047,944

2017-2021 1,140,000 9,032,976 10,172,9762022-2026 1,950,000 8,623,555 10,573,5552027-2031 1,065,000 8,367,963 9,432,9632032-2036 4,565,000 7,655,944 12,220,9442037-2041 9,115,000 6,046,610 15,161,6102042-2046 12,650,000 3,228,549 15,878,5492047-2048 6,030,000 312,881 6,342,881

$ 36,725,000 $ 52,479,198 $ 89,204,198

The 2009, Refinancing Project COPs matured as follows:


2012 $ 230,000 $ 2,829,539 $ 3,059,5392013 245,000 2,822,414 3,067,4142014 350,000 2,813,489 3,163,4892015 365,000 2,802,764 3,167,7642016 250,000 2,792,914 3,042,914

2017-2021 1,805,000 13,783,746 15,588,7462022-2026 3,635,000 13,322,338 16,957,3382027-2031 7,230,000 11,764,013 18,994,0132032-2036 10,105,000 9,555,993 19,660,9932037-2041 405,000 8,107,931 8,512,9312042-2046 5,255,000 7,663,457 12,918,4572047-2050 22,630,000 3,065,900 25,695,900

$ 52,505,000 $ 81,324,498 $133,829,498

34





The District leases various buildings and equipment under agreements that have beencapitalized and recorded as a long term liability in the financial statements. The Districtwill receive no sublease rental revenues nor pay any contingent rentals for thisequipment. The following is a schedule of future lease payments:

Year Ending Lease June 30, Payments

2012 $ 96,2262013 18,3162014 18,3162015 4,888

Total payments 137,746


Net minimum lease payments $ 131,065

PARS Supplementary Retirement Plan

The District implemented a Public Agency Retirement System (PARS) SupplementaryRetirement Plan, which was available to employees that satisfied all the requirementsoutlined in the execution agreement with an effective date of April 5, 2011. There are 33participants in the Plan. The District will make non-elective employer contributions tothe participants' 403(b) annuity contract held with Pacific Life Insurance Company. Thefollowing is a schedule of the future payments for the PARS Supplementary RetirementPlan:

Year Ending Annual June 30, Payments

2012 $ 383,8082013 383,8082014 383,8082015 383,8072016 383,807

Total payments remaining $ 1,919,038

35




Schedule of Changes in Long-Term Liabilities

A schedule of changes in long-term liabilities for the year ended June 30, 2011 is shownbelow:

Balance Balance AmountsJuly 1, June 30, Due Within

2010 Additions Deletions 2011 One Year

Governmental activities:Special Tax Bonds $ 13,820,000 $ 355,000 $ 13,465,000 $ 365,000General Obligation Bonds 7,133,762 758,068 6,375,694 774,283Accreted interest 7,585,986 $ 769,336 8,355,322Certificates of Participation 130,130,000 530,000 129,600,000 230,000Capitalized lease obligations 224,603 22,374 115,912 131,065 91,111PARS 1,919,038 1,919,038 383,808Other postemployment benefits

(Note 8) 2,636,032 440,873 2,580,676 496,229Compensated absences 160,184 9,452 150,732 150,732

Total $ 161,690,567 $ 3,151,621 $ 4,349,108 $ 160,493,080 $ 1,994,934

Payments on the Special Tax Bonds are made from the Mello-Roos Fund. Payments onthe General Obligation Bonds are made from the Bond Interest and Redemption Fund.Payments on the Certificates of Participation are made from the Mello-Roos Fund.Payments on the capitalized lease obligations are made from the General, ChildDevelopment, Capital Facilities and Mello-Roos Debt Service Funds. Payments for theother postemployment benefits and the compensated absences are made from the fundfor which the related employee worked.

6. NET ASSETS / FUND BALANCES

Restricted net assets consisted of the following at June 30, 2011:

Governmental Fiduciary Activities Funds

Restricted for revolving cash $ 2,000Restricted for prepaid expenditures 424,335Restricted for stores inventory 10,578Restricted for unspent categorical

program revenues 425,569Restricted for special revenues 2,347,475Restricted for debt service 1,019,044Restricted for capital projects 21,471,981Restricted for scholarships $ 162,248Restricted for retiree benefits 6,387

Total restricted net assets $ 25,700,982 $ 168,635

36



6. NET ASSETS / FUND BALANCES (Continued)


AllGeneral Mello-Roos Non-Major

Fund Fund Funds Total

Nonspendable:Revolving cash fund $ 2,000 $ 2,000Prepaid expenses 418,324 $ 3,996 $ 255 422,575Stores inventory 10,578 10,578

Subtotal nonspendable 420,324 3,996 10,833 435,153

Restricted:Unspent categorical revenues 425,569 425,569Special revenue 2,347,475 2,347,475Capital projects 6,702,408 6,702,408Debt service 17,812,643 1,019,044 18,831,687

Subtotal restricted 425,569 17,812,643 10,068,927 28,307,139

Assigned:Board assignments 875,263 875,263Wetlands mitigation 1,271,121 1,271,121

Subtotal assigned 2,146,384 2,146,384

Unassigned:Designated for economic

uncertainty 2,604,590 2,604,590Undesignated 4,296,013 4,296,013

Subtotal unassigned 6,900,603 6,900,603

Total fund balances $ 9,892,880 $ 17,816,639 $ 10,079,760 $ 37,789,279


Qualified employees are covered under multiple-employer defined benefit pension plansmaintained by agencies of the State of California. Certificated employees are membersof the State Teachers' Retirement System (STRS), and classified employees aremembers of the California Public Employees' Retirement System (CalPERS).

