$21,665,000 plainwell community schools counties … with the delivery of the bonds by assured...

NEW ISSUE-Book-Entry-Only RATINGS†*: Moody’s Investors Service: AaaStandard & Poor’s Ratings Services: AAA

In the opinion of Thrun Law Firm, P.C., Bond Counsel, under existing law (i) the Bonds and the interest thereon are exempt from all taxation in the State of Michigan, except (a) inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof, and (b) pursuant to the Michigan Business Tax Act, certain taxpayers may have to take into account interest on the Bonds in determining Michigan business tax liabilities, (ii) the interest on the Bonds is excluded from gross income for federal income tax purposes to the extent and subject to the conditions described therein, and (iii) interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. See “TAX MATTERS” herein.

$21,665,000PLAINWELL COMMUNITY SCHOOLS

COUNTIES OF ALLEGAN, KALAMAZOO AND BARRYSTATE OF MICHIGAN

2008 SCHOOL BUILDING AND SITE BONDS(General Obligation - Unlimited Tax)

Dated: September 25, 2008 Due: May 1, as shown below

On May 6, 2008, the qualifi ed electors of Plainwell Community Schools, Counties of Allegan, Kalamazoo and Barry, State of Michigan (the “School District”) approved a proposal authorizing the School District to issue bonds in the sum of not to exceed $21,840,000 for school building and site purposes further described in this Offi cial Statement. Proceeds of the 2008 School Building and Site Bonds (General Obligation – Unlimited Tax) (the “Bonds”) will be used for such building and site purposes. The Bonds were authorized by the Board of Education of the School District by resolutions adopted on August 18, 2008 and September 4, 2008 (the “Resolutions”). The Bonds will pledge the full faith and credit of the School District for payment of the principal and interest thereon and will be payable from ad valorem taxes, which may be levied on all taxable property in the School District without limitation as to rate or amount.

The Bonds will be fully qualifi ed as of the date of delivery for the Michigan School Bond Qualifi cation and Loan Program pursuant to Act 92, Public Acts of Michigan, 2005, as amended, enacted pursuant to Article IX, Section 16 of the Michigan Constitution of 1963. Under the terms of said constitutional and statutory provisions, if for any reason the School District will be or is unable to pay the principal of and interest on the Bonds when due, the School District shall borrow and the State of Michigan shall lend to it an amount suffi cient to enable the School District to make the payment. See “QUALIFICATION BY THE STATE OF MICHIGAN” and APPENDIX A, “State Qualifi cation,” herein.

The Bonds are issuable only as fully registered bonds without coupons and, when issued, will be registered in the name of Cede & Co., as Bondholder and nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the Bonds. Purchases of benefi cial interests in the Bonds will be made in book-entry-only form in the denomination of $5,000 or any integral multiple thereof. Purchasers of benefi cial interests in the Bonds (the “Benefi cial Owners”) will not receive certifi cates representing their benefi cial interest in Bonds purchased. So long as Cede & Co. is the Bondholder, as nominee of DTC, references herein to the Bondholders or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Benefi cial Owners of the Bonds. See “THE BONDS--Book-Entry-Only System” herein.

Principal of and interest on the Bonds will be paid by The Huntington National Bank, Grand Rapids, Michigan (the “Paying Agent”). So long as DTC or its nominee, Cede & Co., is the Bondholder, such payments will be made directly to such Bondholder. Disbursement of such payments to the DTC Participants is the responsibility of DTC and disbursement of such payments to the Benefi cial Owners is the responsibility of the DTC Participants and Indirect Participants, as more fully described herein. Interest will be payable semiannually on May 1 and November 1, commencing May 1, 2009, to the Bondholders of record as of the applicable record dates herein described.

The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under a fi nancial guaranty insurance policy to be issued concurrently with the delivery of the Bonds by ASSURED GUARANTY CORP. (“Assured Guaranty”).

(Base CUSIP§: 726889)

Maturity AmountInterest

Rate Price CUSIP§ Maturity AmountInterest

Rate Price CUSIP§2010 $200,000 3.000% 101.092% HK7 2020 $1,830,000 5.000% 105.938% HV32011 200,000 3.000 100.872 HL5 2021 1,845,000 5.000 104.972 HW12012 200,000 3.250 101.323 HM3 2022 1,880,000 4.250 97.473 HX92013 200,000 3.250 100.850 HN1 2023 1,885,000 5.000 103.621 HY72014 225,000 3.500 101.268 HP6 2024 1,885,000 4.375 96.969 HZ42015 225,000 3.750 101.932 HQ4 2025 1,885,000 4.375 96.167 JA72016 500,000 3.750 101.119 HR2 2026 1,885,000 4.500 96.920 JB52017 500,000 4.000 101.820 HS0 2027 1,885,000 5.000 102.136 JC32018 725,000 4.000 100.791 HT8 2028 1,885,000 5.000 101.750 JD12019 1,825,000 5.000 107.325 HU5

THE BONDS MATURING ON OR AFTER MAY 1, 2019 ARE SUBJECT TO OPTIONAL REDEMPTION BEGINNING MAY 1, 2018, IN THE MANNER AND AT THE TIMES DESCRIBED HEREIN. SEE “THE BONDS – Optional Redemption” HEREIN.

The Bonds will be offered when, as and if issued by the School District and accepted by the Underwriters subject to the approving legal opinion of Thrun Law Firm, P.C., East Lansing, Michigan, Bond Counsel. Certain legal matters will be passed upon for the Underwriters by Miller, Canfi eld, Paddock and Stone, P.L.C., Lansing, Michigan. It is expected that the Bonds will be available for delivery through The Depository Trust Company on or about September 25, 2008.

This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Offi cial Statement to obtain information essential to the making of an informed investment decision.

Edward D. Jones & Co.The date of this Offi cial Statement is September 4, 2008

† For an explanation of the ratings, see “RATINGS” herein.* As of date of delivery.§ Copyright 2008, American Bankers Association. CUSIP data herein is provided by Standard & Poor’s CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc.

The School District shall not be responsible for the selection of CUSIP numbers, nor any representation made as to their correctness on the Bonds or as indicated above.

No dealer, broker, salesperson or other person has been authorized to give any information or to make any representation other than as contained in this Official Statement in connection with the offer made hereby and, if given or made, such other information or representation must not be relied upon as having been authorized by the School District or the Underwriters. This Official Statement and the information contained herein are subject to completion and amendment. These securities may not be sold nor may an offer to buy these securities be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Information herein has been obtained from the School District, The Depository Trust Company, and other sources believed to be reliable. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information (except for information under the section captioned "UNDERWRITING" which was obtained from the Underwriters).

Assured Guaranty makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, Assured Guaranty has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding Assured Guaranty supplied by Assured Guaranty and presented under the heading "BOND INSURANCE" and "APPENDIX G - Specimen Financial Guaranty Insurance Policy".

Upon issuance, the Bonds will not be registered under the Securities Act of 1933, as amended, or any state securities law and will not be listed on any stock or other securities exchange. Neither the Securities and Exchange Commission nor any other federal, state, municipal or other governmental entity or agency will have passed upon the adequacy of this Official Statement, or, except for the School District, approved the Bonds for sale.

IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE SCHOOL DISTRICT'S FINANCIAL RECORDS AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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PLAINWELL COMMUNITY SCHOOLS 600 School Drive

Plainwell, Michigan 49080-1595 (269) 685-5823

(269) 685-1108 (FAX)

BOARD OF EDUCATION

G. Philip Robertson, President Jennifer Loftus, Vice President

John W. Nyberg, Secretary Karen E. Gustafson, Treasurer

David J. Meert, Trustee Kim Shafer, Trustee

James K. Sterner, Trustee

ADMINISTRATIVE STAFF

Susan K. Wakefield, Superintendent of Schools Patricia Carr, Finance Director

BOND COUNSEL

Thrun Law Firm, P.C. East Lansing, Michigan

FINANCIAL ADVISOR

H.J. Umbaugh & Associates, Certified Public Accountants, LLP Lansing, Michigan

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TABLE OF CONTENTS Page INTRODUCTION ........................................................................................................................................ 1 PURPOSE AND SECURITY ....................................................................................................................... 1 ESTIMATED SOURCES AND USES OF FUNDS .................................................................................... 2 THE BONDS ................................................................................................................................................ 2

Description and Form of the Bonds ......................................................................................................... 2 Book-Entry-Only System ......................................................................................................................... 2 Transfer Outside Book-Entry-Only System ............................................................................................ 4 Optional Redemption ............................................................................................................................... 5 Notice of Redemption and Manner of Selection ..................................................................................... 5

QUALIFICATION BY THE STATE OF MICHIGAN ................................................................................ 5 TAX PROCEDURES ................................................................................................................................... 6 LEVY AND COLLECTION OF TAXES FOR PAYMENT

OF THE BONDS AND BONDHOLDERS' REMEDIES ...................................................................... 7 SOURCES OF SCHOOL OPERATING REVENUE .................................................................................. 7 LITIGATION ................................................................................................................................................ 8 TAX MATTERS .......................................................................................................................................... 9

State ......................................................................................................................................................... 9 Federal ..................................................................................................................................................... 9 Original Issue Discount ........................................................................................................................... 9 Original Issue Premium ......................................................................................................................... 10 Future Developments ............................................................................................................................. 10

APPROVAL OF LEGAL PROCEEDINGS ............................................................................................... 11 APPROVAL BY MICHIGAN DEPARTMENT OF TREASURY ............................................................ 11 BOND INSURANCE ................................................................................................................................. 11

The Insurance Policy ............................................................................................................................. 11 The Insurer ............................................................................................................................................. 12

RATINGS ................................................................................................................................................... 14 UNDERWRITING ...................................................................................................................................... 15 FINANCIAL ADVISOR'S OBLIGATION ................................................................................................ 15 CONTINUING DISCLOSURE .................................................................................................................. 15 OTHER MATTERS ................................................................................................................................... 16 APPENDIX A: State Qualification APPENDIX B: School District Data APPENDIX C: General Fund Budget Summary APPENDIX D: Audited Financial Statements and Notes to Financial Statements of the School District

for the Year Ended June 30, 2007 APPENDIX E: Draft Legal Opinion of Bond Counsel APPENDIX F: Form of Continuing Disclosure Agreement APPENDIX G: Specimen Financial Guaranty Insurance Policy

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OFFICIAL STATEMENT relating to

$21,665,000

PLAINWELL COMMUNITY SCHOOLS COUNTIES OF ALLEGAN, KALAMAZOO AND BARRY

STATE OF MICHIGAN 2008 SCHOOL BUILDING AND SITE BONDS

(General Obligation - Unlimited Tax)

INTRODUCTION

The purpose of this Official Statement, which includes the cover page and Appendices, is to furnish information in connection with the issuance and sale by Plainwell Community Schools, Counties of Allegan, Kalamazoo and Barry, State of Michigan (the "School District") of its 2008 School Building and Site Bonds (General Obligation - Unlimited Tax) (the "Bonds") in the amount of $21,665,000.

PURPOSE AND SECURITY

On May 6, 2008, the qualified electors of the School District approved the issuance of bonds in an aggregate amount of not to exceed $21,840,000 for the purpose of erecting, furnishing and equipping additions to and remodeling, refurnishing and re-equipping school district buildings; acquiring and installing educational technology improvements; developing and improving sites; and paying the costs of issuing the Bonds.

The Bonds will be issued by the School District pursuant to the provisions of Act 34, Public Acts of Michigan, 2001, as amended, and Act 451, Public Acts of Michigan, 1976, as amended.

The Bonds, as authorized for issuance by resolutions of the Board of Education adopted on August 18, 2008 and September 4, 2008 (the "Resolutions"), are a full faith and credit unlimited tax general obligation of the School District. The principal of and interest on the Bonds are payable from the proceeds of ad valorem taxes levied on all taxable property in the School District which may be levied without limitation as to rate or amount. As of the date of delivery, the Bonds will be fully qualified for participation in the State of Michigan School Bond Qualification and Loan Program. See "QUALIFICATION BY THE STATE OF MICHIGAN" and APPENDIX A, "State Qualification," in this Official Statement.

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ESTIMATED SOURCES AND USES OF FUNDS

SOURCES Par Amount of Bonds $21,665,000.00 Original Issue Discount (234,952.00) Original Issue Premium 511,490.75 Total Sources $21,941,538.75

USES Capital Projects Fund $21,730,000.00 Underwriters' Discount 60,662.00 Deposit to Debt Retirement Fund 1,454.24 Estimated Costs of Issuance1 149,422.51 Total Uses $21,941,538.75

THE BONDS

Description and Form of the Bonds

The Bonds will be issued in book-entry-only form as one fully registered Bond per maturity, without coupons, in the aggregate principal amount for each maturity set forth on the cover page hereof and may be purchased in denominations of $5,000 or any integral multiple thereof. The Bonds will be dated as of and bear interest from the date of delivery. Interest on the Bonds shall be payable semiannually each May 1 and November 1 to maturity or early redemption, commencing May 1, 2009. Interest on the Bonds shall be computed using a 360-day year with twelve 30-day months, and the Bonds will mature on the dates and in the principal amounts and will bear interest at the rates as set forth on the cover of this Official Statement.

The Huntington National Bank, Grand Rapids, Michigan or its successor will serve as the Paying Agent (the "Paying Agent") and also as bond registrar and transfer agent if the Bonds cease to be held in book-entry-only form. For a description of payment of principal and interest, transfers and exchanges and notice of redemption on the Bonds, which are held in the book-entry-only system, see "Book-Entry-Only System" below. In the event the Bonds cease to be held in the book-entry-only system, then interest on the Bonds shall be payable when due by check or draft to the person or entity who or which is, as of the fifteenth (15th) day of the month preceding each interest payment date (the "Record Date"), the registered owner of record, at the owner's registered address. See "Transfer Outside Book-Entry-Only System" below.

Book-Entry-Only System

The information in this section has been furnished by The Depository Trust Company, New York, New York ("DTC"). No representation is made by the School District, the Paying Agent or the Underwriters as to the completeness or accuracy of such information or as to the absence of material adverse changes in such information subsequent to the date hereof. No attempt has been made by the School District, the Paying Agent or the Underwriters to determine whether DTC is or will be financially or otherwise capable of fulfilling its obligations. Neither the School District nor the Paying Agent will have any responsibility or obligation to DTC Participants, Indirect Participants (both as defined below) or the persons for which they act as nominees with respect to the Bonds, or for any principal, premium, if any, or interest payment thereof.

_________________________ 1 Includes municipal bond insurance premium.

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DTC will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity and will be deposited with DTC.

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

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

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

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

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certain steps to augment transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the School District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Payments of principal, interest and redemption amounts, if any, on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the School District or the Paying Agent, on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC (nor its nominee), Paying Agent, or School District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments of principal, interest and redemption amounts, if any, to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) are the responsibility of the School District or Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.

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

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

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

Transfer Outside Book-Entry-Only System In the event that the book-entry-only system is discontinued, the following provisions would apply to the Bonds. The Paying Agent shall keep the registration books for the Bonds (the "Bond Register") at its corporate trust office. Subject to the further conditions contained in the Resolutions, the Bonds may be transferred or exchanged for one or more Bonds in different authorized denominations upon surrender thereof at the corporate trust office of the Paying Agent by the registered owners or their duly authorized attorneys; upon surrender of any Bonds to be transferred or exchanged, the Paying Agent shall record the transfer or exchange in the Bond Register and shall authenticate replacement bonds in

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authorized denominations; during the fifteen (15) days immediately preceding the date of mailing of any notice of redemption or any time following the mailing of any notice of redemption, the Paying Agent shall not be required to effect or register any transfer or exchange of any Bond which has been selected for such redemption, except the Bonds properly surrendered for partial redemption may be exchanged for new Bonds in authorized denominations equal in the aggregate to the unredeemed portion; the School District and the Paying Agent shall be entitled to treat the registered owners of the Bonds, as their names appear in the Bond Register as of the appropriate dates, as the owners of such Bonds for all purposes under the Resolutions. No transfer or exchange made other than as described above and in the Resolutions shall be valid or effective for any purposes under the Resolutions.

Optional Redemption

The Bonds or portions of Bonds in multiples of $5,000, maturing on or after May 1, 2019, are subject to redemption prior to maturity at the option of the School District in such order as the School District may determine and by lot within any maturity, on any date occurring on or after May 1, 2018, at par and accrued interest to the date fixed for redemption.

Notice of Redemption and Manner of Selection

Notice of redemption of any Bond shall be given not less than thirty (30) days and not more than sixty (60) days prior to the date fixed for redemption by mail to the registered owner at the registered address shown on the registration books kept by the Paying Agent. The Bonds shall be called for redemption in multiples of $5,000 and Bonds of denominations of more than $5,000 shall be treated as representing the number of Bonds obtained by dividing the face amount of the Bond by $5,000 and such Bonds may be redeemed in part. The notice of redemption for Bonds redeemed in part shall state that upon surrender of the Bond to be redeemed a new Bond or Bonds in an aggregate face amount equal to the unredeemed portion of the Bond surrendered shall be issued to the registered owner thereof.

If less than all of the Bonds of any maturity shall be called for redemption prior to maturity, unless otherwise provided, the particular Bonds or portions of Bonds to be redeemed shall be selected by lot by the Paying Agent, in the principal amounts designated by the School District. Any Bonds selected for redemption will cease to bear interest on the date fixed for redemption, whether presented for redemption or not, provided funds are on hand to redeem said Bonds. Upon presentation and surrender of such Bonds at the corporate trust office of the Paying Agent, such Bonds shall be paid and redeemed.

So long as the book-entry-only system remains in effect, in the event of a partial redemption the Paying Agent will give notice to Cede & Co., as nominee of DTC, only, and only Cede & Co. will be deemed to be a holder of the Bonds. DTC is expected to reduce the credit balances of the applicable DTC Participants in respect of the Bonds and in turn the DTC Participants are expected to select those Beneficial Owners whose ownership interests are to be extinguished or reduced by such partial redemption, each by such method as DTC or such DTC Participants, as the case may be, deems fair and appropriate in its sole discretion.