37





California Public Employees' Retirement System (CalPERS)

Plan Description

The District contributes to the School Employer Pool under the California PublicEmployees' Retirement System (CalPERS), a cost-sharing multiple-employer publicemployee retirement system defined benefit pension plan administered by CalPERS.The plan provides retirement and disability benefits, annual cost-of-living adjustments,and death benefits to plan members and beneficiaries. Benefit provisions areestablished by state statutes, as legislatively amended, within the Public Employees'Retirement Law. CalPERS issues a separate comprehensive annual financial reportthat includes financial statements and required supplementary information. Copies ofthe CalPERS annual financial report may be obtained from the CalPERS ExecutiveOffice, 400 Q Street, Sacramento, California 95811.

Funding Policy

Active plan members are required to contribute 7% of their salary and the District isrequired to contribute an actuarially determined rate. The actuarial methods andassumptions used for determining the rate are those adopted by the CalPERS Board ofAdministration. The required employer contribution rate for fiscal year 2010-2011 was10.707% of annual payroll. The contribution requirements of the plan members areestablished by state statute. The District's contributions to CalPERS for the fiscal yearsending June 30, 2009, 2010 and 2011 were $604,926, $655,466 and $750,389,respectively, and equal 100% of the required contributions for each year.

State Teachers' Retirement System (STRS)

Plan Description

The District contributes to the State Teachers' Retirement System (STRS), a cost-sharing multiple-employer public employee retirement system defined benefit pensionplan administered by STRS. The plan provides retirement, disability and survivorbenefits to beneficiaries. Benefit provisions are established by state statutes, aslegislatively amended, within the State Teachers' Retirement Law. STRS issues aseparate comprehensive annual financial report that includes financial statements andrequired supplementary information. Copies of the STRS annual financial report may beobtained from the STRS Executive Office, 100 Waterfront Place, West Sacramento,California 95605.

38





State Teachers' Retirement System (STRS) (Continued)

Funding Policy

Active plan members are required to contribute 8% of their salary. The requiredemployer contribution rate for fiscal year 2010-2011 was 8.25% of annual payroll. Thecontribution requirements of the plan members are established by state statute. TheDistrict's contributions to STRS for the fiscal years ending June 30, 2009, 2010 and2011 were $1,931,687, $2,068,985 and $2,083,867, respectively, and equal 100% ofthe required contributions for each year.

8. OTHER POSTEMPLOYMENT BENEFITS

In addition to the pension benefits described in Note 7, the District providespostretirement health care benefits to certificated employees (under three distinctagreements between the District and the Western Placer Teachers Association) andclassified employees (under an agreement between the District and the Western PlacerClassified Employees Association) as follows:

A. The District pays the full cost of health care benefits to age 65 for employeeswho retired prior to June 30, 1990 and had reached age 60. The full cost ofbenefits is limited to the amount the District was paying as of June 30, 1990.After age 65, the District continues to pay 50% of the cost and the employeepays the remainder. As of June 30, 2011, there were 7 retirees receivingbenefits under this agreement.

B. The District's certificated retirees who had at least fifteen years of service andhad reached a minimum age of 55 and retire after July 1, 2001 receive up to$6,455 per year in health care benefits for a maximum of 10 years or untilage 65, whichever comes first. As of June 30, 2011, there were 14 retiredemployees are receiving benefits under this agreement.

C. The District pays up to $2,775 per year in healthcare benefits for classifiedemployees who had at least fifteen years of service and had reached age 55 andretired after July 1, 2003. These benefits cease after a maximum of five years orat age 65, whichever comes first. As of June 30, 2011, there was 1 retiredemployee receiving benefits under this agreement.

39




The District's annual other postemployment benefit (OPEB) cost (expense) is calculatedbased on the annual required contribution of the employer (ARC), an amount actuariallydetermined in accordance with the parameters of GASB Cod. Sec. P50.108-.109. TheARC represents a level of funding that, if paid on an ongoing basis, is projected to covernormal cost each year and amortize any unfunded actuarial liabilities (or funding excess)over a period not to exceed thirty years. The following table shows the components ofthe District's annual OPEB cost for the year, the amount actually contributed to the plan,and changes in the District's net OPEB obligation:

Annual required contribution $ 309,071

Interest on net OPEB obligation 131,802

Adjustment to annual required contribution -


Contributions made (2,580,676)

Decrease in net OPEB obligation (2,139,803)

Net OPEB obligation - beginning of year 2,636,032

Net OPEB obligation - end of year $ 496,229

The District's annual OPEB cost, the percentage of annual OPEB cost contributed to theplan, and the net OPEB obligation for the year ended June 30, 2011 and preceding twoyears were as follows:

Percentageof Annual

Fiscal Year Annual OPEB Cost Net OPEB Ended OPEB Cost Contributed Obligation

June 30, 2009 $ 269,071 75% $ 2,448,415June 30, 2010 $ 391,492 52% $ 2,636,032June 30, 2011 $ 440,873 585% $ 496,229

As of March 1, 2010, the most recent actuarial valuation date, the plan was not funded.The actuarial accrued liability for benefits was $3.0 million and the actuarial value of planassets was $2.4 million, resulting in an unfunded liability of $0.6 million. The coveredpayroll (annual payroll of active employees covered by the Plan) was $29.1 million, andthe ratio of the UAAL to the covered payroll was 2 percent.

40




Actuarial valuations of an ongoing plan involve estimates of the value of reportedamounts and assumptions about the probability of occurrence of events far into thefuture. Examples include assumptions about future employment, mortality, and thehealthcare cost trend. Amounts determined regarding the funded status of the plan andthe annual required contributions of the employer are subject to continual revision asactual results are compared with past expectations and new estimates are made aboutthe future. The schedule of funding progress, shown above, presents multiyear trendinformation about whether the actuarial value of plan assets is increasing or decreasingover time relative to the actuarial accrued liabilities for benefits.

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

In the March 1, 2010 actuarial valuation, the entry age actuarial cost method was used.The actuarial assumptions included a 5.0 percent investment rate (net of administrativeexpenses), which is a blended rate of the expected long-term investment returns on planassets and on the employer's own investments calculated based on the funded level ofthe plan on the valuation date, and an annual healthcare cost trend rate of 4.0 percent.The actuarial value of assets was determined using techniques that spread the effectsof short-term volatility in the market value of investments over a five-year period.

9. JOINT POWERS AGREEMENT


The District is a member with other school districts of a Joint Powers Authority, SchoolsInsurance Group (SIG), for the operation of a common risk management and insuranceprogram for property and liability coverage. The following is a summary of financialinformation for SIG at June 30, 2011:

Total assets $ 78,249,905Total liabilities $ 28,922,356Total net assets $ 49,327,549Total revenues $ 76,619,585Total expenses $ 72,953,461Change in net assets $ 3,666,124

The relationship between the District and the Joint Powers Authority is such that theJoint Powers Authority is not component unit of the District for financial reportingpurposes.

41



10. CONTINGENCIES


The District has received federal and state funds for specific purposes that are subjectto review and audit by the grantor agencies. Although such audits could result inexpenditure disallowances under terms of the grants, it is management's opinion thatany required reimbursements of future revenue offsets subsequently determined will nothave a material effect on the District's financial position or results of operations..


On September 23, 2011, the District issued $6,500,000 of Tax and RevenueAnticipation Notes (TRANs). The TRANs mature on October 4, 2012, and yield 2.00percent interest. The TRANs were sold to supplement cash flow and are repaid fromtaxes, income, revenue, cash receipts and other monies received by or accruing to theGeneral Fund of the District during the fiscal year.

On November 1, 2011, the District issued $8,620,000 Certificates of Participation for theadvance refunding of the District's 2006 Series A Certificates of Participation. TheCOP's mature on November 1, 2041 and have interest rates between 2.0% and 5.2%.

42




GENERAL FUND






State apportionment $ 9,137,439 $ 8,970,452 $ 8,036,702 $ (933,750)Local sources 25,877,745 24,108,406 25,068,957 960,551

Total revenue limit 35,015,184 33,078,858 33,105,659 26,801

Federal sources 2,374,010 3,086,544 3,000,437 (86,107)Other state sources 5,633,680 6,218,383 6,403,700 185,317Other local sources 2,781,080 3,194,742 3,287,334 92,592

Total revenues 45,803,954 45,578,527 45,797,130 218,603

Expenditures:Certificated salaries 25,418,227 25,425,130 25,437,724 (12,594)Classified salaries 7,267,520 7,401,709 7,416,725 (15,016)Employee benefits 10,706,230 10,628,869 10,565,871 62,998Books and supplies 2,540,700 2,874,053 2,409,875 464,178Contract services and operating

expenditures 4,195,329 4,470,357 4,190,433 279,924Capital outlay 100,000 591,829 563,152 28,677Other outgo 1,100,000 1,416,579 1,393,152 23,427Debt service:

Principal retirement 4,153 4,076 4,076Interest 1,163 1,240 1,240

Total expenditures 51,333,322 52,813,842 51,982,248 831,594

Deficiency of revenuesunder expenditures (5,529,368) (7,235,315) (6,185,118) 1,050,197

Other financing sources (uses):Operating transfers in 109,727 110,785 97,970 (12,815)Operating transfers out (113,218) (139,814) (207,519) (67,705)

Total other financing sources (uses) (3,491) (29,029) (109,549) (80,520)

Change in fund balance (5,532,859) (7,264,344) (6,294,667) 969,677

Fund balance, July 1, 2010 16,187,547 16,187,547 16,187,547

Fund balance, June 30, 2011 $ 10,654,688 $ 8,923,203 $ 9,892,880 $ 969,677


43


SCHEDULE OF OTHER POSTEMPLOYMENT BENEFITS (OPEB)FUNDING PROGRESS


Schedule of Funding Progress Unfunded UAAL as a

Actuarial Actuarial PercentageFiscal Actuarial Actuarial Accrued Accrued ofYear Valuation Value of Liability Liability Funded Covered Covered

Ended Date Assets (AAL) (UAAL) Ratio Payroll Payroll

06/30/09 March 20, 2008 $ - $ 3,000,000 $ 3,000,000 0% $ 5,300,000 45%06/30/10 March 20, 2008 $ - $ 3,000,000 $ 3,000,000 0% $ 5,300,000 45%06/30/11 March 1, 2010 $ 2,400,000 $ 3,000,000 $ 600,000 80% $ 29,100,000 2%

The accompanying notes are an interalpart of these financial statements.