QUALIFICATION BY THE STATE OF MICHIGAN

The Bonds will be fully qualified as of the date of delivery pursuant to Act 92 of the Public Acts of Michigan, 2005, as amended, enacted pursuant to Article IX, Section 16, of the Michigan Constitution of 1963. Under the terms of said constitutional and statutory provisions, if for any reason the School District will be or is unable to pay the principal of and interest on the Bonds when due, the School District shall borrow and the State of Michigan (the "State") shall lend to it from the School Loan Revolving Fund (the "School Loan Revolving Fund") established by the State, an amount sufficient to enable the School District to make the payment. Article IX, Section 16 of the State Constitution as

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implemented by Act 112 of the Public Acts of Michigan, 1961, as amended, authorizes the State, without approval of its electors, to borrow from time to time such amounts as shall be required, pledge the State's full faith and credit and issue its notes or bonds therefor, for the purpose of making loans to school districts as provided under such section. Loans to school districts for such purposes are made from the proceeds of such State borrowing. See also APPENDIX A, "State Qualification," in this Official Statement.

Complete financial statements of all of the State's funds as included in the State's Comprehensive Annual Financial Report ("CAFR") prepared by the State's Office of the State Budget are available from the Office of the State Budget website at www.michigan.gov/budget. The State has agreed to file its CAFR with the nationally recognized municipal securities information repositories and the State Information Depository (as described in Rule 15c2-12(b)(5) of the Securities and Exchange Commission) annually, so long as any bonds qualified for participation in the School Loan Revolving Fund remain outstanding.

TAX PROCEDURES

Article IX, Section 3, of the Michigan Constitution provides that the proportion of true cash value at which property shall be assessed shall not exceed 50% of true cash value. The Michigan Legislature by statute has provided that property shall be assessed at 50% of its true cash value, except as described below. The Michigan Legislature or the electorate may at some future time reduce the percentage below 50% of true cash value.

On March 15, 1994, the electors of the State approved an amendment to the Michigan Constitution permitting the Legislature to authorize ad valorem taxes on a non-uniform basis. The legislation implementing this constitutional amendment added a new measure of property value known as "Taxable Value." Beginning in 1995, taxable property has two valuations -- State Equalized Valuation ("SEV") and Taxable Value. Property taxes are levied on Taxable Value. Generally, Taxable Value of property is the lesser of (a) the Taxable Value of the property in the immediately preceding year, adjusted for losses, and increased by the lesser of the inflation rate or 5%, plus additions, or (b) the property's current SEV. Under certain circumstances, therefore, the Taxable Value of property may be different from the same property's SEV.

When property is sold or transferred, Taxable Value is adjusted to the SEV, which under existing law is 50% of the current true cash value. The Taxable Value of new construction is equal to current SEV. Taxable Value and SEV of existing property are also adjusted annually for additions and losses.

Responsibility for assessing taxable property rests with the local assessing officer of each township and city. Any property owner may appeal the assessment to the local assessor, to the local board of review and ultimately to the Michigan Tax Tribunal.

The Michigan Constitution also mandates a system of equalization for assessments. Although the assessors for each local unit of government within a county are responsible for actually assessing at 50% of true cash value, adjusted for Taxable Value purposes, the final SEV and Taxable Value are arrived at through several steps. Assessments are established initially by the municipal assessor. Municipal assessments are then equalized to the 50% levels as determined by the county's department of equalization. Thereafter, the State equalizes the various counties in relation to each other. SEV is important, aside from its use in determining Taxable Value for the purpose of levying ad valorem property taxes, because of its role in the spreading of taxes between overlapping jurisdictions, the distribution of various State aid programs, State revenue sharing and in the calculation of debt limits.

Property that is exempt from property taxes, e.g., churches, government property, public schools, is not included in the SEV and Taxable Value data in the Official Statement. Property granted tax

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abatements under Act 198, Public Acts of Michigan, 1974, amended, is recorded on a separate tax roll while subject to tax abatement. The valuation of tax-abated property is based upon SEV but is not included in either the SEV or Taxable Value data in the Official Statement except as noted.

LEVY AND COLLECTION OF TAXES FOR PAYMENT OF THE BONDS AND BONDHOLDERS' REMEDIES

The Resolutions authorizing the issuance of the Bonds and State law obligate the School District to levy a tax annually in an amount sufficient so that the estimated collections therefrom, together with amounts, if any, to be borrowed from the School Loan Revolving Fund for the Bonds, will be sufficient to pay promptly when due the principal of and interest on the Bonds becoming due prior to the time of the next tax levy. The tax levy shall not be subject to limitation as to rate or amount. Taxes for the payment of the principal of or interest on the Bonds are certified for collection each year within the school tax levies. In the event of the failure of the proper officials to certify taxes for the payment of the principal and interest requirements, a timely action in the nature of mandamus could compel certification and collection of adequate taxes or could compel the School District to make application to borrow the necessary funds from the School Loan Revolving Fund and thus prevent a default. However, if the paying agent for any bonds of the School District qualified for State loans as provided in Article IX, Section 16, of the State Constitution notifies the State Treasurer that the School District has failed to deposit sufficient funds to pay principal or interest on the qualified bonds when due or if a bondholder notifies the State Treasurer that the School District has failed to pay principal or interest on such qualified bonds when due, whether or not the School District has filed a draw request with the State Treasurer, the State Treasurer shall promptly pay the principal or interest on the qualified bonds when due.

If sufficient funds for full payment of debt service on the Bonds do not reach the Paying Agent five business days prior to the debt service payment due date, the Paying Agent will notify the School District of the amount of insufficient funds four business days prior to the due date. In the event that the School District does not immediately resolve the insufficient funds situation, the Paying Agent will notify the Michigan Department of Treasury of the deficiency three business days before the payment due date and the State Treasurer shall make the payment.

Any amount paid by the State Treasurer as described in the preceding paragraphs shall be deemed a loan made to the School District pursuant to the requirements of said Article IX, Section 16, of the State Constitution. Registered owners of the Bonds may attempt to obtain a money judgment against the School District for the principal amount of the Bonds or interest not paid when due and may periodically attempt to enforce the collection of the money judgment by requiring the tax assessing officers for the School District to place the amount of such judgment on the next tax rolls of the School District. The rights of the holders of the Bonds and the enforceability thereof are subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and their enforcement also may be subject to the exercise of judicial discretion in appropriate cases. See also APPENDIX A, "State Qualification," for the excerpt from the State Constitution and for the statute creating the School Loan Revolving Fund and the related opinions of the Attorney General of the State of Michigan.

SOURCES OF SCHOOL OPERATING REVENUE

On March 15, 1994, the electors of the State of Michigan approved a ballot proposition to amend the State Constitution of 1963, in part, to increase the State sales tax from 4% to 6% as part of a complex plan to restructure the source of funding of public education (K-12) in order to reduce reliance on local property taxes for school operating purposes and to reduce the per pupil finance resource disparities

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among school districts. The Legislature has appropriated funds to establish a base foundation allowance in 2008/09 ranging from $7,316 to $8,489 per pupil, depending upon the district's 1993/94 revenue. In the future, the foundation allowance may be adjusted annually by an index based upon the change in revenues to the State school aid fund and change in the total number of pupils statewide and the spread between the high and low per pupil allowance is reduced. The foundation allowance is funded by locally raised property taxes plus State aid. The source of revenues for the State's contribution to the foundation allowance is derived from a mix of taxing sources, including but not limited to, a statewide property tax of 6 mills on all taxable property1, a State sales and use tax, a real estate transfer tax and a cigarette tax. See "STATE AID PAYMENTS" in APPENDIX B of this Official Statement.

School districts are required to levy a local property tax of not more than 18 mills or the number of mills levied in 1993 for school operating purposes, whichever is less, on non-homestead properties2 in order for the district to receive its per pupil foundation allowance. An intermediate school district may seek voter approval for three enhancement mills for distribution to local constituent school districts on a per pupil basis. The enhancement mills are not counted toward the foundation allowance. Furthermore, districts whose per pupil foundation allowance in 2008/09 calculates to an amount in excess of $8,489 are authorized to levy additional millage to obtain the foundation allowance, first by levying such amount of the 18 mills against homestead property3 as is necessary to hold themselves harmless and, if the 18 mills is insufficient, to then levy such additional mills against all property uniformly as is necessary to obtain the foundation allowance. The School District's per pupil foundation allowance does not exceed $8,489, and the School District does not levy such additional millage. The School District's voted millage will expire in the amounts and on the dates shown in APPENDIX B of this Official Statement.

State aid appropriations and the payment schedule for state aid may be changed by the Legislature at any time.

THE SOURCES OF THE SCHOOL DISTRICT'S OPERATING REVENUE DO NOT IMPACT THE TAXING AUTHORITY OF THE SCHOOL DISTRICT FOR PAYMENT OF GENERAL OBLIGATION UNLIMITED TAX SCHOOL BONDS AND DO NOT AFFECT THE OBLIGATION OF THE SCHOOL DISTRICT TO LEVY TAXES FOR PAYMENT OF DEBT SERVICE ON GENERAL OBLIGATION UNLIMITED TAX BONDS OF THE SCHOOL DISTRICT, INCLUDING THE BONDS OFFERED HEREIN.

LITIGATION

The School District has not been served with any litigation, administrative action or proceeding, and to the knowledge of the appropriate officials of the School District no litigation or administrative action or proceeding has been threatened against it, seeking to restrain or enjoin the issuance and delivery of the Bonds, or questioning or contesting the validity of the Bonds or the proceedings or authorities under which they are authorized to be issued, sold, executed and delivered. A certificate to such effect will be delivered to the Underwriters at the time of the original delivery of the Bonds.

_________________________ 1 "Taxable property" does not include industrial personal property. 2 "Non-homestead property" includes all taxable property other than principal residence, qualified agricultural property, qualified forestry property and industrial personal property. Commercial personal property is exempt from the first 12 mills of not more than 18 mills levied by school districts. 3 "Homestead property", in this context, means principal residence, qualified agricultural property, qualified forestry property, industrial personal property and commercial personal property.

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TAX MATTERS

State

In the opinion of Thrun Law Firm, P.C., East Lansing, Michigan ("Bond Counsel"), based on its examination of the documents described in its opinion, under existing State of Michigan statutes, regulations, rulings and court decisions, the Bonds and the interest thereon are exempt from all taxation in the State of Michigan, except (i) inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof, and (ii) pursuant to Act 36, Public Acts of Michigan of 2007, as amended, the Michigan Business Tax Act, certain taxpayers may have to take into account interest on the Bonds in determining Michigan business tax liabilities.

Federal

In the opinion of Bond Counsel, based upon its examination of the documents described in its opinion, under existing statutes, regulations, rulings and court decisions, the interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that certain corporations must take into account interest on the Bonds in determining adjusted net current earnings for purposes of computing the alternative minimum tax imposed on such corporations. The opinions set forth in the preceding sentence are subject to the condition that the School District comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The School District has covenanted to comply with such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. Bond Counsel will express no opinion regarding other federal tax consequences with respect to the Bonds.

There are additional federal tax consequences relative to the Bonds and the interest thereon. The following is a general description of some of these consequences but is not intended to be complete or exhaustive and investors should consult with their tax advisors with respect to these matters. Prospective purchasers of the Bonds should be aware that (i) interest on the Bonds is included in the effectively connected earnings and profits of certain foreign corporations for purposes of calculating the branch profits tax imposed by Section 884 of the Code, (ii) interest on the Bonds may be subject to a tax on excess net passive income of certain S Corporations imposed by Section 1375 of the Code, (iii) interest on the Bonds is included in the calculation of modified adjusted gross income for purposes of determining the taxability of social security or railroad retirement benefits, (iv) the receipt of interest on the Bonds by life insurance companies may affect the federal tax liability of such companies, (v) in the case of property and casualty insurance companies, the amount of certain loss deductions otherwise allowed is reduced by a specific percentage of, among other things, interest on the Bonds, (vi) holders of the Bonds may not deduct interest on indebtedness incurred or continued to purchase or carry the Bonds and (vii) commercial banks, thrift institutions and other financial institutions may not deduct their costs of carrying certain obligations such as the Bonds.

Original Issue Discount

The initial public offering prices of certain Bonds, as set forth on the cover page of this Official Statement, may be less than the stated redemption prices at maturity (hereinafter referred to as the "OID Bonds"), and, to the extent properly allocable to each owner of such OID Bond, the original issue discount is excludable from gross income for federal income tax purposes with respect to such owner. Original issue discount is the excess of the stated redemption price at maturity of an OID Bond over the initial offering price to the public (excluding bond houses and brokers) at which price a substantial

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amount of the OID Bonds were sold. Under Section 1288 of the Code, original issue discount on tax-exempt bonds accrues on a compound basis. For an owner who acquires an OID Bond in this offering, the amount of original issue discount that accrues during any accrual period generally equals (i) the issue price of such OID Bond plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (ii) the yield to maturity on such OID Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), less (iii) any interest payable on such OID Bond during such accrual period. The amount of original issue discount so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excluded from gross income for federal income tax purposes, and will increase the owner's tax basis in such OID Bond. Any gain realized by an owner from a sale, exchange, payment or redemption of an OID Bond would be treated as gain from the sale or exchange of such OID Bond. Owners of OID Bonds should consult with their individual tax advisors to determine whether the application of the original issue discount federal regulations will require them to include, for state and local income tax purposes, an amount of interest on the OID Bonds as income even though no corresponding cash interest payment is actually received during the tax year.

Original Issue Premium

For federal income tax purposes, the initial offering prices to the public (excluding bond houses and brokers) of certain Bonds, as set forth on the cover of this Official Statement, may be greater than the stated redemption prices at maturity (the "Premium Bonds"), and constitutes for the original purchasers of the Premium Bonds an amortizable bond premium. Such amortizable bond premium is not deductible from gross income but is taken into account by certain corporations in determining adjusted current earnings for the purpose of computing the alternative minimum tax, which may also affect liability for the branch profits tax imposed by Section 884 of the Code. The amount of amortizable bond premium allocable to each taxable year is generally determined on the basis of a taxpayer's yield to maturity determined by using the taxpayer's basis (for purposes of determining loss on sale or exchange) of such Premium Bonds and compounding at the close of each six-month accrual period. The amount of amortizable bond premium allocable to each taxable year is deducted from the taxpayer's adjusted basis of such Premium Bonds to determine taxable gain upon disposition (including sale, redemption or payment on maturity) of such Premium Bonds.

Future Developments

No assurance can be given that any future legislation or clarifications or amendments to the Code, if enacted into law, will not contain proposals which could cause the interest on the Bonds to be subject directly or indirectly to federal or state income taxation, adversely affect the market price or marketability of the Bonds, or otherwise prevent bondholders from realizing the full current benefit of the status of the interest thereon.

Furthermore, no assurance can be given that the impact of any future court decisions will not cause the interest on the Bonds to be subject directly or indirectly to federal or state income taxation, adversely affect the market price or marketability of the Bonds, or otherwise prevent bondholders from realizing the full current benefit of the status of the interest thereon.

It is to be understood that the rights of the holders of the Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases.

INVESTORS SHOULD CONSULT WITH THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THEIR ACQUISITION, HOLDING OR DISPOSITION OF THE BONDS,

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INCLUDING THE TREATMENT OF ORIGINAL ISSUE DISCOUNT OR ORIGINAL ISSUE PREMIUM.

APPROVAL OF LEGAL PROCEEDINGS

Legal matters incident to the authorization, issuance and sale by the School District of the Bonds and with regard to the tax-exempt status thereof are subject to the approving opinion of Thrun Law Firm, P.C., East Lansing, Michigan, Bond Counsel. Except to the extent necessary to issue its approving opinion as to the validity of the Bonds, Bond Counsel has made no inquiry as to any financial information, statements or materials contained in any financial documents, statements or materials that have been or may be furnished in connection with the authorization, issuance or marketing of the Bonds, and accordingly will not express any opinion with respect to the accuracy or completeness of any such financial information, statements or materials.

Certain legal matters will be passed upon for the Underwriters by their counsel, Miller, Canfield, Paddock and Stone, P.L.C., Lansing, Michigan.

APPROVAL BY MICHIGAN DEPARTMENT OF TREASURY

The School District has received a letter from the Department of Treasury of the State of Michigan stating that the School District is in material compliance with the criteria of the Revised Municipal Finance Act, Act No. 34, Public Acts of Michigan, 2001, as amended, for a municipality to be granted qualified status. The School District may therefore proceed to issue the Bonds without further approval from the Department of Treasury of the State of Michigan.

BOND INSURANCE

The following information is not complete and reference is made to Appendix G for a specimen of the financial guaranty insurance policy (the "Policy") of Assured Guaranty Corp. ("Assured Guaranty" or the "Insurer").

The Insurance Policy

Assured Guaranty has made a commitment to issue the Policy relating to the Bonds, effective as of the date of issuance of such Bonds. Under the terms of the Policy, Assured Guaranty will unconditionally and irrevocably guarantee to pay that portion of principal of and interest on the Bonds that becomes Due for Payment but shall be unpaid by reason of Nonpayment (the "Insured Payments"). Insured Payments shall not include any additional amounts owing by the Issuer solely as a result of the failure by the Trustee or the Paying Agent to pay such amount when due and payable, including without limitation any such additional amounts as may be attributable to penalties or to interest accruing at a default rate, to amounts payable in respect of indemnification, or to any other additional amounts payable by the Trustee or the Paying Agent by reason of such failure. The Policy is non-cancelable for any reason, including without limitation the non-payment of premium.

"Due for Payment" means, when referring to the principal of the Bonds, the stated maturity date thereof, or the date on which such Bonds shall have been duly called for mandatory sinking fund redemption, and does not refer to any earlier date on which payment is due by reason of a call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity (unless Assured Guaranty in its sole discretion elects to make any principal payment, in whole or in part, on such earlier date) and, when referring to interest on such Bonds, means the stated dates for payment of interest.

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"Nonpayment" means the failure of the Issuer to have provided sufficient funds to the Trustee or the Paying Agent for payment in full of all principal and interest Due for Payment on the Bonds. It is further understood that the term Nonpayment in respect of a Bond also includes any amount previously distributed to the Holder (as such term is defined in the Policy) of such Bond in respect of any Insured Payment by or on behalf of the Issuer, which amount has been recovered from such Holder pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court having competent jurisdiction that such payment constitutes an avoidable preference with respect to such Holder. Nonpayment does not include nonpayment of principal or interest caused by the failure of the Trustee or the Paying Agent to pay such amount when due and payable.

Assured Guaranty will pay each portion of an Insured Payment that is Due for Payment and unpaid by reason of Nonpayment, on the later to occur of (i) the date such principal or interest becomes Due for Payment, or (ii) the business day next following the day on which Assured Guaranty shall have received a completed notice of Nonpayment therefor in accordance with the terms of the Policy.

Assured Guaranty shall be fully subrogated to the rights of the Holders of the Bonds to receive payments in respect of the Insured Payments to the extent of any payment by Assured Guaranty under the Policy.

The Policy is not covered by any insurance or guaranty fund established under New York, California, Connecticut or Florida insurance law.

The Insurer

Assured Guaranty Corp. ("Assured Guaranty") is a Maryland-domiciled insurance company regulated by the Maryland Insurance Administration and licensed to conduct financial guaranty insurance business in all fifty states of the United States, the District of Columbia and Puerto Rico. Assured Guaranty commenced operations in 1988. Assured Guaranty is a wholly owned, indirect subsidiary of Assured Guaranty Ltd. ("AGL"), a Bermuda-based holding company whose shares are publicly traded and are listed on the New York Stock Exchange under the symbol "AGO." AGL, through its operating subsidiaries, provides credit enhancement products to the U.S. and global public finance, structured finance and mortgage markets. Neither AGL nor any of its shareholders is obligated to pay any debts of Assured Guaranty or any claims under any insurance policy issued by Assured Guaranty.

Assured Guaranty is subject to insurance laws and regulations in Maryland and in New York (and in other jurisdictions in which it is licensed) that, among other things, (i) limit Assured Guaranty's business to financial guaranty insurance and related lines, (ii) prescribe minimum solvency requirements, including capital and surplus requirements, (iii) limit classes and concentrations of investments, (iv) regulate the amount of both the aggregate and individual risks that may be insured, (v) limit the payment of dividends by Assured Guaranty, (vi) require the maintenance of contingency reserves, and (vii) govern changes in control and transactions among affiliates. Certain state laws to which Assured Guaranty is subject also require the approval of policy rates and forms.

Assured Guaranty's financial strength is rated "AAA" (stable) by Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), "AAA" (stable) by Fitch, Inc. ("Fitch") and "Aaa" (under review for possible downgrade) by Moody's Investors Service, Inc. ("Moody's"). Each rating of Assured Guaranty should be evaluated independently. An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market price of any security guaranteed by Assured Guaranty. Assured Guaranty does not guaranty the market price of the securities it guarantees, nor does it guaranty that the ratings on such securities will not be revised or withdrawn.

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Recent Developments

For recent developments regarding Assured Guaranty's insurance financial strength ratings, see AGL's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008 (which was filed by AGL with the SEC (as defined below) on August 8, 2008).

Capitalization of Assured Guaranty Corp.

As of June 30, 2008, Assured Guaranty had total admitted assets of $1,798,738,388 (unaudited), total liabilities of $1,339,900,327 (unaudited), total surplus of $458,838,061 (unaudited) and total statutory capital (surplus plus contingency reserves) of $1,109,675,386 (unaudited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. As of December 31, 2007, Assured Guaranty had total admitted assets of $1,361,538,502 (audited), total liabilities of $961,967,238 (audited), total surplus of $399,571,264 (audited) and total statutory capital (surplus plus contingency reserves) of $982,045,695 (audited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. The Maryland Insurance Administration recognizes only statutory accounting practices for determining and reporting the financial condition and results of operations of an insurance company, for determining its solvency under the Maryland Insurance Code, and for determining whether its financial condition warrants the payment of a dividend to its stockholders. No consideration is given by the Maryland Insurance Administration to financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") in making such determinations.

Incorporation of Certain Documents by Reference

The portions of the following documents relating to Assured Guaranty are hereby incorporated by reference into this Official Statement and shall be deemed to be a part hereof:

• The Annual Report on Form 10-K of AGL for the fiscal year ended December 31, 2007 (which was filed by AGL with the Securities and Exchange Commission (the "SEC") on February 29, 2008);

• The Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008 (which was filed by AGL with the SEC on May 9, 2008);

• The Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008 (which was filed by AGL with the SEC on August 8, 2008); and

• The Current Reports on Form 8-K filed by AGL with the SEC, as they relate to Assured Guaranty.

All consolidated financial statements of Assured Guaranty and all other information relating to Assured Guaranty included in documents filed by AGL with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, subsequent to the date of this Official Statement and prior to the termination of the offering of the Bonds shall be deemed to be incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing such consolidated financial statements.

Any statement contained in a document incorporated herein by reference or contained herein under the heading "Bond Insurance-The Insurer" shall be modified or superseded for purposes of this Official Statement to the extent that a statement contained herein or in any subsequently filed document which is incorporated by reference herein also modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Official Statement.

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Copies of the consolidated financial statements of Assured Guaranty incorporated by reference herein and of the statutory financial statements filed by Assured Guaranty with the Maryland Insurance Administration are available upon request by contacting Assured Guaranty at 1325 Avenue of the Americas, New York, New York 10019 or by calling Assured Guaranty at (212) 974-0100. In addition, the information regarding Assured Guaranty that is incorporated by reference in this Official Statement that has been filed by AGL with the SEC is available to the public over the Internet at the SEC's web site at http://www.sec.gov and at AGL's web site at http://www.assuredguaranty.com, from the SEC's Public Reference Room at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the office of the New York Stock Exchange at 20 Broad Street, New York, New York 10005.

Assured Guaranty makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, Assured Guaranty has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding Assured Guaranty supplied by Assured Guaranty and presented under the heading "BOND INSURANCE".

RATINGS

Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. ("S&P") will assign, as of the date of delivery of the Bonds, their municipal bond ratings of "Aaa" and "AAA", respectively, to the Bonds, with the understanding that the scheduled payment of principal of and interest on the Bonds when due will be guaranteed under a financial guaranty insurance policy to be issued concurrently with the delivery of the Bonds by Assured Guaranty. See "BOND INSURANCE" and APPENDIX G, "Specimen Financial Guaranty Insurance Policy" herein.

Moody's and S&P will also assign, as of the date of delivery of the Bonds, their municipal bond ratings of "Aa3" and "AA-", respectively, to the Bonds based upon the fact that each Bond will be fully qualified for participation in the Michigan School Bond Qualification and Loan Program as of its date of delivery. See "QUALIFICATION BY THE STATE OF MICHIGAN," "LEVY AND COLLECTION OF TAXES FOR PAYMENT OF THE BONDS AND BONDHOLDERS' REMEDIES" and APPENDIX A, "State Qualification," herein.

Moody's and S&P will also assign, as of the date of delivery of the Bonds, their underlying municipal bond ratings of "A3" and "A+", respectively, to the Bonds without regard to qualification of the Bonds for participation in the Michigan School Bond Qualification and Loan Program or municipal bond insurance.

No application has been made to any other ratings service for a rating on the Bonds. The School District furnished to Moody's and S&P certain materials and information in addition to that provided here. Generally, the rating agencies base their ratings on such information and materials, and on investigations, studies and assumptions. There is no assurance that such ratings will prevail for any given period of time or that they will not be revised downward or withdrawn entirely by Moody's and/or S&P if, in their judgment, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse affect on the market price of the Bonds. Any ratings assigned represent only the view of Moody's and S&P, respectively. Further information is available upon request from:

Moody's Investors Service World Trade Center New York, NY 10007 (212) 553-0315

Standard & Poor's Ratings Services 55 Water Street New York, NY 10014 (212) 438-1000

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UNDERWRITING

Fifth Third Securities, Inc. and Edward D. Jones & Co., L.P. (the "Underwriters"), have agreed, subject to the terms of the Bond Purchase Agreement, to purchase the Bonds from the School District. The Bond Purchase Agreement provides, in part, that the Underwriters, subject to certain conditions, will purchase from the School District the aggregate principal amount of Bonds for a purchase price as set forth therein. The Underwriters have further agreed to offer the Bonds to the public at the approximate initial offering prices as set forth on the cover hereto. The Underwriters may offer and sell the Bonds to certain dealers and others at prices lower than the offering prices stated on the cover hereto. The offering prices may be changed from time to time by the Underwriters. The aggregate underwriting fee equals 0.280 percent of the aggregate principal amount of the Bonds.

The Bond Purchase Agreement provides that the obligations of the Underwriters are subject to certain conditions, including, among other things, that (i) no event has occurred which impairs or threatens to impair the status of the Bonds or interest thereon as exempt from taxation in the State (other than as described under "TAX MATTERS – State") and the interest on the Bonds is excluded from gross income for federal income tax purposes and (ii) proceedings relating to the Bonds are not pending or threatened by the Securities and Exchange Commission. The Bond Purchase Agreement further provides that the School District will provide to the Underwriters within five business days of the date of the Bond Purchase Agreement sufficient copies of the Official Statement to enable the Underwriters to comply with the requirements of Rule 15c2-12(b)(4) under the Securities Exchange Act of 1934, as amended.

FINANCIAL ADVISOR'S OBLIGATION

H.J. Umbaugh & Associates, Certified Public Accountants, LLP, Lansing, Michigan (the "Financial Advisor") has been retained by the Issuer to provide certain financial advisory services. The information contained in the Official Statement was prepared in part by the Financial Advisor and is based on information supplied by various officials from records, statements and reports required by various local, county or state agencies of the State of Michigan in accordance with constitutional or statutory requirements.

To the best of the Financial Advisor's knowledge, all of the information contained in the Official Statement, which it assisted in preparing, while it may be summarized is (i) complete and accurate; (ii) does not contain any untrue statement of a material fact; and (iii) does not omit any material fact, or make any untrue statement which would be misleading in light of the circumstances under which these statements are being made. However, the Financial Advisor has not or will not independently verify the completeness and accuracy of the information contained in the Official Statement.

The Financial Advisor's duties, responsibilities and fees arise solely as financial advisor to the Issuer, and it has no underwriting, secondary market obligations or other responsibility to the Issuer. The Financial Advisor's fees are expected to be paid from Bond proceeds.

Further information concerning the Bonds may be secured from H.J. Umbaugh & Associates, Certified Public Accountants, LLP, 6639 Centurion Drive, Suite 100, Lansing, Michigan 48917, (517) 321-0110, Financial Advisor to the Issuer or from Plainwell Community Schools, 600 School Drive, Plainwell, Michigan 49080-1595, (269) 685-5823.

CONTINUING DISCLOSURE

Prior to delivery of the Bonds, the School District will execute a Continuing Disclosure Agreement (the "Agreement") for the benefit of the holders of the Bonds and the Beneficial Owners (as hereinafter defined under this caption only) to send certain information annually and to provide notice of

16

certain events to certain information repositories pursuant to the requirements of Rule 15c2-12(b)(5) (the "Rule") adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. "Beneficial Owner" means, under this caption only, any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including any person holding Bonds through nominees, depositories or any other intermediaries). The information to be provided on an annual basis, the events which will be noticed on an occurrence basis and the other terms of the Agreement, are set forth in APPENDIX F, "Form of Continuing Disclosure Agreement." Additionally, the School District shall provide certain annual financial information and operating data generally consistent with the information contained within the tables under the headings "Enrollments – Enrollment History," "Labor Relations," "Retirement Plan," "History of Valuations-State Equalized Valuation and Taxable Valuation," "Tax Levies and Collections," "State Aid Payments," "School District Tax Rates (Per $1,000 of Valuation)," "Largest Taxpayers," "School Loan Revolving Fund," and "Debt Statement – DIRECT DEBT," in APPENDIX B and General Fund Budget Summary in APPENDIX C.

A failure by the School District to comply with the Agreement will not constitute an event of default under the Resolutions and holders of the Bonds or Beneficial Owners are limited to the remedies described in the Agreement. A failure by the School District to comply with the Agreement must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. Further, the School District has not, in the previous five years, failed to comply, in all material respects, with any previous continuing disclosure agreements executed by the School District pursuant to the Rule.

OTHER MATTERS

All information contained in this Official Statement, in all respects, is subject to the complete body of information contained in the original sources thereof. In particular, no opinion or representation is rendered as to whether any projection will approximate actual results, and all opinions, estimates and assumptions, whether or not expressly identified as such, should not be considered statements of fact.

PLAINWELL COMMUNITY SCHOOLS COUNTIES OF ALLEGAN, KALAMAZOO AND BARRY STATE OF MICHIGAN By: G. Philip Robertson Its: President, Board of Education

ARTICLE IX, SECTION 16 OF THE

1963 STATE OF MICHIGAN CONSTITUTION

State loans to school districts.

Sec. 16. The state, in addition to any other borrowing power, may borrow from time to time such amounts as shall be required, pledge its faith and credit and issue its notes or bonds therefor, for the purpose of making loans to school districts as provided in this section.

Amount of loans.

If the minimum amount which would otherwise be necessary for a school district to levy in any year to pay principal and interest on its qualified bonds, including any necessary allowances for estimated tax delinquencies, exceeds 13 mills on each dollar of its assessed valuation as finally equalized, or such lower millage as the legislature may prescribe, then the school district may elect to borrow all or any part of the excess from the state. In that event the state shall lend the excess amount to the school district for the payment of principal and interest. If for any reason any school district will be or is unable to pay the principal and interest on its qualified bonds when due, then the school district shall borrow and the state shall lend to it an amount sufficient to enable the school district to make the payment.

Qualified bonds.

The term "qualified bonds" means general obligation bonds of school districts issued for capital expenditures, including refunding bonds, issued prior to May 4, 1955, or issued thereafter and qualified as provided by law pursuant to Section 27 or Section 28 of Article X of the Constitution of 1908 or pursuant to this section.

Repayment of loans, tax levy by school district.

After a school district has received loans from the state, each year thereafter it shall levy for debt service, exclusive of levies for nonqualified bonds, not less than 13 mill or such lower millage as the legislature may prescribe, until the amount loaned has been repaid, and any tax collections therefrom in any year over and above the minimum requirements for principal and interest on qualified bonds shall be used toward the repayment of state loans. In any year when such levy would produce an amount in excess of the requirements and the amount due to the state, the levy may be reduced by the amount of the excess.

Bonds, state loans, repayment.

Subject to the foregoing provisions, the legislature shall have the power to prescribe and to limit the procedure, terms and conditions for the qualification of bonds, for obtaining and making state loans, and for the repayment of loans.

Power to tax unlimited.

The power to tax for the payment of principal and interest on bonds hereafter issued which are the general obligations of any school district, including refunding bonds, and for repayment of any state loans made to school districts, shall be without limitations as to rate or amount.

Rights and obligations to remain unimpaired.

All rights acquired under Sections 27 and 28 of Article X of the Constitution of 1908, by holders of bonds heretofore issued, and all obligations assumed by the state or any school district under these sections, shall remain unimpaired.

ACT 92, PUBLIC ACTS OF MICHIGAN 2005, AS AMENDED School Bond Qualification, Approval and Loan Act*

AN ACT to prescribe the procedures, terms, and conditions for the qualification or approval of school bonds and other

bonds; to authorize this state to make loans to certain school districts for the payment of certain bonds and to authorize schools to borrow from this state for that purpose; to prescribe the terms and conditions of certain loans to school districts; to prescribe the powers and duties of certain state agencies and certain state and local officials; to provide for certain fees; to prescribe certain penalties; and to repeal acts and parts of acts.

The People of the State of Michigan enact:

Sec. 1. This act shall be known and may be cited as the “school bond qualification, approval, and loan act”.

*Act 92 was signed into law with immediate effect on July 20, 2005. It repealed Act 108, Public Acts of Michigan, 1961, as amended.

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APPENDIX ASTATE QUALIFICATION

Sec. 2. The purpose of this act is to implement section 16 of article IX of the state constitution of 1963 and to provide for loans to school districts.

Sec. 3. As used in this act:

(a) “Computed millage” means the number of mills in any year, not less than 7 mills and not more than 13 mills, determined on the date of issuance of the order qualifying the bonds or on a later date if requested by the school district and approved by the state treasurer, that, if levied by the school district, will generate sufficient annual proceeds to pay principal and interest on all the school district’s qualified bonds plus principal and interest on all loans related to those qualified bonds no later than the date specified in the note and repayment agreement entered into by the school district under this act.

(b) “Qualified bond” means a bond that is qualified under this act for state loans as provided in section 16 of article IX of the state constitution of 1963. A qualified bond includes the interest amount required for payment of a school district’s net interest obligation under an interest rate exchange or swap, hedge, or other agreement entered into pursuant to the revised municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821, but does not include a termination payment or similar payment related to the termination or cancellation of an interest rate exchange or swap, hedge, or other similar agreement. A qualified bond may include a bond issued to refund loans owed to the state under this act.

(c) “Qualified loan” means a loan made under this act or 1961 PA 108, MCL 388.951 to 388.963, from this state to a school district to pay debt service on a qualified bond.

(d) “Revolving loan fund” means the school loan revolving fund created under section 16c of the shared credit rating

act, 1985 PA 227, MCL 141.1066c. (e) “School district” means a general powers school district organized under the revised school code, 1976 PA 451,

MCL 380.1 to 380.1852, or a school district of the first class as described in the revised school code, 1976 PA 451, MCL 380.1 to 380.1852, having the power to levy ad valorem property taxes.

(f) “State treasurer” means the state treasurer or his or her duly authorized designee. (g) “Superintendent of public instruction” means the superintendent of public instruction appointed under section 3 of

article VIII of the state constitution of 1963.