44


NOTES TO REQUIRED SUPPLEMENTARY INFORMATION


A - Budgetary Comparison Schedule

The District employs budget control by object codes and by individualappropriation accounts. Budgets are prepared on the modified accrual basis ofaccounting in accordance with accounting principles generally accepted in theUnited States of America as prescribed by the Governmental AccountingStandards Board. The budgets are revised during the year by the Board ofEducation to provide for revised priorities. Expenditures cannot legally exceedappropriations by major object code. The originally adopted and final revisedbudgets for the General Fund are presented as Required SupplementaryInformation. The basis of budgeting is the same as GAAP.

Excess of expenditures over appropriations for the year ended June 30, 2011were as follows:

Excess Fund Expenditures

General Fund:Certificated salaries $ 12,594Classified salaries $ 15,016

These excesses are not in accordance with Education Code 42600.

B - Schedule of Other Postemployment Benefits Funding Progress

The Schedule of Funding Progress presents multi-year trend information whichcompares, over time, the actuarially accrued liability for benefits with theactuarial value of accumulated plan assets.

45





ALL NON-MAJOR FUNDS

June 30, 2011

County Bond Mello-RoosAdult Child Deferred Capital School Special Interest and Debt

Education Development Cafeteria Maintenance Building Facilities Facilities Reserve Redemption Service Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Total

ASSETS

Cash in County Treasury $ (35,511) $ 29,020 $ 23,131 $ 2,109,015 $ 1,753,991 $ 80,472 $ 4,058,723 $ 711,859 $ 1,017,042 $ 700 $ 9,748,442Receivables 69,287 142,903 404,442 1,302 617,934Prepaid expenditures 1,760 255 2,015Stores inventory 10,578 10,578Due from other funds 148 7,520 60,000 70,417 138,085

Total assets $ 33,924 $ 38,300 $ 176,867 $ 2,169,015 $ 1,824,408 $ 80,472 $ 4,058,723 $ 1,116,301 $ 1,018,344 $ 700 $ 10,517,054


Liabilities:Accounts payable $ 8,515 $ 5,011 $ 576 $ 466 $ 3,375 $ 4,062 $ 245,992 $ 267,997Deferred revenue $ 34,114 34,114Due to other funds 7,045 4,186 351 123,601 135,183

Total liabilities 15,560 38,300 5,362 576 466 3,375 4,062 369,593 437,294

Fund balances:Nonspendable 10,833 10,833Restricted 18,364 160,672 2,168,439 1,823,942 77,097 4,054,661 746,708 $ 1,018,344 $ 700 10,068,927

Total fund balances 18,364 171,505 2,168,439 1,823,942 77,097 4,054,661 746,708 1,018,344 700 10,079,760

Total liabilities and fundbalances $ 33,924 $ 38,300 $ 176,867 $ 2,169,015 $ 1,824,408 $ 80,472 $ 4,058,723 $ 1,116,301 $ 1,018,344 $ 700 $ 10,517,054


46



ALL NON-MAJOR FUNDS


County Bond Mello-RoosAdult Child Deferred Capital School Special Interest and Debt

Education Development Cafeteria Maintenance Building Facilities Facilities Reserve Redemption Service Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Total

Revenues:Federal sources $ 48,322 $ 1,014,124 $ 1,062,446Other state sources $ 139,374 84,463 $ 4,049,341 4,273,178Other local sources 92,012 1,701 755,270 $ 38,053 $ 1,134,725 $ 477,317 11,690 $ 973,911 $ 1,471,545 $ (700) 4,955,524

Total revenues 140,334 141,075 1,853,857 38,053 1,134,725 477,317 4,061,031 973,911 1,471,545 (700) 10,291,148

Expenditures:Certificated salaries 117,844 117,844Classified salaries 75,566 672,307 83,817 53,682 2,245 887,617Employee benefits 63,479 313,487 31,063 27,582 188 435,799Books and supplies 9,519 698,981 8,651 47,363 764,514Contract services and

operating expenditures 2,621 247,310 21,794 99,246 243,769 68,752 12,487 695,979Capital outlay 24,349 6,970 1,214,760 6,370 312,955 1,565,404Debt service:

Principal retirement 26,000 9,502 758,068 76,334 869,904Interest 760 701,932 4,335 707,027

Total expenditures 269,029 273,310 1,730,918 106,216 1,582,060 160,278 6,370 375,238 1,460,000 80,669 6,044,088

(Deficiency) excess ofrevenues (under) overexpenditures (128,695) (132,235) 122,939 (68,163) (447,335) 317,039 4,054,661 598,673 11,545 (81,369) 4,247,060

Other financing sources (uses):Operating transfers in 139,999 33,520 60,000 82,069 315,588Operating transfers out (5,455) (16,743) (75,772) (300,000) (397,970)

Total other financingsources (uses) 134,544 16,777 (75,772) 60,000 (300,000) 82,069 (82,382)

Net change in fundbalances 5,849 (115,458) 47,167 (8,163) (447,335) 17,039 4,054,661 598,673 11,545 700 4,164,678

Fund balances, July 1, 2010 12,515 115,458 124,338 2,176,602 2,271,277 60,058 148,035 1,006,799 5,915,082

Fund balances, June 30, 2011 $ 18,364 $ - $ 171,505 $ 2,168,439 $ 1,823,942 $ 77,097 $ 4,054,661 $ 746,708 $ 1,018,344 $ 700 $ 10,079,760


47


COMBINING STATEMENT OF CHANGES IN ASSETSAND LIABILITIES

ALL AGENCY FUNDS




Student Body Funds

Lincoln High School



Middle Schools



Total Agency Funds




48


ORGANIZATION

June 30, 2011

Western Placer Unified School District, a political subdivision of the State of California,was established in 1966 and is comprised of an area of approximately 170 square miles locatedin Placer County. There were no changes in the boundaries of the District during the year.The District currently operates six elementary schools, two middle schools, one high school,one continuation school and one adult school.

GOVERNING BOARD


Paul Carras President November 2012Paul Long Vice President November 2012Brian Haley Member November 2014Damian Armitage Member November 2014Kris Wyatt Clerk November 2014

ADMINISTRATION

Scott LeamanSuperintendent

Mary BoyleDeputy Superintendent, Educational Services

Joyce LopesAssistant Superintendent, Business Services

49




SecondPeriod Annual

Report Report

Elementary:Kindergarten 554 554First through Third 1,697 1,694Fourth through Eighth 2,402 2,403Home and Hospital 2 2Special Education 98 97

Total Elementary 4,753 4,750

Secondary:Regular Classes 1,359 1,346Special Education 47 46Compulsory Continuation Education 69 70Home and Hospital 2 3

Total Secondary 1,477 1,465

6,230 6,215

50




1986-87 NumberMinutes 1982-83 2010-11 of DaysRequire- Actual Actual Traditional

Grade Level ment Minutes Minutes Calendar Status

Kindergarten 36,000 31,680 36,000 180 In Compliance














51




Pass-Through




Special Education Cluster:84.027 Special Ed: IDEA Basic and Local Assistance

Entitlement, Part B, Sec 611 (Formerly 94-142) 13379 $ 999,27084.027A Special Ed: IDEA Preschool Local Entitlement,

Part B, Sec 611 (Age 3-5) 13682 108,52884.173 Special Ed: IDEA Preschool Grants, Part B,

Sec 619 13430 35,68084.391 Special Ed: ARRA IDEA Part B, Sec 611,

Basic Local Assistance 15003 339,70784.392 Special Ed: ARRA IDEA, Part B, Sec 619,

Preschool Grants 15000 11,21484.391 Special Ed: ARRA IDEA, Part B, Sec 611,

Preschool Local Entitlement 15002 23,353

Subtotal Special Education Cluster 1,517,752

Title I, Part A Cluster:84.010 NCLB: Title I, Part A, Basic Grants Low-Income

and Neglected 14329 587,69584.010 NCLB: Title I, Part A, Non-Program Improvement

LEAs with Program Improvement Schools 14796 5,78484.389 NCLB: ARRA Title I, Part A, Basic Grants Low-

Income and Neglected 15005 271,740

Subtotal Title I, Part A Cluster 865,219

84.394 ARRA: State Fiscal Stabilization Fund 25008 660,78984.365 NCLB: Title III, Limited English Proficiency Student

Program 14346 72,89184.367 NCLB: Title II, Part A, Improving Teacher Quality

Local Grants 14341 112,42284.386 NCLB: ARRA Title II, Part D, Enhancing Education

Through Technology (EETT), Formula Grants 15019 66084.186 NCLB: Title IV, Part A, Safe and Drug Free Schools

and Communities, Formula Grants 14347 8,54284.158 Department of Rehabilitation: Workability II, Transitions

Partnership 10006 48,32384.048 Carl D. Perkins Career and Technical Education:

Secondary, Section 131 14894 15,803

(Continued)

52


SCHEDULE OF EXPENDITURE OF FEDERAL AWARDS(Continued)


Pass-Through




84.287 NCLB: Title IV, Part B, 21st Century Community Learning Centers Program 14349 $ 5,229

84.330 NCLB: Title I, Part G, Advanced Placement Test Fee Reimbursement Program 14831 800

Total U.S. Department of Education 3,308,430

U.S. Department of Agriculture - Passed through CaliforniaDepartment of Education

10.553 Especially Needy School Breakfast 13526 195,34310.555 National School Lunch 13523 818,780

Total U.S. Department of Agriculture 1,014,123

U.S. Department of Health and Human Services - Passed through CaliforniaDepartment of Education

93.778 Department of Health Care Services (DHCS):Medi-Cal Billing Option 10013 76,579

Total U.S. Department of Health and Human Services 76,579

Total Federal Awards $ 4,399,132


53




RetireeBenefits

Fund

June 30, 2011 Unaudited Actual Financial ReportEnding Fund Balance $ 2,801,652

Adjustment to remove irrevocable trust activity (2,795,265)

June 30, 2011 Audited Financial StatementsEnding Fund Balance $ 6,387

There were no audit adjustments proposed to any other funds of the District.