(h) “Taxable value” means the value determined under section 27a of the general property tax act, 1893 PA 206, MCL 211.1 to 211.157.

Sec. 4. (1) A school district may issue and market bonds as qualified bonds if the state treasurer has issued an order granting qualification under this act.

(2) Except with regard to qualification of new bonds, nothing in this act shall be construed to alter the terms and

conditions applicable to outstanding qualified bonds issued in accordance with 1961 PA 108, MCL 388.951 to 388.963, and the loans associated with those qualified bonds. Unless otherwise amended as permitted by this act, outstanding qualified loans incurred in association with outstanding qualified bonds described in this subsection shall continue to bear interest and be due and payable as provided in the repayment agreements entered into between the school district and the state before the effective date of this act.

(3) The state treasurer may qualify bonds for which the state treasurer has received an application for prequalification

on or before May 25, 2005 without regard to the requirements of section 5(2)(f) if the electors of the school district approve the bonds at an election held during 2005.

Sec. 5. (1) A school district may apply to the state treasurer for preliminary qualification of a proposed school bond

issue by filing an application in the form and containing the information required by this act. (2) An application for preliminary qualification of a school bond shall contain all of the following information:

(a) The proposed ballot language to be submitted to the electors. (b) A description of the project or projects proposed to be financed. (c) A pro forma debt service projection showing the estimated mills the school district will levy to provide revenue the

school district will use to pay the qualified bonds. For the purpose of the pro forma debt service projection, the school district may assume for the first 5 years following the date of the application the average growth in taxable value for the 5 years

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preceding the date of the application and the lesser of that average growth rate or 3% for the remaining term of the proposed bonds.

(d) Evidence that the rate of utilization of each project to be financed will be at least 85% for new buildings and 60%

for renovated facilities. If the projected enrollment of the district would not otherwise support utilization at the rates described in this subsection, the school district may include an explanation of the actions the school district intends to take to address the underutilization, including, if applicable, actions to close school buildings or other actions designed to assure continued assured use of the facilities being financed.

(e) Evidence that the cost per square foot of the project or projects will be reasonable in light of economic conditions

applicable to the geographic area in which the school district is located. (f) Evidence that the school district will repay all outstanding qualified loans at the times described in section 9. (g) The weighted average age of all school buildings in the school district based on square footage. (h) The overall utilization rate of all school buildings in the school district, excluding special education purposes.

(i) The taxable value per pupil. (j) The total bonded debt outstanding of the school district and the total taxable value of property in the school district

for the school district fiscal year in which the application is filed. (k) A statement describing any environmental or usability problems to be addressed by the project or projects. (l) An architect’s analysis of the overall condition of the facilities to be renovated or replaced as a part of the project or

projects. (m) An amortization schedule demonstrating that the weighted average maturity of the qualified bond issue does not

exceed 120% of the average reasonably expected useful life of the facilities, excluding land and site improvements, being financed or refinanced with the proceeds of the qualified bonds, determined as of the later of the date on which the qualified bonds will be issued or the date on which each facility is expected to be placed in service.

Sec. 6. The state treasurer shall prequalify bonds of a school district if the state treasurer determines all of the

following: (a) The issuance of additional qualified bonds will not prevent the school district from repaying its outstanding

qualified loans on the earlier of the dates described in section 9. (b) The form of the ballot conforms with the requirements of this act.

Sec. 7. (1) The state treasurer shall qualify bonds of a school district if the state treasurer determines all of the

following: (a) A majority of the school district electors have approved the bonds.

(b) The terms of the bond issue comply with applicable provisions of the revised school code, 1976 PA 451, MCL

380.1 to 380.1852. (c) The school district is in compliance with the revised municipal finance act, 2001 PA 34, MCL 141.2101 to

141.2821. (d) The weighted average maturity of the qualified bond issue does not exceed 120% of the average reasonably

expected useful life of the facilities, excluding land and site improvements, being financed or refinanced with the proceeds of the bonds, determined as of the later of the date on which the qualified bonds will be issued or the date on which each facility is expected to be placed in service.

(e) The school district has filed any information necessary to update the contents of the original application to reflect

changes in any of the information approved in the preliminary qualification process. (f) The school district has paid a qualification fee of not less than $3,000.00 or the amount determined by the state

treasurer, which shall be approximately equal to the amount required to pay the estimated administrative expenses incurred under this act for the fiscal year in which the state treasurer imposes the fee.

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(2) An order qualifying bonds shall specify the principal and interest payment dates for all the bonds, the maximum

principal amount of and maximum interest rate on the bonds, the computed millage, if any, the final repayment date for any loans made with respect to those bonds, and other matters as the state treasurer shall determine or as are required by this act.

(3) If the application for prequalification demonstrates that the school district will borrow from this state in accordance

with this act, the state treasurer and the school district shall enter into a loan agreement setting forth the terms and conditions of any qualified loans to be made to the school district under this act.

(4) If a school district does not issue its qualified bonds within 180 days after the date of the order qualifying bonds,

the school district may reapply for qualification by filing an application and information necessary to update the contents of the original application for prequalification or qualification.

(5) The state treasurer shall qualify refunding bonds issued to refund qualified bonds if the state treasurer finds that the

refunding bonds comply with the provisions of the revised municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821. Sec. 8. A ballot submitted to the school electors of a school district after November 8, 2005 requesting authorization to

issue unlimited tax general obligations that will be guaranteed by this state in accordance with section 16 of article IX of the state constitution of 1963 shall inform the electors that if the school district borrows from this state to pay debt service on the bonds, the school district may be required to continue to levy mills beyond the term of the bonds to repay this state.

Sec. 9. (1) Except as otherwise provided in this act, a school district may borrow from the state an amount not greater than the difference between the proceeds of the school district’s computed millage and the amount necessary to pay principal and interest on its qualified bonds, including any necessary allowances for estimated tax delinquencies.

(2) For school districts having qualified loans outstanding as of July 20, 2005, the state treasurer shall review information relating to each school district regarding the taxable value of the school district and the actual debt service of outstanding qualified bonds as of July 20, 2005 and shall issue an order establishing the payment date for all those outstanding qualified loans and any additional qualified loans expected to be incurred by those school districts related to qualified bonds issued before July 20, 2005. The payment date shall be not later than 72 months after the date on which the qualified bonds most recently issued by the school district are due and payable.

(3) For qualified loans related to qualified bonds issued after July 20, 2005, the qualified loans shall be due not later than 72 months after the date on which the qualified bonds for which the school borrowed from this state are due and payable. This section does not preclude early repayment of qualified bonds or qualified loans.

(4) Except with regard to qualified loans described in subsection (2), each loan made or considered made to a school district under this act shall be for debt service on only a specific qualified bond issue. The state treasurer shall maintain separate accounts for each school district on the books and accounts of this state noting the qualified bond, the related qualified loans, the final payment date of the bonds, the final payment date of the qualified loans, and the interest rate accrued on the loans.

(5) For qualified loans relating to qualified bonds issued after July 20, 2005, a school district shall continue to levy the computed mills until it has completely repaid all principal and interest on its qualified loans.

(6) For qualified loans relating to qualified bonds issued before July 20, 2005, a school district shall continue to comply with the levy and repayment requirements imposed before July 20, 2005. Not less than 90 days after July 20, 2005, the state treasurer and the school district shall enter into amended and restated repayment agreements to incorporate the levy and repayment requirements applicable to qualified loans issued before July 20, 2005.

(7) Upon the request of a school district made before June 1 of any year, the state treasurer annually may waive all or a portion of the millage required to be levied by a school district to pay principal and interest on its qualified bonds or qualified loans under this section if the state treasurer finds all of the following:

(a) The school board of the school district has applied to the state treasurer for permission to levy less than the millage required to be levied to pay the principal and interest on its qualified bonds or qualified loans under subsection (1).

(b) The application specifies the number of mills the school district requests permission to levy.

(c) The waiver will be financially beneficial to this state, the school district, or both.

(d) The waiver will not reduce the millage levied by the school district to pay principal and interest on qualified bonds or qualified loans under this act to less than 7 mills.

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(e) The board of the school district, by resolution, has agreed to comply with all conditions that the state treasurer considers necessary.

(8) Except as otherwise provided in this act, loans shall bear interest at the greater of 3% or the average annual cost of funds computed annually on the basis of all state general obligations issued under section 16 of article IX of the state constitution of 1963 plus 0.125%. In the event this state has no outstanding general obligations under section 16 of article IX of the state constitution of 1963, the average annual cost of funds shall be computed on the basis of all state general obligations issued under section 15 of article IX of the state constitution of 1963 plus 0.125%.

Sec. 10. The state treasurer shall keep all certificates of qualification or approval in a permanent file and shall deliver copies of the certificates to the school district.

Sec. 11. The state treasurer shall promulgate rules to implement this act pursuant to the administrative procedures act

of 1969, 1969 PA 306, MCL 24.201 to 24.328.

Sec. 12. If a school district does not apply for prequalification or qualification or approval of a bond issue before the issuance of those bonds, the state treasurer shall not approve or qualify those bonds as qualified bonds under this act.

Sec. 13. (1) If a school district owes a balance due to the revolving loan fund or has been identified as a potential

borrower, the school district shall file an annual loan activity application with the state treasurer no less than 60 days before certifying its annual tax levy. The annual loan activity application shall be submitted in a format prescribed by the state treasurer and shall provide the taxable value, debt service, and any other information necessary to determine the proper required millage levy required under this act. The application shall contain a resolution passed by the local school board authorizing a designated school district official to complete all necessary documents to obtain a loan from the revolving loan fund or for making repayment to the revolving loan fund for the year.

(2) If a school district is eligible to borrow for debt service on qualified bonds, the school district shall file a draw

request with the state treasurer not less than 30 days before each date on which the school district owes the debt service. The draw request shall include all of the following:

(a) A statement of the debt service owed in the next 6 months. (b) A copy of the most recent bank statement showing the amount on hand in the debt service accounts for all qualified

bonds. (c) A statement of any revenue received for payment of the debt service since the date of the bank statement.

(d) A statement of any withdrawals made from the debt service account since the date of the bank statement.

(3) Not more than 7 days before the date established by the state treasurer for making qualified loans, the school

district shall confirm in writing the final qualified loan amount to be drawn on a certificate in the form prescribed by the state treasurer.

(4) Upon receipt of a qualified loan confirmation described in subsection (3), the state treasurer shall determine the

amount of the draw, which shall be the difference between the funds on hand in all debt service accounts and the amount of the debt service, and shall make a qualified loan in that amount to the school district no later than 6 days before the date the debt service is due.

(5) When a school district’s computed millage is sufficient to pay principal and interest on its qualified bonds, a school

district shall file a loan activity statement with the state treasurer no later than 30 days before the date set for payment of the qualified bonds setting forth all of the following:

(a) A statement of the debt service owed in the next 6 months. (b) A copy of the most recent bank statement showing the amount on hand in the debt service account for the qualified

bonds.

(c) A statement of any revenue received for payment of the debt service since the date of the bank statement. (d) A statement of any withdrawals made from the debt service account since the date of the bank statement. (6) Within 30 days after receipt of the loan activity statement under subsection (5), the state treasurer shall send an

invoice to the school district for the amount of repayment the school district owes on its outstanding qualified loans, which shall be the difference between the debt service payable or paid to bondholders and the funds on hand at the school district, less a

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reasonable amount of funds on hand, as determined by the state treasurer, to cover minimum balance requirements or potential tax disputes. The school district shall remit the amount specified in the invoice within 30 days after the dated date of the invoice.

Sec. 14. (1) If any paying agent for a school district’s qualified bonds notifies the state treasurer that the school district

has failed to deposit sufficient funds to pay principal and interest due on the qualified bonds when due, or if a bondholder notifies the state treasurer that the school district has failed to pay principal or interest on qualified bonds when due, whether or not the school district has filed a draw request with the state treasurer, the state treasurer shall promptly pay the principal or interest on the qualified bond when due.

(2) If the state treasurer pays any amount described in this section, the state treasurer shall bill the school district for the amount paid and the school district shall immediately remit the amount to the state treasurer. If the school district would have been eligible to borrow the debt service in accordance with the terms of this act, the school district shall enter into a loan agreement establishing the terms of the qualified loan as provided in this act. If the state treasurer directs the Michigan municipal bond authority to pay any amount described in this section, the state treasurer shall cause the Michigan municipal bond authority to bill the school district for the amount paid and the school district shall immediately remit the amount to the Michigan municipal bond authority.

Sec. 15. (1) If a school district that owes this state loan repayments relating to qualified bonds fails to levy at least the computed millage upon its taxable value for debt retirement purposes for qualified bonds and for repayment of a qualified loan made under this act while any part of the qualified loan is unpaid or defaults in its agreement to repay a qualified loan or any installment of a qualified loan, the school district shall increase its debt levy in the next succeeding year to obtain the amount necessary to repay this state the amount of the default plus a late charge of 3% and shall pay that amount to this state together with any other amounts owed during the next tax year. The school district may use other funds to repay this state including a transfer of general funds of the school district, if approved by the state treasurer. The state treasurer shall not disburse state school aid to the school district until the school district has made satisfactory arrangements with the state treasurer for the payment of the amount in default.

(2) If a school district fails to process any report, application, confirmation, or repayment as required under this act, the

state treasurer may withhold a school district’s state aid funds until the school district complies with the requirements under this act.

Sec. 16. The state treasurer shall deposit all fees collected under this act into a separate fund established within the state treasury, and shall use the proceeds of the fees solely for the purpose of administering and enforcing this act. The unexpended and unobligated balance of this fund at the end of each state fiscal year shall be carried forward over to the succeeding state fiscal year and shall not lapse to the general fund but shall be available for reappropriation for the next state fiscal year.

Sec. 17. A person who knowingly makes a false statement or conceals material information for the purpose of

obtaining qualification of a bond issue under this act or for the purpose of obtaining a qualified loan under this act, or who knowingly uses all or part of the proceeds of a qualified loan obtained under this act for any purpose not authorized by this act, is guilty of a felony punishable by imprisonment for not more than 4 years or a fine of not more than $5,000.00, or both.

Sec. 18. If a school district has completed the projects approved by the school electors of the school district to be funded from proceeds of qualified bonds, a school district may use any remaining proceeds of the qualified bonds as follows:

(a) To pay for enhancements to the projects approved by the school electors as described in the ballot proposing the qualified bonds.

(b) To pay debt service on the qualified bonds. (c) To repay this state.

Sec. 19. The state treasurer may designate in writing a person or persons to take any actions required to be taken by the

state treasurer under this act. The signature of any designee shall have the same force and effect as the signature of the state treasurer for all purposes of this act.

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OPINION #4422 OF THE ATTORNEY GENERAL, STATE OF MICHIGAN DATED MARCH 12, 1965

CONSTITUTIONAL LAW: SCHOOL BONDS: MUNICIPAL FINANCE COMMISSION:

Article 9, § 16, Michigan Constitution of 1963, requires school districts to borrow and State to lend sufficient sum to cover debt service payments on qualified bonds of school districts. Although this is not a pledge of full faith and credit of the State, the Municipal Finance Commission may and must enforce the duty of the district to borrow and the State to lend such sum.

No. 4422 March 12, 1965.

Hon. Sanford A. Brown State Treasurer Lansing, Michigan

You have asked in your letter of February 5 whether Article IX, § 16 of the Michigan Constitution of 1963 pledges the full faith and credit of the State to the payment of principal and interest of qualified school bonds.

Article IX, § 16 of the Michigan Constitution of 1963 provides in pertinent part as follows:

"The state * * * may borrow from time to time such amounts as shall be required, pledge its faith and credit and issue its notes or bonds therefor, for the purpose of making loans to school districts as provided in this section.

"If the minimum amount which would otherwise be necessary for a school district to levy in any year to pay principal and interest on its qualified bonds, including any necessary allowances for estimated tax delinquencies, exceeds 13 mills on each dollar of its assessed valuation as finally equalized, or such lower millage as the legislature may prescribe, then the school district may elect to borrow all or any part of the excess from the state. In that event the state shall lend the excess amount to the school district for payment of principal and interest. If for any reason any school district will be or is unable to pay the principal and interest on its qualified bonds when due, then the school district shall borrow and the state shall lend to it an amount sufficient to enable the school district to make the payment.

"The term 'qualified bonds' means general obligation bonds of school districts issued for capital expenditures, including refunding bonds, issued prior to May 4, 1955, or issued thereafter and qualified as provided by law pursuant to Section 27 or Section 28 of Article X of the Constitution of 1908 or pursuant to this section."

Thus, the school district is required to borrow and the State to lend an amount sufficient to enable the school district to make payments of principal and interest due on qualified bonds, and the state is empowered to borrow and to issue its notes or bonds for the purpose of making such loans, and to pledge its full faith and credit for such state bonds or notes.

The constitutional provision quoted does not pledge the full faith and credit of the state to all qualified bonds. The state is not primarily liable on qualified bonds of a school district. Rather, the state is required to lend whatever the school district needs, from time to time, to meet debt service requirements on such bonds.

You ask what remedies are available to enforce the obligation of the state.

The quoted language makes it mandatory upon the school district to borrow and upon the state to lend "an amount necessary to enable the school district to make the payment." Under Chapter II, Section 2(f) of the Municipal Finance Act [C.L. 1948 § 132.2; M.S.A. 1958 Rev. Vol. § 5.3188(4)f], the Municipal Finance Commission has power to enforce compliance with any law by, inter alia, the "institution of appropriate proceedings in the courts of the state, including those for writs of mandamus and injunction."

The Commission could and indeed must enforce the duty of the district to borrow and the state to lend. The bondholders also would have an action to enforce the duty of the district to borrow and of the state to lend.

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Thus the bondholders are assured of the availability of state funds where needed to meet debt service requirements on qualified bonds. This is not a pledge of full faith and credit, but gives the bondholders as much or more protection as would such a pledge.