54




(Budget)

2012 2011 2010 2009 General Fund

Revenues and other financing sources $ 46,149,848 $ 45,895,100 $ 48,194,692 $ 52,298,909

Expenditures 50,847,867 51,982,248 51,754,807 52,204,946Other uses and transfers out 128,169 207,519 1,344,650 4,983,441

Total outgo 50,976,036 52,189,767 53,099,457 57,188,387

Change in fund balance $ (4,826,188) $ (6,294,667) $ (4,904,765) $ (4,889,478)

Ending fund balance $ 5,066,692 $ 9,892,880 $ 16,187,547 $ 21,092,312

Available reserves $ 3,397,139 $ 6,900,603 $ 9,247,328 $ 16,213,794

Designated for economicuncertainties $ 2,900,947 $ 2,604,590 $ 2,611,308 $ 1,613,519

Undesignated fund balance $ 496,192 $ 4,296,013 $ 6,636,020 $ 14,600,275

Available reserves aspercentages of totaloutgo 6.7% 13.2% 17.4% 30.1%

All Funds

Total long-term liabilities $ 158,498,146 $ 160,493,080 $ 161,690,567 $ 159,408,076

Average daily attendanceat P-2, excluding AdultEducation and CharterSchool 6,230 6,230 6,155 6,090

The General Fund fund balance has decreased by $16,088,910 over the past three years. The fiscal year2011-2012 budget projects a decrease of $4,826,188. For a district this size, the state recommendsavailable reserves of at least 3% of total General Fund expenditures, transfers out, and other uses. Forthe year ended June 30, 2011, the District met this requirement.

Total long-term liabilities have increased by $1,085,004 over the past two years.

Average daily attendance has increased by 140 over the past two years. The District does not anticipatean increase in ADA for the 2011-2012 fiscal year.


55






Horizon Charter School Separate reportPartnerships for Student Centered Learning Separate report


56







The District has received incentive funding for increasing instructional time asprovided by the Incentives for Longer Instructional Day. This schedulepresents information on the amount of instructional time offered by the District,and whether the District complied with the provisions of Education CodeSections 46201 through 46206.


OMB Circular A-133 requires a disclosure of the financial activities of allfederally funded programs. This schedule was prepared to comply with A-133requirements, and is presented on the modified accrual basis of accounting.

The following schedule provides a reconciliation between revenues reported onthe Statement of Revenues, Expenditures and Change in Fund Balances andthe related expenditures reported on the Schedule of Expenditure of FederalAwards. The reconciling amounts represent Federal funds that have beenrecorded as revenues that have not been expended by June 30, 2011.

CFDA Description Number Amount


Add: State Fiscal Stabilization Funds spentfrom prior year awards 84.394 377,107

Less: Medi-Cal Billing Funds not spent 93.778 (40,858)

Total Schedule of Expenditure of FederalAwards $ 4,399,132

57



1. PURPOSE OF SCHEDULES (Continued)

D - Reconciliation of Unaudited Actual Financial Report with Audited FinancialStatements

This schedule provides the information necessary to reconcile the UnauditedActual Financial Report to the audited financial statements.


This schedule provides information on the District's financial condition over thepast three years and its anticipated condition for the 2011-2012 fiscal year, asrequired by the State Controller's Office.




Education Code Section 14502 requires certain disclosure in the financial statements ofdistricts which adopt Early Retirement Incentive Programs pursuant to Education CodeSections 22714 and 44929. For the fiscal year ended June 30, 2011, the District did notadopt this program.

58






SECTION I - SUMMARY OF AUDITORS' RESULTS


Type of auditors' report issued: Unqualified

Internal control over financial reporting:Material weakness(es) identified? Yes X NoSignificant deficiency(ies) identified not considered



FEDERAL AWARDS

Internal control over major programs:Material weakness(es) identified? Yes X NoSignificant deficiency(ies) identified not considered


Type of auditors' report issued on compliance formajor programs: Unqualified

Any audit findings disclosed that are required to bereported in accordance with Circular A-133,Section .510(a)? Yes X No


CFDA Number(s) Name of Federal Program or Cluster

84.027, 84.027A, 84.173, 84.39184.392 Special Education Cluster (Including ARRA)

84.010, 84.389 Title I, Part A Cluster (Including ARRA)84.394 ARRA: State Fiscal Stabilization Fund


Auditee qualified as low-risk auditee? X Yes No

STATE AWARDS

Internal control over state programs:Material weakness(es) identified? Yes X NoSignificant deficiency(ies) identified not considered


Type of auditors' report issued on compliance forstate programs: Unqualified

66





2011-01 DEFICIENCY - VACATION ACCRUAL (30000)

Criteria

Internal Controls- Safeguarding of Assets

Condition

The District has not prevented employees from exceeding the maximum vacation accrual asdefined by the District policy.

Effect

The potential exists for the accrued vacation liability to exceed the District’s available reserves.

Cause

The District continues to accrue vacation for employees who exceed the maximum allowablehours as defined by the Board Policy.

Fiscal Impact

The District recorded $29,918 in accruals that exceed the maximum allowed.

Recommendation

The District should put procedures in place to ensure vacation accruals are not exceeded.

Corrective Action Plan

Site principals and other managers, with the assistance of the Personnel Department will holdindividual meetings with all employees who have vacation accrual in excess of the contractuallimits. The supervisors will set forth a specific plan for how the employee will utilize vacationleave during 2011-12 in order to ensure that the employee does not carry over excess leave inthe subsequent fiscal year of 2012-2013.

67




SECTION III- FEDERAL AWARD FINDINGS AND QUESTIONED COSTS


68






69








2011-1

At Lincoln High School: Sub-receipt books are optional and

record keeping of cash receipts is notmaintained in a central location.

The ASB does not issue receipts forall fundraising transactions

The ASB does not require that adetailed schedule to support cashreceipts be submitted with the cashbeing deposited at the AdministrativeOffice.

Copies of checks issued are notmaintained

There is no evidence documentingthat revenue-producing activities areapproved by the student council, siteprincipal and school district.

We recommend the following: Sub-receipts should be used for all

sales and maintained in a centrallocation.

Receipts should be issued for allfundraising transactions.

Receipts or detailed schedulesdefining the number of itemsreceipted listing the unit price per itemshould be submitted to support thetotal cash receipts being deposited.

Copies of all checks issued should bemaintained.

All revenue-producing activitiesshould be approved by the studentcouncil, site principal and schooldistrict and be reflected in the studentcouncil minutes.

Implemented.

2011-2

Cash receipts collected at the school sitesare not being counted in dual custodyduring the reconciliation of the cash indrawers to the daily site sales.

The District should implement controls atindividual school sites to ensure allcafeteria cash collected for deposit iscounted by two individuals to verify fundsare properly accounted for.

Implemented.

70


STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS(Continued)



2011-3

The District has not prevented employeesfrom exceeding the maximum vacationaccrual as defined by the District policy.

The District should put procedures inplace to ensure vacation accruals are notexceeded.

Not implemented. See current year finding2011-01.

71


Appendix B Page 1

APPENDIX B

FORM OF CONTINUING DISCLOSURE CERTIFICATES

This Continuing Disclosure Certificate (the “Disclosure Certificate”) is executed and delivered by the ____________ DISTRICT (the “District”) in connection with the issuance by the Board of Supervisors of Placer County (the “Board”) in the name of the District of $_________ ____________ District (Placer County, California) 2012 Tax and Revenue Anticipation Notes (the “Notes”). The Notes are being issued pursuant to a resolution adopted by the Board of Trustees of the District on ________, 2012, and a resolution adopted by the Board on June 19, 2012 (collectively, the “Resolution”). The District covenants and agrees as follows:

Section 1. Definitions. In addition to the definitions set forth in the Resolution, which apply to

any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 2, the following capitalized terms shall have the following meanings:

“Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote

or consent with respect to, or to dispose of ownership of, any Notes (including persons holding Notes through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Notes for federal income tax purposes.

“Dissemination Agent” shall mean the District or any successor Dissemination Agent designated in

writing by the District and which has filed with the District a written acceptance of such designation. In the absence of such a designation, the District shall act as the Dissemination Agent.

“EMMA” or “Electronic Municipal Market Access” means the centralized on-line repository system

located at www.emma.msrb.org for documents filed with the MSRB pursuant to the Rule, such as official statements and disclosure information relating to municipal bonds, notes and other securities as issued by state and local governments.

“Listed Events” shall mean any of the events listed in Section 3 of this Disclosure Certificate. “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the

Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information which may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future.

“Participating Underwriter” shall mean the original underwriter of the Notes required to comply

with the Rule in connection with offering of the Notes. “Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Authority under

the Securities Exchange Act of 1934, as the same may be amended from time to time. Section 2. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and

delivered by the District for the benefit of the holders and Beneficial Owners of the Notes and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5).

Section 3. Reporting of Listed Events. (a) Reportable Events. The District shall, or shall cause the Dissemination (if not the District) to,

give notice of the occurrence of any of the following events with respect to the Notes:

(1) Principal and interest payment delinquencies. (2) Unscheduled draws on debt service reserves reflecting financial difficulties. (3) Unscheduled draws on credit enhancements reflecting financial difficulties.

Appendix B Page 2

(4) Substitution of credit or liquidity providers, or their failure to perform. (5) Defeasances. (6) Rating changes. (7) Tender offers. (8) Bankruptcy, insolvency, receivership or similar event of the obligated person. (9) 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 security.

Note: For the purposes of the event identified in subparagraph (8), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person 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 obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.

(b) Material Reportable Events. The District shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Notes, if material:

(1) Non-payment related defaults. (2) Modifications to rights of security holders. (3) Bond calls. (4) The release, substitution, or sale of property securing repayment of the securities. (5) The consummation of a merger, consolidation, or acquisition involving an

obligated person or the sale of all or substantially all of the assets of the obligated person, 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.

(6) Appointment of a successor or additional trustee, or the change of name of a

trustee.

(c) Time to Disclose. Whenever the District obtains knowledge of the occurrence of a Listed Event, the District shall, or shall cause the Dissemination Agent (if not the District) to, file a notice of such occurrence with EMMA, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days (as such term is defined in the applicable federal regulations) after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(5) and (b)(3) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to owners of affected Notes under the Resolution.

Section 4. Identifying Information for Filings with EMMA. All documents provided to EMMA

under this Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.

Appendix B Page 3

Section 5. Termination of Reporting Obligation. The District’s obligations under this Disclosure Certificate shall terminate upon the defeasance, prior redemption or payment in full of all of the Notes. If such termination occurs prior to the final maturity of the Notes, the District shall give notice of such termination in the same manner as for a Listed Event under Section 5.