FRANK J. KELLEY, Attorney General

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OPINION #4508 OF THE ATTORNEY GENERAL, STATE OF MICHIGAN DATED AUGUST 29, 1966

BONDS: Qualified bonds of school districts. CONSTITUTION OF 1963: School Bond Loan Fund. SCHOOLS: Bond Loans. STATE TREASURER: Payment of principal and interest on qualified school district bonds.

Authority of State Treasurer and procedures to be followed in paying from the School Bond Loan Fund principal and interest on qualified school bonds upon presentment by a bondholder.

No. 4508 Hon. Allison Green August 29, 1966. State Treasurer Capitol Building Lansing, Michigan

You have requested my opinion on what procedures should be followed by the state treasurer preparatory to making loans to local school districts which are unable to make payments on principal and interest of qualified school district bonds.1

Loans to bonded school districts are authorized by Article IX, Section 16, Constitution of 1963, which in part contains pertinent language:

"If the minimum amount which would otherwise be necessary for a school district to levy in any year to pay principal and interest on its qualified bonds, including any necessary allowances for estimated tax delinquencies, exceeds 13 mills on each dollar of its assessed valuation as finally equalized, or such lower millage as the legislature may prescribe, then the school district may elect to borrow all or any part of the excess from the state. In that event the state shall lend the excess amount to the school district for the payment of principal and interest. If for any reason any school district will be or is unable to pay the principal and interest on its qualified bonds when due, then the school district shall borrow and the state shall lend to it an amount sufficient to enable the school district to make the payment.

"The term 'qualified bonds' means general obligation bonds of school districts issued for capital expenditures, including refunding bonds, issued prior to May 4, 1955, or issued thereafter and qualified as provided by law pursuant to Section 27 or Section 28 of Article X of the Constitution of 1908 or pursuant to this section."

Article IX, Section 16, Constitution of 1963, is a continuation with minor revisions of the provisions relating to school bond financing which appeared in Sections 27 and 28 of Article X, Constitution of 1908. Section 27, Article X, Constitution of 1908, was proposed by joint resolution of the legislature in 1955 and approved by the people at the regular election of April 4, 1955. The loan provisions of Section 27 ceased to have effectiveness after July 1, 1962, and were replaced by the provisions of Section 28, Article X, Constitution of 1908, which was proposed by joint resolution of the legislature in 1960 and approved by the people at the general election of November 8, 1960. Section 28 by its own terms took effect on July 1, 1962.

Section 28, Article X, Constitution of 1908, was implemented by the legislature by the enactment of Act 108, P.A. 1961, which took effect September 8, 1961. The first section of Act 108, P.A. 1961, stated that the purpose of the act was to implement Section 28 of Article X of the Constitution of 1908. The Constitution of 1963 took effect on January 1, 1964. In anticipation of the effectiveness of that Constitution, the legislature passed Act 33, P.A. 1963, Second Extra Session, such act to take effect on January 1, 1964. Act 33, P.A. 1963, Second Extra Session, amended Sections 1, 3, 8 and 9 of Act 108, P.A. 1961, and further amended section 7 of Act 108, P.A. 1961, as amended by Act 131, P.A. 1962. The first section of amendatory Act 33 stated that the act's purpose was to implement Section 16 of Article IX of the Constitution of 1963. Subsequent amendment has been made to Sections 2, 4, 6, 9 and 10 of Act 108, P.A. 1961, by Act 169, P.A. 1964, which act also added a new Section 4a.2.

1In your letter of request you stated that you were familiar with Opinion No. 4422 issued by me on March 12, 1965, in which it was ruled that Article IX, Section 16, Constitution of 1963, requires school districts to borrow and the state to lend sufficient sums to cover debt service payments on qualified bonds of school districts but that this requirement is not a pledge of the full faith and credit of the state; the Municipal Finance Commission however may and must enforce the duty of the school district to borrow and have the state to lend the necessary amounts. 2Act 108, P.A. 1961, in its present amended form appears in M.S.A. 1965 Cum. Supp. § S 3.424(111) et seq.

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Answer to your question is to be found in amended Sections 6, 7 and 8 of the act. These sections present two situations in which you may become involved as state treasurer. The first situation is where a loan is to be made to the school district to permit the district to meet the principal and interest requirements on its bonds without a default in payment; the second is where the principal or interest on the bonds has not been paid when due upon proper presentation because of inadequate funds resulting in a default in payment.

Under amended Section 6 of the act, in any school district where the amount necessary to be levied in any year for principal and interest on qualified bonds exceeds 7 mills on each dollar of the assessed valuation of the school district as last equalized by the state, such school district on or before 60 days prior to the time of certification of its tax levy to the assessing officer shall file with the superintendent of public instruction3 a preliminary application for a loan from the state in the amount of any part of such excess over 7 mills which the school district does not propose to levy in such year.4 Amended Section 6 specifies the information to be supplied in the application. The superintendent of public instruction if he finds the application in proper form shall approve or deny the application in whole or in part and notify the school district of his action. Amended Section 7 of the act provides that if a loan from the state shall become necessary for the payment of principal and interest on qualified bonds in accordance with an approved preliminary application to the superintendent of public instruction or by virtue of a supplemental application, it shall be the duty of the superintendent of public instruction after audit to forward to the state treasurer a statement setting forth the amount to be loaned to the school district for the payment of principal and interest and the date on or before which loan shall be made.5 The superintendent shall prepare a voucher as a basis for the issuance of a warrant and upon receipt of such statement and warrant, it shall be the duty of the state treasurer to loan to the school district from the school bond loan fund the amount set forth in the statement of the superintendent of public instruction on or before the date specified therein. The state treasurer upon making such loan shall obtain from the school district a receipt for the amount so loaned which receipt shall specify the terms of repayment in accordance with the provisions of Section 16 of Article IX, Constitution of 1963 and the act. The school district treasurer upon receipt of the loan is required to deposit the same in the debt retirement fund to be used solely for the payment of principal and interest on qualified bonds.

The foregoing summaries of the procedures prescribed by amended Section 6 and 7 relate to the first situation above-described where the loan to the school district is to be made before the school district has defaulted in the payment of the principal or interest on its bonds.

The second situation described above is covered by amended Section 8 of the act which prescribes that in the event the principal or interest on any qualified bond is not paid when due, upon proper presentation of the bond or interest coupon to the agent or officer charged with making payment thereof, the state treasurer shall forthwith pay such principal or interest upon presentation of the bond or coupon to him. Any amount so paid by the state treasurer shall be deemed a loan to the school district made pursuant to the requirements of Section 16, Article IX, Constitution of 1963, and the act and the school district shall give a receipt therefor and repay the loan in the manner provided in the act for the repayment of loans.

The method of processing loans to school districts under amended Sections 6 and 7 before default in payment of principal or interest is adequately spelled out in those sections and no additional comment from me is necessary. Your real concern is in regard to the applicable procedures which you should follow in the situation where the school district has defaulted in the payment of principal or interest on its bonds and the bond or bonds and the interest coupons have not been paid when due by the paying agent because of lack of funds. In the event of such a happening it is assumed for the purposes of this opinion that the holder of the bond or of the interest coupon will make demand on you as state treasurer for the prompt payment of the obligation thereunder. Should such demand be made on you as state treasurer, you would be entitled to take the following action before making payment:

a. Ascertaining from the superintendent of public instruction or from the records in your own office that the bonds involved are duly qualified bonds as defined and described in amended Section 3 of the act;

b. Requiring proof reasonably satisfactory to you that the bond or bonds or the interest coupons have been properly presented for payment to the paying agent or officer charged with the responsibility for making payment thereof and that payment has been refused because sufficient monies had not been deposited by the school district for that purpose; such proof of nonpayment may be furnished you in the form of a certificate from the paying agent.

3Article VIII, Section 3, Constitution of 1963 requires the state board of education to appoint a superintendent of public instruction who shall be the principal executive officer of the department of education and who shall have powers and duties provided by law. Section 14 of Act 287, P.A. 1964 (M.S.A. 1965 Cum. Supp. § 15.1023(14)) specifies that after June 30, 1965, a reference in any law to the powers and duties of the superintendent of public instruction shall be deemed to be made to the state board of education, subject to exceptions not pertinent here, and that the state board of education may delegate any of its functions to the superintendent. Section 300 of Act 380, P.A. 1965, creates a department of education. Section 301 of that act provides that the head of the department of education is the state board of education. Section 303 of that act transfers by a Type III transfer all powers, duties and functions then vested by law in the superintendent of public instruction to the department of education. Section 305 of the act specifies that the principal executive officer of the department of education is the superintendent of public instruction. Act 380 appears in M.S.A. 1965 Cum. Supp. at § 3.29(1) et seq. Act 380, P.A. 1965, was amended without regard to the sections involved here by Act 407, P.A. 1965. Without doubt, under the foregoing provisions the state board of education could delegate to the superintendent of public instruction the performance of all of the functions and duties imposed on the board in connection with the School Bond Loan Fund. 4Other details set forth in amended Section 6 have been omitted. 5Other details set forth in amended Section 7 have been omitted.

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c. Notification to the school district given by you or your designee of the action taken by paying agent in refusing payment of the bonds or interest coupons on presentment because of the failure of the school district to have deposited funds with the paying agent for that purpose and verification from the school district of the fact of such failure to supply the required funds; notification to the school district by you or your designee that payment of the required amounts were to be made from the school bond loan fund by you as state treasurer and that such payment would be in the form of a loan to the school district which the school district would be required to be repay to the school bond loan fund in the manner required by law; the school district will be required to furnish you as state treasurer with a receipt evidencing the loan and specifying the terms of repayment, as required by law.

Upon the fulfillment of the above conditions in a manner reasonably acceptable to you, you would be authorized to make payment of the amounts due on the bonds and interest coupons and thereupon to demand their surrender and delivery to you as state treasurer.

Because of the safeguards built into the Michigan Constitution and statutes there should be no default of Michigan qualified school bonds. The School Loan Fund Program will have afforded the school district access to loan funds prior to the due date of the principle [sic] and interest on such bonds. In order to advise of the procedures in the remote possibility of nonpayment, however, I have set forth the foregoing guide lines [sic].

FRANK J. KELLEY, Attorney General

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APPENDIX B1 SCHOOL DISTRICT DATA

Location and Area

Plainwell Community Schools (the "School District") encompasses approximately 75 square miles in the southwestern portion of Michigan’s lower peninsula. The School District includes all of the City of Plainwell, most of Gun Plain Charter Township and portions of Martin and Otsego Townships in Allegan County, portions of Alamo Township and Cooper Charter Township in Kalamazoo County and portions of Orangeville and Prairieville Townships in Barry County.

Existing school facilities include three elementary schools, one middle school, and one high

school, an administration building, a bus garage, the Hicks Gymnasium, the Early Childhood Education Center and a maintenance building. The School District also leases a facility for the Renaissance High School alternative education program. Population2

The School District’s estimated 1980, 1990, 2000 and 2008 populations within its boundaries are as follows:

1980 11,7771990 13,1842000 14,3552008 15,000

The following is a record of the 1990 and 2000 populations for the municipal units that comprise

the School District, without regard to the School District boundaries.

1990 2000 % Change Allegan County 90,509 105,665 16.7 City of Plainwell 4,057 3,933 (3.1) Gun Plain Charter Township 4,754 5,637 18.6 Martin Township 2,487 2,514 1.1 Otsego Township 4,780 4,854 1.5 Kalamazoo County 223,411 238,603 6.8 Alamo Township 3,276 3,820 16.6 Cooper Charter Township 8,442 8,754 3.7 Barry County 50,057 56,755 13.4 Orangeville Township 2,880 3,321 15.3 Prairieville Township 3,409 3,175 (6.9)

1 Unless otherwise noted, the information contained in Appendix B was provided by the School District. 2 Sources: School District figures: 1980 - Wayne State University, Michigan Metropolitan Information Center, 1990 – Michigan Department of Management and Budget, 2000 – Northwest Michigan Council of Governments, 2008 – School District estimate. Municipal unit figures: U.S. Census of Population.

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School Administration Susan K. Wakefield, Superintendent of Schools Mrs. Wakefield has served as Superintendent of Schools since July 1, 2006. She is responsible for the day to day administration of the School District. She is appointed by the Board of Education and serves at its pleasure. Prior to this appointment, Mrs. Wakefield was the Principal of Plainwell High School from 2002 to 2006. She served Wayland Union Schools as the Assistant High School Principal from 1999 to 2002 and as a school social worker from 1992 to 1999. Mrs. Wakefield received her Bachelor of Arts degree in Secondary Education from Western Michigan University. She received a Master’s degree in Social Work and a second Master’s degree in School Administration from Grand Valley State University. She is a member of several professional and community organizations. Patricia Carr, Finance Director Ms. Carr has served as Finance Director of the School District since September 1, 2004. Prior to this appointment, she was the Finance Director of Mt. Pleasant Public Schools from 2002 to 2004, the Finance Manager of Beecher Community School District from 2001 to 2002 and the Finance Manager of Bentley Community Schools from 1998 to 2001. She served as Supervisor of Payroll and Accounting of Beecher Community School District from 1995 to 1998. Ms. Carr also has 25 years of experience working in the private sector as a financial manager, staff accountant and senior clerk. Ms. Carr received a Bachelor of Accountancy degree from Walsh College. She is a licensed Certified Public Accountant in Michigan and has her Chief Financial Officer certification from the Michigan School Business Officials. Ms. Carr is a member of the Michigan School Business Officials and the Michigan Association of Certified Public Accountants. Board of Education The School District is governed by seven elected Board of Education members who serve staggered four-year terms.

TERM EXPIRATION G. Philip Robertson President June 30, 2010 Jennifer Loftus Vice President June 30, 2012 John W. Nyberg Secretary June 30, 2012 Karen E. Gustafson Treasurer June 30, 2011 David J. Meert Trustee June 30, 2009 Kim Shafer Trustee June 30, 2009 James K. Sterner1 Trustee June 30, 2009

1 Mr. Steiner was appointed to fill a vacancy until June 30, 2009 for a Board position that expires June 30, 2010. An election will be held in May 2009 to fill the remainder of the term.

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Enrollments The following tables show total enrollments as of the Fall pupil count day, including special education and alternative education, at the School District for the past ten years and the present enrollment by grade. Enrollment History

2007/08 2,909 2002/03 2,8572006/07 2,904 2001/02 2,7992005/06 2,928 2000/01 2,7552004/05 2,831 1999/00 2,7522003/04 2,842 1998/99 2,762

The estimated enrollment for 2008/09 is 2,840 as provided by the School District. The projected enrollment for 2012/2013 is 2,905 as provided by Stanfred Consultants. 2007/2008 Enrollment by Grade

Kindergarten 211 7th 2351st 185 8th 2352nd 209 9th 2393rd 197 10th 2384th 235 11th 2165th 202 12th 2506th 205 Alternative Ed. 52 Total 2,909

School District Facilities

Grades Served

Year Constructed

Additions/ Remodeling

Building Enrollment

Elementary Schools: Cooper Elementary K-5 1957 1959, 1970, 1999, 2005, 2008 263 Gilkey Elementary K-5 1949 1970, 1992, 2001, 2005, 2008 406 Starr Elementary K-5 1956 1959, 1966, 1970, 2000, 2005 570 Middle School: Plainwell Middle 6-8 1972 1974, 2001, 2006 675 High Schools: Plainwell High 9-12 1959 1961, 1970, 2001, 2006 943 Renaissance High1 Alt. Ed. N/A 52 Additional Facilities: Administration Building 2004 Bus Garage 1957 1970, 2008 Hicks Gymnasium 1950 Early Childhood Ed. Center 1950 2000, 2007 Maintenance Building 2000 2007, 2008 ____ Total Enrollment 2,909

1 Renaissance High, an alternative education program, is a leased facility.

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Other Schools

There are no public school academies, parochial or private schools located within the School District’s boundaries. Labor Relations Class Number Affiliation Contract Expires Teachers 168 PEA/MEA 06/30/09 Administrators 16 Non-Affiliated Annual Custodians 28 SEIU 06/30/10 Bus Drivers 19 SEIU 06/30/10 Secretaries 13 Non-Affiliated 06/30/10 Aides 53 Non-Affiliated 06/30/10 Food Service 23 Non-Affiliated 06/30/10 Misc. Support Staff 15 Non-Affiliated 06/30/09 Total 335

During the past ten years, the School District has not experienced a strike by any of its bargaining units. Retirement Plan For the period from October 1 through September 30, the School District pays an amount equal to a percentage of its employees’ wages to the Michigan Public School Employees Retirement System (“MPSERS”) which is administered by the State of Michigan. These contributions are required by law and are calculated by using the contribution rates and periods provided in the table below. The School District's historical contributions to MPSERS are shown below. The School District does not have an unfunded accrued liability under MPSERS. For more information regarding this and other retirement plans see the School District’s audited financial statements in this Official Statement.

Contribution Period Contribution Rate October 1, 2008 – September 30, 2009 16.54% October 1, 2007 – September 30, 2008 16.72 October 1, 2006 – September 30, 2007 17.74 October 1, 2005 – September 30, 2006 16.34 October 1, 2004 – September 30, 2005 14.87

Fiscal Year Ending June 30, Contribution to MPSERS

2009 $2,233,000 (estimated) 2008 2,202,000 (unaudited) 2007 2,087,000 2006 2,170,000 2005 1,672,000

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Other Post-Employment Benefits MPSERS is a cost-sharing, multi-employer, statewide plan. Pension benefits and retiree health benefits are established by law and funded through employer contributions. The cost of retiree benefits is funded annually on a pay-as-you-go basis, with retirees paying some of the costs. Current year liability for retiree health benefits is reflected in the figures provided above. Further information regarding MPSERS, including retiree health benefits, can be found at www.michigan.gov/orsschools.

GENERAL FINANCIAL INFORMATION

Assessed Valuations Taxable property in the School District is assessed by the respective municipal assessors and is subject to review by the County Equalization Departments. Tax levies on property in Michigan are applied against the taxable value of all property on the ad valorem tax roll as finally equalized by the State of Michigan. In accordance with Act 539, Public Acts of Michigan, 1982, as amended, and Article IX, Section 3, of the 1963 Michigan Constitution, the ad valorem State Equalized Valuation ("SEV") represents 50 percent of true cash value. SEV does not include any value of tax exempt property (e.g. churches, governmental property and public schools) or property granted tax abatements under Act 198, Public Acts of Michigan, 1974, as amended. The assessed values of Industrial Facilities Tax (IFT) properties are maintained on a separate tax roll. Beginning in 1994, ad valorem property taxes are levied on the basis of taxable value, which is subject, in the case of some property, to assessment caps. See "TAX PROCEDURES" herein. The following tables show a history of assessed valuations for the School District and an analysis of the 2008 taxable valuation by class and by municipal unit. History of Valuations – State Equalized Valuation and Taxable Valuation1

State Equalized Valuation Taxable Valuation 2008 $537,236,381 $461,161,701 2007 529,325,262 449,736,952 2006 511,881,088 427,838,915 2005 487,183,586 406,781,486 2004 459,334,924 389,758,205

2008 Taxable Valuation by Class1

Taxable Valuation % of Total Taxable Valuation Agricultural $ 11,173,059 2.42% Commercial 40,818,108 8.85 Industrial 17,130,460 3.72 Residential 357,753,346 77.58 Commercial Personal 13,390,976 2.90 Industrial Personal 10,961,493 2.38 Utility Personal 9,934,259 2.15 Total $461,161,701 100.00%

1 Sources: County Equalization Departments.

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2008 Taxable Valuation by Municipal Unit 1

Name of Unit

Principal Residence2

Non-Homestead2

Total Taxable Value

% of Total Value

Allegan County City of Plainwell $ 57,688,494 $ 33,072,251 $ 90,760,745 19.68% Gun Plain Charter Township 160,287,798 36,738,902 197,026,700 42.72 Martin Township 1,815,157 278,185 2,093,342 0.45 Otsego Township 7,374,316 4,457,522 11,831,838 2.57 Kalamazoo County Alamo Township 16,666,181 5,239,528 21,905,709 4.75 Cooper Charter Township 113,623,435 19,884,461 133,507,896 28.95 Barry County Orangeville Township 3,261,440 515,950 3,777,390 0.82 Prairieville Township 251,746 6,335 258,081 0.06 Total $360,968,567 $100,193,134 $461,161,701 100.00% Renaissance Zone3

Act 376 of the Public Acts of Michigan, 1996 (“Act 376”), authorized the creation of six urban, three rural and two ex-military facility “renaissance zones.” The purpose of a renaissance zone is to foster economic development and stimulate industrial, commercial and residential improvements by, in part, providing certain tax credits or exemptions within the zone. Act 376 also authorized the creation of not more than 25 tool and die renaissance recovery zones within the State of Michigan.

There are three companies located within the School District that are participating in one of the tool and die renaissance recovery zones. The City of Plainwell includes one tool and die business, Travis Creek Tooling Company, with a 2008 Taxable Valuation of $102,606. Alamo Township includes one tool and die business, Tri-Mation Industries, Inc., with a 2008 Taxable Valuation of $154,798. Cooper Charter Township includes one tool and die business, Allynn Corporation, with a 2008 Taxable Valuation of $69,577. These properties are exempt from certain real and personal property taxes, including the six mill State education tax and the 18 mills which is authorized to be levied for School District operating purposes on non-homestead property. The State reimburses the School District for the loss of operating revenue from this exemption. These properties are not exempt from the School District’s debt millage. Industrial Facilities Tax (IFT) Valuation3

Act 198 of the Public Acts of Michigan, 1974, as amended ("Act 198") provides significant

property tax incentives to industry to renovate and expand aging plants and to build new industrial facilities in Michigan. Under the provisions of Act 198, qualifying cities, villages and townships may establish districts in which industrial firms are offered certain property tax incentives to encourage restoration or replacement of obsolete industrial facilities and to attract new industrial facilities.

1 Sources: County Equalization Departments. 2 Until 2008 all personal property was included in non-homestead valuations. Beginning in 2008, all industrial personal property is included in the homestead tax base. While commercial personal property continues to be included in the non-homestead tax base, it is exempt from 12 mills of the 18 operating mills levied on non-homestead property only. In the School District in 2008 industrial personal property has a taxable value of $10,961,493 and commercial personal property has a taxable value of $13,390,976. 3 Sources: Kalamazoo County Equalization Department and City of Plainwell Treasurer.

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Property tax owners situated in such districts pay an Industrial Facilities Tax ("IFT") in lieu of ad valorem taxes on the facility and equipment for a period of up to 12 years. For rehabilitated plant and equipment the IFT is determined by calculating the product of the state equalized valuation of the replacement facility in the year before the effective date of the abatement certificate multiplied by the total mills levied by all taxing units in the current year. New plants and equipment receiving their abatement certificate prior to January 1, 1994, are taxed at one-half the total mills levied by all taxing units, other than mills levied for local and intermediate school district operating purposes or under the State Education Tax Act, plus one-half of the number of mills levied for school operating purposes in 1993. For new facility abatements granted after 1993, new plants and equipment are taxed at one-half of the total mills levied as ad valorem property taxes by all taxing units except mills levied under the State Education Tax Act, plus the number of mills levied under the State Education Act. For new facility abatements granted after 1993, the State Treasurer may permit abatement of all, none or one-half of the mills levied under the State Education Tax Act. It must be emphasized, however, that ad valorem property taxes on land are not reduced in any way since land is specifically excluded under Act 198.

The total 2008 valuation of IFT abatements in the School District is as follows:

Name of Certificate Holder

Total 2008 Taxable Value of Certificates

Equivalent Valuation

Expires 12/30

Chippewa Development Inc. $ 156,900 $ 78,450 2013 Hytech Spring Company 987,850 493,925 2009, 2011, 2013, 2015 Michigan Pallet Inc. 294,400 147,200 2010 Motan Inc. 21,500 10,750 2009 Niro LLC 28,500 14,250 2016 Rizzo Packaging Inc. 240,500 120,250 2010, 2011 TDA Buddy Inc. 83,567 41,784 2008 TMD Machining Inc. 307,650 153,825 2009, 2013, 2018 Select Millwork Co. 52,650 26,325 2009, 2018 Tri-Mation Industries 31,752 15,876 2017 OIK Industries 117,948 58,974 2008 Total $2,323,217 $1,161,609 Tax Levies and Collections The School District's fiscal year begins July 1. School District property taxes are levied on December 1 of each fiscal year and are payable without penalty or interest on or before the following February 14. On March 1, unpaid real property taxes are returned delinquent to the County Treasurers for collection with penalties and interest. On the first Tuesday in May in each year, a tax sale is held by the Counties at which lands delinquent for taxes assessed in the third year preceding the sale, or in a prior year, are sold for the total of the unpaid taxes of those years.

Allegan County, Kalamazoo County and Barry County (the “Counties”), to date, have purchased and paid from their Tax Payment Funds the delinquent taxes on all real property of all taxing units in the Counties. The decision to make such payments is determined on an annual basis by the Counties. There is no guarantee that the payments will continue in future years. If the delinquent taxes which are due and payable to the Counties are not received by the Counties for any reason, the Counties have full rights of recourse against the School District to recover the amount of uncollected delinquent taxes, together with interest thereon, at the rate of one percent per month or fraction of a month until repaid to the Counties by the School District. Delinquent personal property taxes are negligible.

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A history of the operating tax levies and collections for the School District is as follows:

School Year

Operating Tax Levy

Current collections to March 1, Each Year

Collections Plus Funding to June 30, Each Year

2008/09 $1,785,609 In process of collection Not available 2007/08 2,191,140 $2,016,335 92.02% $2,191.140 100.00% 2006/07 2,111,599 1,874,257 88.76 2,099,159 99.41 2005/06 2,049,707 1,901,555 92.77 2,048,561 99.94 2004/05 1,986,692 1,798,782 90.54 1,983,392 99.83 2003/04 1,910,357 1,699,845 88.98 1,882,063 98.52

State Aid Payments The School District’s primary source of funding for operating costs is the State aid foundation allowance per pupil. The foundation allowance for all school districts in the State of Michigan is from $7,316 to $8,489 per pupil for the fiscal year 2008/09. In future years, this allowance may be adjusted by an index based upon the change in revenues to the State school aid fund and the change in the total number of pupils statewide. See “SOURCES OF SCHOOL OPERATING REVENUE” herein for additional information.

The following table shows a history and current year estimate of the School District’s Blended Pupil Count, Foundation Allowance Per Pupil and Total State Aid Payments including categoricals.

Year

Blended Pupil Count

Foundation Allowance Per Pupil

Total State Aid Payments

2008/09 (estimate) 2,850 $7,316 $19,164,561 (estimate) 2007/08 2,903 7,204 19,234,951 2006/07 2,905 7,085 19,081,437 2005/06 2,906 6,875 18,470,643 2004/05 2,830 6,700 17,409,381

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School District Tax Rates (Per $1,000 of Valuation)1 2008 2007 2006 2005 2004 Operating – Extra Voted2 17.8885 17.9442 17.9442 18.0000 18.0000Debt 7.0000 7.0000 7.0000 7.0000 7.0000Total Principal Residence 7.0000 7.0000 7.0000 7.0000 7.0000Total Non-Homestead 24.8885 24.9442 24.9442 25.0000 25.0000 Other Tax Rates (Per $1,000 of Valuation)3 2008 2007 2006 2005 2004 State Education Tax 6.0000 6.0000 6.0000 6.0000 6.0000Allegan County N/A 5.8974 5.8686 6.6480 6.6275City of Plainwell N/A 16.8905 16.8905 16.8937 17.6636Gun Plain Charter Township N/A 2.5431 2.4607 2.4639 1.5431Martin Township N/A 5.8570 5.8570 5.5369 5.5431Otsego Township N/A 1.1169 1.1222 1.1275 2.1226Kalamazoo County N/A 6.3362 6.1362 6.1362 6.1362Alamo Township N/A 0.8456 0.8456 0.8473 1.8450Cooper Charter Township N/A 0.8594 0.8594 0.8594 0.8594Barry County N/A 7.7495 7.9857 7.3998 7.7453Orangeville Township N/A 2.3756 2.3847 2.3847 2.3526Prairieville Township N/A 3.8460 3.8909 3.8014 3.8769Allegan Area ESA N/A 4.1217 4.1217 4.1298 4.1520 Constitutional Millage Rollback Article IX, Section 31 of the Michigan Constitution requires that if the total value of existing taxable property in a local taxing unit, exclusive of new construction and improvements, increases faster than the U.S. Consumer Price Index from one year to the next, the maximum authorized tax rate for that local taxing unit must be permanently reduced through a Millage Reduction Fraction unless the levy of new millage is authorized by a vote of the electorate of the local taxing unit.

1 Commencing in 2008, commercial personal property will be exempt from 12 mills of the School District’s 18 mills of voted operating millage on non-homestead property (all taxable property other than principal residences, qualified agricultural property and industrial personal property). The School District will levy authorized debt millage on all taxable property located within the School District. See “SOURCES OF SCHOOL OPERATING REVENUE” in this Official Statement. 2 The extra voted millage is levied on Non-Homestead property only. The School District’s operating levy of 18 mills and an additional 0.5 mills expires with the December 2014 tax levy. The 2006, 2007 and 2008 levies were reduced as a result of Article IX, Section 31 of the Michigan Constitution. See “Constitutional Millage Rollback” herein. 3 Sources: County Equalization Departments.

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Largest Taxpayers1 Shown below are the ten largest identifiable taxpayers in the School District based on their 2008 taxable valuations. The taxpayers listed below represent 9.22% of the School District’s 2008 Taxable Valuation of $461,161,701.

Taxpayer

Product or Service

Taxable Value

Equivalent

IFT2

Total Valuation Subject to Taxation

Packerland – Plainwell Inc.3 Beef processing $13,238,974 $13,238,974 Consumers Energy Company Utility 8,686,772 8,686,772 Meijer, Inc. Retail store 7,157,718 7,157,718 Michigan Electric Transmission Co. Utility 5,629,163 5,629,163 Life Care Centers of America Nursing home 2,001,715 2,001,715 West Michigan Venture LLC Property management 1,545,959 1,545,959 Hytech Spring Company Custom precision springs 812,300 $493,925 1,306,225 Plainwell Housing LDHA Apartments 1,182,807 1,182,807 Harold Ziegler Real Estate Inc. Real estate 1,145,614 1,145,614 DLP Limited Partnership Lake Doster golf course 1,113,178 _______ 1,113,178 TOTAL $42,514,200 $493,925 $43,008,125

Debt History and Future Financing The School District has no record of default on its obligations and does not anticipate issuing additional bonds in the next twelve months. Other Financing The School District currently has a $1,500,000 State Aid Note, dated August 20, 2008, at 1.70% that matures August 20, 2009 for operating cash flow purposes. For Other General Fund Obligations, see Appendix C, Notes to General Purpose Financial Statements. School Loan Revolving Fund4 As of June 30, 2008, the School District had an outstanding balance, including interest, of $4,355,702 in the School Loan Revolving Fund.

1 Sources: Allegan, Barry and Kalamazoo County Departments of Equalization and the City of Plainwell Treasurer. 2 The School District collects debt tax revenues at one-half rate of the IFT valuations. See “Industrial Facilities Tax (IFT) Valuations” herein. 3 Packerland – Plainwell Inc., formerly Murco Inc., is part of Smithfield Beef Group. 4 Source: Michigan Department of Treasury.

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Direct Debt (as of date of sale) 11/30/98 1998 School Building and Site Bonds (UTQ) $ 1,000,00011/20/02 2002 School Building and Site Bonds (UTQ) 6,745,00006/02/05 2005 Refunding Bonds (UTQ) 15,250,00003/27/07 2007 Refunding Bonds (UTQ) 7,900,000Direct Debt (as of date of sale) $30,895,000PLUS: The Bonds 21,665,000 NET DIRECT DEBT (as of the date of delivery) $52,560,000 Overlapping Debt as of September 30, 2008 1 % Applicable Municipality Amount Outstanding School District Share

47.62 Cooper Charter Township $ 2,000,000 $ 952,40096.47 Gun Plain Charter Township 280,000 270,1167.28 Otsego Township 1,500,000 109,2000.20 Prairieville Township 872,800 1,7467.15 Allegan County 9,526,260 681,1280.21 Barry County 22,835,000 47,9531.90 Kalamazoo County 37,046,372 703,881

16.97 Allegan Area ESA 175,000 29,6978.41 Otsego District Public Library 3,580,000 301,078

Net overlapping debt in the School District $3,097,199 NET DIRECT AND OVERLAPPING DEBT $55,657,199 Debt Ratios 2008 State Equalized Valuation (SEV) $537,236,3812008 Taxable Valuation $461,161,7012008 Population Estimate 15,000Direct Debt (Including New Issue) $52,560,000Direct/Overlapping Debt $55,657,199 Direct Debt Per Capita $3,504Direct/Overlapping Debt Per Capita $3,710 Per Capita 2008 SEV $35,816Ratio of Direct Debt to 2008 SEV 9.78%Ratio of Direct/Overlapping Debt to 2008 SEV 10.36% Per Capita 2008 Taxable Valuation $30,744Ratio of Direct Debt to 2008 Taxable Valuation 11.40%Ratio of Direct/Overlapping Debt to 2008 Taxable Valuation 12.07%

1 Source: Municipal Advisory Council of Michigan.

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Legal Debt Margin (as of date of delivery) 2008 State Equalized Valuation $537,236,381Debt Limit (15% of 2008 State Equalized Valuation) $80,585,457 Debt Outstanding (as of date of delivery) $52,560,000 Less bonds not subject to Debt Limit1 (as of date of delivery) (52,560,000) Total Subject to Debt Limit 0 Additional Debt Which Could Be Legally Incurred $80,585,457

ECONOMIC PROFILE

The School District is located in the southwestern portion of Michigan’s lower peninsula. The area is primarily residential. The School District is in close proximity to the commercial and industrial areas of Kalamazoo and Grand Rapids that offer a variety of employment opportunities and cultural and recreational activities.

The School District is located the following distances from these commercial and industrial areas:

12 miles north of Kalamazoo 37 miles south of Grand Rapids 94 miles southwest of Lansing

158 miles northeast of Chicago, Illinois 159 miles west of Detroit

Major Employers2

Company

Product or service

Approximate # of employees

Within School District (50 or more) Packerland – Plainwell Inc. 3 Beef processing and packing 950 Meijer, Inc. Retail store 325 Plainwell Community Schools Education 335 Borgess-Pipp Hospital Outpatient medical services 260 Life Care Centers of America Skilled nursing care facility 155 Hytech Spring Company Custom precision springs 85 Preferred Plastics Inc. Extruded plastic products 65 Rizzo Packaging Company Inc. Contract packaging, easels & folding 65 Plainwell Pines Nursing Center Skilled nursing facility 50

1 Section 1351(3) of Act 451, Public Acts of Michigan, 1976, as amended, provides that bonds not included in the computation of the legal debt margin are (1) any bond qualified under Article IX, Section 16, of the Michigan Constitution of 1963, and (2) deficit budget bonds authorized under Section 1356. In addition, Section 605 of Act 34, Public Acts of Michigan, 2001, as amended, provides, in relevant part, that debt evidenced by a refunding security shall not be deemed to be within any statutory or charter limitation of outstanding debt limit. 2 Sources: 2008 Harris Michigan Industrial and Services Directories, 2008 Michigan Manufacturers Directory, Kalamazoo Regional Chamber of Commerce, Greater Grand Rapids The Right Place, Inc., School District and individual employers. 3 Packerland – Plainwell is formerly Murco Inc. and is part of Smithfield Beef Group.