Section 6. Dissemination Agent. (a) Appointment of Dissemination Agent. The District may, from time to time, appoint or engage a

Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor Dissemination Agent. If the Dissemination Agent is not the District, the Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the District pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the District.

(b) Compensation of Dissemination Agent. The Dissemination Agent shall be paid compensation by

the District for its services provided hereunder in accordance with its schedule of fees as agreed to between the Dissemination Agent and the District from time to time and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the District, Holders or Beneficial Owners, or any other party. The Dissemination Agent may rely and shall be protected in acting or refraining from acting upon any direction from the District or an opinion of nationally recognized bond counsel. The Dissemination Agent may at any time resign by giving written notice of such resignation to the District.

Section 7. Amendment; Waiver. Notwithstanding any other provision of this Disclosure

Certificate, the District may amend this Disclosure Certificate (and the Dissemination Agent shall agree to any amendment so requested by the District that does not impose any greater duties or risk of liability on the Dissemination Agent), and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:

(a) Change in Circumstances. If the amendment or waiver relates to the provisions of Sections 3(a),

4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Notes, or the type of business conducted;

(b) Compliance as of Issue Date. The undertaking, as amended or taking into account such waiver,

would, in the opinion of a nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Notes, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(c) Consent of Holders; Non-impairment Opinion. The amendment or waiver either (i) is approved by

the Note holders in the same manner as provided in the Resolution for amendments to the Resolution with the consent of Note holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Note holders or Beneficial Owners.

Section 8. Additional Information. Nothing in this Disclosure Certificate shall be deemed to

prevent the 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 notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the District chooses to include any information in any notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the District shall have no obligation under this Disclosure Certificate to update such information or include it in any future notice of occurrence of a Listed Event.

Section 9. Default. In the event of a failure of the District to comply with any provision of this

Disclosure Certificate, any Note holder or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District to comply with its obligations under this Disclosure Certificate. The sole remedy under this Disclosure

Appendix B Page 4

Certificate in the event of any failure of the District to comply with this Disclosure Certificate shall be an action to compel performance.

Section 10. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent

shall have only such duties as are specifically set forth in this Disclosure Certificate, and the District agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including 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 District under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Notes.

Section 11. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the District,

the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners from time to time of the Notes, and shall create no rights in any other person or entity.

Date: [Closing Date]

____________ DISTRICT By

Authorized Officer

Appendix C Page 1

APPENDIX C

PROPOSED FORM OF OPINIONS OF BOND COUNSEL

[Letterhead of Quint & Thimmig LLP]

[Closing Date] Board of Trustees ________________ District ________________ ________________ OPINION: $_________ ____________ District (Placer County, California) 2012 Tax and Revenue Anticipation Notes Members of the Board of Trustees:

We have acted as bond counsel to the __________ District (the “District”) in connection with the

issuance by the Board of Supervisors of Placer County (the “Board”) of $_________ principal amount of _____________ School District (Placer County, California) 2012 Tax and Revenue Anticipation Notes, dated September 1, 2011 (the “Notes”), pursuant to Article 7.6 (commencing with section 53850), Chapter 4, Part 1, Division 2, Title 5 of the California Government Code, a resolution adopted by the Board of Trustees of the District on _____________, 2011 (the “District Resolution”), and a resolution adopted by the Board on July 12, 2011 (the “Board Resolution” and, collectively, the “Resolutions”). We have examined the law and such certified proceedings and other papers as we deemed necessary to render this opinion.

As to questions of fact material to our opinion, we have relied upon representations of the Board

contained in the Board Resolution and of the District in the District Resolution and in the certified proceedings and certifications of public officials and others furnished to us, without undertaking to verify such facts by independent investigation.

Based upon our examination, we are of the opinion, as of the date hereof, that: 1. The District is duly created and validly existing as a school district with the power to perform

its obligations under the District Resolution, to cause the Board to issue the Notes in its name and to perform its obligations under the Board Resolution and the Notes.

2. The District Resolution has been duly adopted by the District. The Board Resolution has been

duly adopted by the Board and creates a valid first lien on the funds pledged under the Board Resolution for the security of the Notes.

3. The Notes have been duly authorized, issued and delivered by the Board and are valid and

binding general obligations of the District enforceable in accordance with their terms. 4. Subject to the District’s compliance with certain covenants, under present law, interest on the

Notes is excludable from gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the alternative minimum tax for individuals and corporations under the Internal Revenue Code of 1986, as amended (the “Code”), but is taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. Failure to comply with certain of such District covenants could cause interest on the Notes

Appendix C Page 2

to be includible in gross income for federal income tax purposes retroactively to the date of issuance of the Notes. Added for Dry Creek, Loomis and Western Placer Notes: It is also our opinion that the Notes are “qualified tax exempt obligations” under section 265(b)(3) of the Code.

5. Interest on the Notes is exempt from personal income taxation imposed by the State of

California. Ownership of the Notes may result in other tax consequences to certain taxpayers, and we

express no opinion regarding any such collateral consequences arising with respect to the Notes. The rights of the owners of the Notes and the enforceability of the Notes and the Resolutions may

be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and also may be subject to the exercise of judicial discretion in accordance with general principles of equity.

In rendering this opinion, we have relied upon certifications of the District and others with

respect to certain material facts. Our opinion represents our legal judgment based upon such review of the law and the facts that we deem relevant to render our opinion and is not a guarantee of a result. 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.

Respectfully submitted,

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