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Company

Product or service

Approximate # of employees

Allegan County (1,200 or more) Perrigo Company Pharmaceuticals 2,500 Johnson Controls Automotive Systems Auto interior trim 2,450 Haworth Inc. Office systems 1,900 Holland Community Hospital Hospital services 1,500 Magna Donnelly Corporation Auto mirrors 1,350 Parker Hannifin Corporation Brass fittings 1,200

Kalamazoo County (1,065 or more) Borgess Health Alliance Inc. Hospital services 4,642 Western Michigan University Higher education 4,045 Pfizer Corporation1 Pharmaceuticals 4,000 Bronson Healthcare System Hospital services 3,729 Kalamazoo Public Schools Education 2,200 Stryker Corporation Hospital and ambulance products 1,792 National City Bank Banking services 1,600 Meijer, Inc. Retail stores 1,306 Summit Polymers Injection molded plastics 1,230 Portage Public Schools Education 1,229 Kalamazoo Valley Community College Higher education 1,076 Kalamazoo County County government 1,065

Greater Grand Rapids Area (1,800 or more) Spectrum Health Hospital and medical services 14,308 Meijer, Inc. Retail stores 8,290 Steelcase Inc. Office systems 5,000 Spartan Stores, Inc. Food distributor and retailer 4,605 Axios Incorporated Employment services 4,100 Alticor Inc./Access Business Group Home care products 4,000 Wal-Mart General merchandise and groceries 3,515 Grand Rapids Public Schools Education 2,885 St. Mary’s Health Care Hospital services 2,635 City of Grand Rapids City government 2,601 Farmers Insurance Group Insurance 2,500 General Motors Corporation Auto stampings 2,500 U.S. Postal Service Postal delivery 2,450 D & W Food Centers Inc. Grocery stores 2,200 Lacks Enterprises Auto trim parts 2,175 Metro Health Hospital Hospital and medical services 2,122 Grand Valley State University Higher education 2,098 Kent County County government 2,052 Fifth Third Bank Banking services 1,993 Mercy Central Health Partners Hospital and medical care 1,955 Wolverine World Wide Inc. Footwear 1,925 Haworth Inc. Office systems 1,900 Grand Rapids Community College Higher education 1,800

1 In late January 2007, Pfizer Corporation announced plans to close its drug safety and metabolism research facility in downtown Kalamazoo by the end of 2008. This facility currently has about 250 employees.

B-14

Retail Sales1 A breakdown of the 2008 estimated retail sales as reported in the 2008 Editor & Publishers Market Guide is as follows. The number of stores is based on the 2002 U.S. Census. Allegan County Kalamazoo County State of Michigan No. of Total Retail No. of Total Retail No. of Total Retail Stores Sales (000) Stores Sales (000) Stores Sales (000) Motor Vehicles/Parts 67 $ 361,184 101 $1,021,734 4,208 $ 45,500,400Furniture 15 12,587 57 159,386 2,062 4,952,900Electrical/Appliance 6 3,701 39 140,839 1,568 3,637,537Building Material 50 153,494 89 410,203 3,367 14,944,178Food/Beverage 50 231,668 122 394,925 6,167 18,832,163Health/Personal Care 23 73,856 67 217,620 2,836 9,654,800Gasoline 44 167,187 90 368,857 4,112 16,321,876Clothing/Accessories 25 13,666 127 183,873 4,910 6,736,326General Merchandise 10 82,666 33 1,153,545 1,373 26,369,220Other Retailers 74 64,302 251 367,037 8,893 5,537,657 2008 E&P Estimate $1,164,311 $4,418,019 $152,487,057 2002 U.S. Census 364 $1,023,314 976 $3,755,390 39,496 $128,392,982 Unemployment2

The following table shows the historical annual average unemployment rates (not seasonally adjusted) for Allegan County, Kalamazoo County and the State of Michigan.

Allegan County Kalamazoo County State of Michigan 2008 (June) 7.5% 6.7% 8.7% 2007 6.3 5.2 7.2 2006 6.1 5.2 6.9 2005 6.2 5.2 6.9 2004 6.6 5.7 7.1

Higher Education Area residents wishing to further their education have many colleges and universities to choose from within a short commuting distance. Nearby colleges include Western Michigan University, Kalamazoo College, Kalamazoo Valley Community College and Davenport University in Kalamazoo and Hope College in Holland. Grand Rapids has many facilities including Grand Rapids Community College, Aquinas College, Calvin College, Calvin Theological Seminary, Cornerstone University, Davenport University, Grace Bible College, ITT Technical Institute, Reformed Bible College and Kendall College of Art & Design of Ferris State University, as well as Grand Valley State University in Allendale and Grand Rapids.

1 Source: 2008 Editor & Publisher (E&P) Market Guide. 2 Source: State of Michigan Office of Labor Market Information.

B-15

Health Facilities1

Residents of the School District have access to Borgess-Pipp Hospital, a high-tech health center located in the School District that offers an array of outpatient services, including emergency care, outpatient surgery, physical and occupational therapy and diagnostic services and has 43 beds. Allegan General Hospital in Allegan, Michigan, with 34 beds, is located nearby.

Major health care facilities in Kalamazoo are: Borgess Medical Center 353 beds Bronson Healthcare System with 343 beds Major health care facilities in Grand Rapids are:

Forest View Hospital with 62 beds Mary Free Bed Rehabilitation Hospital with 80 beds Pine Rest Christian Mental Health Center with 56 beds Saint Mary’s Health Care with 336 beds Spectrum Health Butterworth Hospital with 986 beds Spectrum Health Special Care Hospital with 383 beds

Transportation The School District residents have access to excellent highway transportation via US 131 that connects with I-94 and I-96, the area’s main east-west highways. Bus service is provided by Greyhound and Shortway. Commercial and air freight services are available at Kalamazoo-Battle Creek International Airport in Kalamazoo and Gerald R. Ford International Airport in Grand Rapids. Utilities School District residents are supplied with electricity and natural gas by Consumers Energy Company. Natural gas is also furnished by Michigan Gas Utilities. AT&T provides telephone services. Residents of the City of Plainwell are supplied with municipal water and sewer. Residents in rural areas are serviced by individual wells and septic tanks. Banking2 The following banks have branches in the School District or in the surrounding area: Name of Bank Main Office Location Statewide DepositsBank of America Troy, MI $23,851,647,000Charter One Bank, National Association Cleveland, OH N/AChemical Bank Midland, MI 2,936,093,000Comerica Bank Detroit, MI 43,792,165,000Fifth Third Bank Grand Rapids, MI 37,990,237,000Flagstar Bank Troy, MI 7,337,975,000Huntington National Bank Columbus, OH N/AIrwin Union Bank and Trust Company Columbus, IN N/AJP Morgan Chase Bank, National Association Columbus, OH N/AKeystone Community Bank Kalamazoo, MI 147,875,000National City Bank Cleveland, OH N/A 1 Source: American Hospital Directory. 2 Source: Michigan Bankers Association 2008 Registry of Michigan Financial Institutions.

APPENDIX C

PLAINWELL COMMUNITY SCHOOLS

General Fund Budget Summary Fiscal Years Ending June 30, 2008 and 2009

Adopted Unaudited 06-16-08 2007/08 2008/09REVENUES Local Sources $ 2,985,934 $ 2,932,700State Sources 19,323,211 19,095,450Federal Sources 421,885 407,421Transfers and Other Transactions 490,958 497,243 TOTAL REVENUES $23,221,988 $22,932,814 EXPENDITURES Instruction Basic Programs $11,859,155 $11,944,406 Added Needs 2,198,959 2,264,130 Adult and Continuing Education 30,722 40,468Support Services Pupil Services 1,264,270 1,260,454 Instruction Staff 558,872 604,334 General Administration 427,646 456,816 School Administration 1,173,123 1,208,950 Business Administration 534,948 430,123 Operations and Transportation 3,511,606 3,649,995 Central Support 495,799 549,586Community Services 628,304 687,879Outgoing Transfers and Other Transactions 353,736 344,119 TOTAL EXPENDITURES $23,037,140 $23,441,260 Excess of Revenues Over (Under) Expenditures $ 184,848 $ (508,446) Fund Balance - July 1 $3,044,920 $3,229,768 Estimated Fund Balance - June 30 $3,229,767 $2,721,322

C-1

i

PLAINWELL COMMUNITY SCHOOLS

REPORT ON FINANCIAL STATEMENTS (with required supplementary and additional information)

YEAR ENDED JUNE 30, 2007

iv

INDEPENDENT AUDITORS' REPORT

To the Board of Education October 19, 2007 Plainwell Community Schools Plainwell, Michigan

We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Plainwell Community Schools, as of and for the year ended June 30, 2007, which collectively comprise the District’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of Plainwell Community Schools’ 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 Standardsissued 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 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 Plainwell Community Schools as of June 30, 2007 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.

The School District has not requested or obtained the written consent of its auditor, Maner, Costerisan and Ellis, P.C., for the inclusion of the portions of the annual financial report contained in this Official Statement. Therefore, the auditor has not conducted a post-audit review of such information.

AP

PE

ND

IX D

D-1

To the Board of Education Plainwell Community Schools Plainwell, Michigan October 19, 2007

v

In accordance with Government Auditing Standards, we have also issued our report October 19, 2007, on our consideration of Plainwell Community Schools’ 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 and budgetary comparison information on pages vi through xii and page 28 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.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Plainwell Community Schools’ basic financial statements. The additional information on pages 30 to 46 is presented for purposes of additional analysis and is not a required part of the basic financial statements. This additional information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.

Certified Public Accountants

vi

MANAGEMENT’S DISCUSSION AND ANALYSIS

This section of Plainwell Community School’s annual financial report presents our discussion and analysis of the District’s financial performance during the fiscal year that ended on June 30, 2007. Please read it in conjunction with the District’s financial statements, which immediately follow this section.

FINANCIAL HIGHLIGHTS

The District’s general fund financial situation continues to improve. Over the past several years the District has strived to reach the Board of Education goal of maintaining at least a 10% fund balance. At the close of the fiscal year ended June 30, 2007, the District’s general fund, fund balance has reached 13.4% of expenditures and outgoing transfers or $3 million dollars.

Total general fund revenues were $23 million dollars, which was greater than the general fund expenditures and transfers of $22.8 million dollars by $204,098. Revenues for the 2006-2007 school year increased by .5% over the previous year while expenditures increased .4% over the previous year.

Enrollment decreased slightly during the 2006-2007 school year bringing the blended enrollment of the District to 2,904 students. Student enrollment is projected to stay the same over the next several years.

OVERVIEW OF THE FINANCIAL STATEMENTS

This annual report consists of three parts - management’s discussion and analysis (this section), the basic financial statements and required supplementary information. The basic financial statements include two kinds of statements that present different views of the District:

� The first two statements are district-wide financial statements that provide both short-term and long-term information about the District’s overall financial status.

� The remaining statements are fund financial statements that focus on individual parts of the District, reporting the District’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.

� Fiduciary funds statements provide information about the financial relationships in which the District acts solely as a trustee or agent for the benefit of others.

Management’s Discussion and

Analysis

Basic Financial Statements

Required Supplementary

Information

Summary Detail

Figure A-1 Organization of Plainwell Community

School’s Annual Financial Report

District-wide Financial

Statements

Fund Financial

Statements

Notes to Financial

Statements

D-2

vii

The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements with a comparison of the District’s budget for the year. Figure A-1 shows how the various parts of this annual report are arranged and related to one another.

District-wideStatements Governmental Funds Fiduciary Funds

Scope Entire district The activities of the district that Instances in which the District (except fiduciary funds) are not proprietary or fiduciary, administers resources on behalf

such as special education of someone else, such as and building maintenance. scholarship programs and

student activities monies

Required financial * Statement of net assets * Balance sheet * Statement of fiduciary net assetsstatements * Statement of activities * Statement of revenues, * Statement of changes in

expenditures and changes fiduciary net assetsin fund balances

Accounting basis and Accrual accounting and Modified accrual accounting Accrual accounting and measurement focus economic resources focus and current financial resources economic resources focus

focus

Type of asset/liability All assets and liabilities, Generally assets expected to All assets and liabilities, both information both financial and capital, be used up and liabilities short-term and long-term, PCS's

short-term and long-term that come due during the year funds do not currently containor soon thereafter; no capital capital assets, although they canassets or long-term liabilitiesincluded

Type of inflow/outflow All revenues and expenses Revenues for which cash is All additions and deductionsinformation during year, regardless received during or soon after during the year, regardless of

of when cash is received the end of the year, when cash is received or paidor paid expenditures when goods or

services have been receivedand the related liability isdue and payable

Fund Financial Statements

Figure A-2Major Features of District-Wide and Fund Financial Statements

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

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.

viii

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

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

� To assess the overall health of the District, you need to consider additional nonfinancial factors such as changes in the District’s property tax base and the condition of school buildings and other facilities.

In the district-wide financial statements, the District’s activities:

� 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.

FUND FINANCIAL STATEMENTS

The fund financial statements provide more detailed information about the District’s funds, focusing on its most significant or “major” 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 (like repaying its long-term debts) or to show that it is properly using certain revenues (like school lunch and athletics).

The District has two kinds of funds:

� 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 that 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 you 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, we provide additional information with the governmental funds statements that explains the relationship (or differences) between them.

� Fiduciary funds - The District is the trustee, or fiduciary, for assets that belong to others, such as the scholarship fund and the student activities funds. The District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. 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 DISTRICT AS A WHOLE

Net assets - The District’s combined net assets were slightly higher on June 30, 2007 than they were the year before increasing approximately 5% or $12.9 million. The District spent a significant portion of the construction funds on the ongoing construction projects and retired assets that have been replaced as part of the 2002 bond project. The District also continues to participate in the school bond loan fund (SBLF) borrowing to meet principal and interest payments on its outstanding debt.

D-3

ix

2007 2006

Current and other assets 9,612,130$ 9,236,482$Capital assets and other 45,778,554 46,610,061

Total assets 55,390,684 55,846,543

Long-term liabilities 35,170,460 36,205,727Other liabilities 7,237,214 7,362,552

Total liabilities 42,407,674 43,568,279

Net assets:Invested in capital assets, net of related debt 10,342,851 9,970,116Unrestricted 2,640,159 2,308,148

Total net assets 12,983,010$ 12,278,264$

Table A-3Plainwell Community Schools' Net Assets

2007 2006Revenues:

Program revenues:Charges for services 1,097,816$ 1,111,949$Federal and state categorical grants 1,009,168 953,524

General revenues:Property taxes 5,313,722 4,972,804State aid - unrestricted 18,839,646 18,225,727Other 1,015,099 912,838

Total revenues 27,275,451 26,176,842

Expenses:Instruction 14,213,057 13,592,946Support services 7,612,911 7,452,561Community services 526,383 510,062Food services 759,423 749,322Athletics 625,319 506,926Interest on long-term debt 1,563,962 1,861,672Unallocated depreciation 1,269,650 607,769

Total expenses 26,570,705 25,281,258

Change in net assets 704,746$ 895,584$

Table A-4Changes in Plainwell Community Schools' Net Assets

x

District Governmental Activities

The recent good health of the District’s finances can be credited to a number of areas.

Proposal A that established the student foundation grant concept, has increased the District’s main funding source from $4,794 per student in 1995 to $7,085 per student in 2007. The State of Michigan increased funding to the District of $210 per student.

Student overall growth in the District has been ongoing. The student count in September 1995 was 2,643 and has grown by 10% to 2,904 in September of 2006.

The District has continued to go through budget reductions each of the past few years. Expenditures were reduced by approximately $250,000 - $500,000 in years 2002 through 2007. The District has strived to restructure programs and services to balance state revenues with expenditures. With the State’s uncertain revenue structure the District has reduced expenditures to maintain sufficient fund to survive a State proration.

Many upgrades to our facilities in the area of infrastructure, as a result of the projects completed with the 1998 bond issue, has allowed a shift in our philosophy in the area of facilities maintenance. The District has moved to contracting with outside companies for regular preventative maintenance tasks. The upgrade of our entire heating, cooling, electrical and technology infrastructure has allowed this change. The 2002 bond projects have included added classroom space to the Middle School and each of our elementary schools. The District continues to plan for the maintenance and upkeep of this additional classroom space as part of our annual budget and planning process.

The District’s alternative and adult education program has been revamped with updated curriculum. This has allowed for growth in the alternative education program that has had a positive impact on the District financially by increasing our student foundation revenue.

FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS

The financial performance of the District as a whole continues to be strong as is reflected in its governmental funds. As the District completed the year, its governmental funds reported combined fund balances of $4.8 million, above last year’s ending fund balances of $4.5 million. The major portion of this increase was because of a healthier fund balance and the need for operational borrowing was decreased. Excluding the capital projects fund, the fund balance for the combined governmental funds (general fund, debt service fund and special revenue funds) of the District increased by $584,441 or (18%) for 2007.

General Fund Budgetary Highlights

During the 2007 fiscal year the District budget was amended twice to reflect changes which affected the District. The initial amendment took place in November 2006, taking into account student enrollment and staffing levels. Uncertain State revenues let to reductions in spending.

The final amendment reflected minor updates in actual funding received and expected year-end expenditures. This amendment showed a budget that used a portion of the fund balance to maintain instructional and support programs. The actual year end balances showed a variance in budgeted revenues of .002 and a variance in budgeted expenditures of 1.5% overall. While working within the restraints of state funding, the District still maintained a fund balance above the Board's set goal of 10% and maintained all critical instructional and support services.

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xi

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

By the end of 2007, the District had invested $45.28 million net in a broad range of capital assets, including school buildings, athletic facilities, school furnishings and equipment, vehicles, and technology. This amount represents a net decrease of $0.9 million, or 2 percent, from last year. (More detailed information about capital assets can be found in Note 5 to the financial statements.) Total depreciation expense for the year exceeded $1.7 million.

2006Accumulated Net book Net of

Cost depreciation value depreciation

Land 476,352$ $ 476,352$ 285,494$ Construction in progress 23,408,056 Buildings 52,871,460 11,323,409 41,548,051 21,116,748 Equipment and furniture 8,105,768 4,844,196 3,261,572 1,406,636

Net capital assets 61,453,580$ 16,167,605$ 45,285,975$ 46,216,934$

2007

Table A-5Plainwell Community Schools' Capital Assets

The District’s fiscal year 2007 capital budget anticipates spending another $1 million for capital projects, principally to continue the construction in progress related to the 2002 bond project.

Long-term Debt

At year-end the District had $37.4 million in general obligation bonds and other long-term debt outstanding - a decrease of 9.7 percent from last year. (More detailed information about the District’s long-term liabilities is presented in Note 7 to the financial statements.)

xii

The District issued $25.5 million in general obligation bonds in November of 2002 for additions and remodeling to all of our facilities. The District repaid $2.0 million in general obligation bonds. In May of 2003 the District entered into the School Bond Loan Fund (SBLF) borrowing $1,400,000 to fully meet principal and interest payments. The current SBLF and School Bond Revolving Fund (SBRF) balance is $3.8 million. By using the SBLF and the SBRF the District is able to keep the millage rate for debt service at 7.000 mills until the taxable value of the District grows to the point where sufficient funds are generated to meet all obligations and the SBLF is fully repaid.

2007 2006General obligation debts

(financed with property taxes) 36.8$ 37.9$Other 0.6 0.5

Total 37.4 38.4Less due in one year 2.2 2.2

35.2$ 36.2$

Table A-6Plainwell Community Schools'Outstanding Long-Term Debt

(in millions of dollars)

FACTORS BEARING ON THE DISTRICT’S FUTURE

At the time these financial statements were prepared and audited, the District was aware of three existing circumstances that could significantly affect its financial health in the future:

� The 2007-2008 foundation allowance has not been finalized by the State of Michigan. The foundation allowance represents 84 percent of total District revenue. The weak state economy could create a pro-ration in state aid.

� Student counts are always uncertain. The District has experienced a slight gain in students for 2007-2008.

� The District is plaintiff with other school districts in a lawsuit against the State, seeking to rectify inequities in the formula the State uses to apportion special education aid to the districts.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, taxpayers, customers and 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 information, contact the Director of Finance, Plainwell Community School District, 600 School Drive, Plainwell MI 49080.

D-5

Governmentalactivities

ASSETSCURRENT ASSETS:

Cash 3,291,573$ Investments 1,459,890 Investments - restricted for capital projects 1,181,800 Receivables:

Accounts receivable 102 Accrued interest 19,368 Other governmental units 3,559,364 Taxes receivable 50,092 Due from student funds 7,707

Inventories 234 Prepaid expenditures 42,000

TOTAL CURRENT ASSETS 9,612,130

NONCURRENT ASSETS:Issuance cost for bonds - net of amortization 492,579 Land 476,352 Other capital assets, net of accumulated depreciation 44,809,623

TOTAL NONCURRENT ASSETS 45,778,554

TOTAL ASSETS 55,390,684$

LIABILITIES AND NET ASSETSCURRENT LIABILITIES:

Accounts payable 379,968$ Accrued expenses 742,994Accrued interest payable 325,293Deferred revenue 13,608Salaries payable 2,072,603 Note payable 1,500,000 Current portion of long-term obligations 2,000,000 Current portion of compensated absences/severance pay 202,748

TOTAL CURRENT LIABILITIES 7,237,214

NONCURRENT LIABILITIES:Noncurrent portion of long-term obligations 34,820,672 Noncurrent portion of compensated absences/severance pay 349,788

TOTAL NONCURRENT LIABILITIES 35,170,460

TOTAL LIABILITIES 42,407,674

NET ASSETS:Invested in capital assets net of related debt 10,342,851 Unrestricted 2,640,159

TOTAL NET ASSETS 12,983,010

TOTAL LIABILITIES AND NET ASSETS 55,390,684$

PLAINWELL COMMUNITY SCHOOLSSTATEMENT OF NET ASSETS

JUNE 30, 2007

See notes to financial statements. 1

Governmentalactivities

Net (expense)revenue and

Charges for Operating changes inFunctions/programs Expenses services grants net assets

Governmental activities:Instruction 14,213,057$ $ 481,946$ (13,731,111)$ Support services 7,612,911 184,075 (7,428,836) Community services 526,383 434,682 (91,701) Food services 759,423 523,203 343,147 106,927 Athletics 625,319 139,931 (485,388) Interest 1,563,962 (1,563,962) Unallocated depreciation 1,269,650 (1,269,650)

Total governmental activities 26,570,705$ 1,097,816$ 1,009,168$ (24,463,721)

General revenues:Property taxes, levied for general purposes 2,256,887 Property taxes, levied for debt service 3,056,835 Investment earnings 348,077 State sources 18,839,646 Allegan ISD allocation 395,574 Other 289,672 Loss on sale of assets (18,224)

Total general revenues 25,168,467

CHANGE IN NET ASSETS 704,746

NET ASSETS, beginning of year 12,278,264

NET ASSETS, end of year 12,983,010$

PLAINWELL COMMUNITY SCHOOLSSTATEMENT OF ACTIVITIESYEAR ENDED JUNE 30, 2007

Program revenues


D-6

General fund2002 Capital projects fund

Other nonmajor governmental

funds

Total governmental

funds

ASSETS:Cash 2,346,209$ $ 945,364$ 3,291,573$ Investments 1,459,890 1,181,800 2,641,690 Receivables:

Accounts receivable 102 102 Accrued interest 19,368 19,368 Other governmental units 3,559,364 3,559,364 Taxes receivable 5,036 45,056 50,092 Due from student groups 7,707 7,707 Due from other funds 169,346 38 169,384

Inventories 234 234 Prepaid expenditures 12,000 30,000 42,000

TOTAL ASSETS 7,579,022$ 1,181,800$ 1,020,692$ 9,781,514$

LIABILITIES:Accounts payable 189,067$ 154,446$ 36,455$ 379,968$ Accrued expenses 705,999 36,995 742,994 Accrued interest payable 47,751 47,751 Due to other funds 38 169,346 169,384 Salaries payable 2,072,603 2,072,603 Deferred revenue 18,644 18,644 Note payable 1,500,000 1,500,000

TOTAL LIABILITIES 4,534,102 154,446 242,796 4,931,344


Other nonmajor governmental

funds

Total governmental

funds

FUND BALANCES:Reserved for debt service $ $ 489,436$ 489,436$ Reserved for inventories 234 234 Reserved for prepaid expenditures 12,000 30,000 42,000 Designated for subsequent year's expenditures 208,739 1,027,354 1,236,093 Unreserved, undesignated 2,824,181 258,226 3,082,407

TOTAL FUND BALANCES 3,044,920 1,027,354 777,896 4,850,170

7,579,022$ 1,181,800$ 1,020,692$ 9,781,514$

Total governmental fund balances 4,850,170$

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

Capital assets used in governmental activities are notfinancial resources and are not reported in the funds

The cost of capital assets is 61,453,580$ Accumulated depreciation is (16,167,605)

45,285,975Long-term liabilities are not due and payable in the currentperiod and are not reported in the funds

Bonds and loans (36,820,672)Issuance cost for bonds 492,579Compensated absences/severance pay (552,536)Long-term accrued interest is not included as a liability in government funds, it is recorded when paid (277,542)

5,036

Net assets of governmental activities 12,983,010$

ASSETS

LIABILITIES AND FUND BALANCES

PLAINWELL COMMUNITY SCHOOLSBALANCE SHEET

GOVERNMENTAL FUNDSJUNE 30, 2007

TOTAL LIABILITIES AND FUND BALANCES

Balance of taxes receivable June 30, 2007 less allowance for doubtful accounts, expected to be collected after September 1, 2007



Other nonmajor

governmental funds

Total governmental

fundsREVENUES:

Local sources:Property taxes 2,256,887$ $ 3,056,835$ 5,313,722$ Investment earnings 144,976 166,823 36,278 348,077Tuition 65,626 65,626Food sales and athletic admissions 656,333 656,333Other local revenue 556,401 109,128 665,529

Total local sources 3,023,890 166,823 3,858,574 7,049,287

State sources 19,072,300 51,930 19,124,230Federal sources 433,367 291,217 724,584Intermediate and other sources 364,480 364,480

Total revenues 22,894,037 166,823 4,201,721 27,262,581

EXPENDITURES:Instruction:

Basic programs 11,870,649 11,870,649Added needs 2,210,698 2,210,698Adult and continuing education 36,643 36,643

Total instruction 14,117,990 14,117,990

Supporting services:Pupil 1,102,774 1,102,774Instructional staff 715,172 715,172General administration 460,539 460,539School administration 1,208,898 1,208,898Business services 394,054 394,054Operation and maintenance 2,692,706 2,692,706Transportation services 786,404 786,404Other support services 442,077 442,077

Total supporting services 7,802,624 7,802,624


Other nonmajor

governmental funds

Total governmental

funds

EXPENDITURES (Concluded):Community services 526,383$ $ $ 526,383$ Special revenue:

Food service 796,008 796,008Athletics 487,027 487,027

Debt service:Principal retirement 2,000,000 2,000,000Interest and fiscal charges 1,386,528 1,386,528Bond issuance costs 123,881 123,881Other 771 771

Capital outlay:Construction 361,358 361,358

Total expenditures 22,446,997 361,358 4,794,215 27,602,570

EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 447,040 (194,535) (592,494) (339,989)

OTHER FINANCING SOURCES (USES): Proceeds from sale of bonds 7,900,000 7,900,000

Proceeds from school bond loan fund 568,593 568,593Discount on bonds issued (33,090) (33,090)Payment to refunded bond escrow agent (7,743,030) (7,743,030)Proceeds from sale of fixed assets 6,328 6,328AAESA software purchase 31,094 31,094Operating transfers in from other funds 62,636 343,000 405,636Operating transfers to other funds (343,000) (62,636) (405,636)

Total other financing sources (uses) (242,942) 972,837 729,895

NET CHANGE IN FUND BALANCES 204,098 (194,535) 380,343 389,906

FUND BALANCES:Beginning of year 2,840,822 1,221,889 397,553 4,460,264

End of year 3,044,920$ 1,027,354$ 777,896$ 4,850,170$

PLAINWELL COMMUNITY SCHOOLSSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDSYEAR ENDED JUNE 30, 2007


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Net change in fund balances total governmental funds 389,906$

Amounts reported for governmental activities in the statement of activities are differentbecause: Governmental funds report capital outlays as expenditures in the statement of activities. These costs are allocated over their estimated useful lives as depreciation. Depreciation expense (1,739,681) Capital outlay 833,274

In the statement of activities, only the gain on the sale of assets is reported, whereas in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balance by the undepreciated cost of the assets sold. (24,552)

Accrued interest on bonds is recorded in the statement of activitieswhen incurred; it is not recorded in governmental funds until it is paid: Accrued interest payable beginning of the year 391,673 Accrued interest payable end of the year (277,542)

Repayments of principal on long-term debt and issuance costs are expenditures in the governmental funds, but not in the statement of activities (where it is a reduction of liabilities). Repayment of principal on long-term debt 9,255,000 Proceeds from sale of bonds (7,900,000) Proceeds from school bond loan fund (568,593) Loss on bond refunding 488,030 Bond issuance costs 123,881 Discount on bonds issued 33,090 Amortization of bond discounts (394) Amortization of bond premiums 70,959 Amortization of loss on bond refunding (168,379) Long-term interest expense on school loan and revolving funds (168,551) Amortization of bond issuance cost (24,429)

Revenue is recorded on the accrual method in the statement of activities; in the governmental funds it is recorded on the modified accrual method and not considered available. Accrued revenue beginning of the year (5,036) Accrued revenue end of the year 5,036

Compensated absences are reported on the accrual method in the statement of activities,and recorded as an expenditure when financial resources are used in the governmental funds. Accrued compensated absences beginning of the year 543,590 Accrued compensated absences end of the year (552,536)

Change in net assets of governmental activities 704,746$


PLAINWELL COMMUNITY SCHOOLSRECONCILIATION OF THE STATEMENT OF REVENUES,

EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDSTO THE STATEMENT OF ACTIVITIES


Agencyfunds

Cash 235,329$

Liabilities: Due to Plainwell Community Schools 7,707$ Due to student groups 227,622

235,329$

LIABILITIES

PLAINWELL COMMUNITY SCHOOLSSTATEMENT OF FIDUCIARY ASSETS AND LIABILITIES

JUNE 30, 2007

ASSETS


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PLAINWELL COMMUNITY SCHOOLS NOTES TO FINANCIAL STATEMENTS

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The basic financial statements of the Plainwell Community Schools have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the District's accounting policies are described below.

A. Reporting Entity

The Plainwell Community Schools (the “District”) is governed by the Plainwell Community Schools Board of Education (the “Board”), which has responsibility and control over all activities related to public school education within the District. The District receives funding from local, state, and federal government sources and must comply with all of the requirements of these funding source entities. However, the District is not included in any other governmental reporting entity as defined by the accounting principles generally accepted in the United States of America. Board members are elected by the public and have decision-making authority, the power to designate management, the ability to significantly influence operations, and the primary accountability for fiscal matters. In addition, the District’s reporting entity does not contain any component units as defined in Governmental Accounting Standards Board Statements No. 14 and No. 39.

B. Government-wide and fund 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. For the most part, the effect of interfund activity has been removed from these statements. The government-wide financial statements categorize primary activities as either governmental or business type. All of the District’s activities are classified as governmental activities.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges paid by recipients who purchase, use or directly benefit from goods or services by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. State Foundation Aid, certain revenue from the intermediate school district and other unrestricted items are not included as program revenues but instead as general revenues.

In the government-wide statement of net assets, the governmental activities column (a) is presented on a consolidated basis, (b) and is reported on a full accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long-term debt and obligations. The District’s net assets are reported in three parts - invested in capital assets, net of related debt; restricted net assets; and unrestricted net assets.

The District first utilizes restricted resources to finance qualifying activities.


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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

B. Government-wide and fund financial statements (Continued)

The government-wide statement of activities reports both the gross and net cost of each of the District’s functions. The functions are also supported by general government revenues (property taxes, certain intergovernmental revenues, fines, permits and charges, etc.) The statement of activities reduces gross expenses by related program revenues and operating grants. Program revenues must be directly associated with the function. Operating grants include operating-specific and discretionary (either operating or capital) grants.

The net costs (by function) are normally covered by general revenue (property taxes, state sources, intermediate district sources, interest income and other revenues.)

The District does not allocate indirect costs.

This government-wide focus is more on the sustainability of the District as an entity and the change in the District’s net assets resulting from the current year’s activities.

Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

Governmental Funds - Governmental funds are those funds through which most school district functions typically are financed. The acquisition, use and balances of the District’s expendable financial resources and the related current liabilities are accounted for through governmental funds.

The District reports the following major governmental funds:

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

The 2002 capital projects fund accounts for the receipt of debt proceeds and the acquisition of fixed assets or construction of major capital projects.

The capital projects funds include capital project activities funded with bonds issued after May 1, 1994. For these capital projects, the District has complied with the applicable provisions of §1351a of the Revised School Code.

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9


B. Government-wide and fund financial statements (Continued)

Beginning with the year of bond issuance, the District has reported the annual construction activity in the 2002 capital projects fund. The project for which the 2002 bonds were issued was considered complete on June 30, 2007 and the cumulative expenditures recognized for the construction period were as follows:

2002 fund

Revenue 27,316,727$

Expenditures and transfers 26,289,373$

Other Non-major Funds

The special revenue funds account for revenue sources that are legally restricted to expenditures for specific purposes (not including expendable trusts or major capital projects). The District accounts for its food service and athletic activities in the special revenue funds.

The debt service funds account for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds.

The 2007 capital projects fund accounts for the receipt of communication lease proceeds and the acquisition of fixed assets or construction of major capital projects.

Fiduciary funds account for assets held by the District in a trustee capacity or as an agent on behalf of others. Trust funds account for assets held by the District under the terms of a formal trust agreement. Fiduciary funds are not included in the government-wide statements.

The private purpose trust fund is accounted for using the accrual method of accounting. Private purpose trust funds account for assets where both the principal and interest may be spent. These funds are not reported on the District financial statements. The District has no private purpose trust funds.

The agency fund is custodial in nature and does not present results of operations or have a measurement focus. Agency funds are accounted for using the accrual basis of accounting. This fund is used to account for assets that the District holds for others in an agency capacity (primarily student activities).


10


B. Government-wide and fund financial statements (Concluded)

Accrual Method

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in the government-wide financial statements to the extent that those standards do not conflict with or contradict guidance of the Government Accounting Standards Board.

C. Measurement Focus, Basis of Accounting and Basis of Presentation

Modified Accrual Method

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, state and federal aid and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the District.

State Revenue

The State of Michigan utilizes a foundation grant approach that provides for a specific annual amount of revenue per pupil based on a statewide formula. The Foundation is funded from state and local sources. Revenues from state sources are primarily governed by the School Aid Act and the School Code of Michigan. The Michigan Department of Education administers the allocation of state funds to school districts based on information supplied by the districts. For the year ended June 30, 2007, the foundation allowance was based on pupil membership counts taken in February and September of 2006.

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11


C. Measurement Focus, Basis of Accounting and Basis of Presentation (Concluded)

State Revenue (Concluded)

The state portion of the foundation is provided primarily by a state education property tax mileage of 6 mills and an allocated portion of state sales and other taxes. The local portion of the foundation is funded primarily by non-homestead property taxes, which may be levied at a rate of up to 18 mills. The State revenue is recognized during the foundation period and is funded through payments from October 2006 to August 2007. Thus, the unpaid portion at June 30th is reported as due from other governmental units.

The District also receives revenue from the state to administer certain categorical education programs. State rules require that revenue earmarked for these programs be used for its specific purpose. Certain governmental funds require an accounting to the state of the expenditures incurred. For categorical funds meeting this requirement, funds received, which are not expended by the close of the fiscal year are recorded as deferred revenue. Other categorical funding is recognized when the appropriation is received.

For the year ended June 30, 2007, approximately $367,000 of non cash transactions from the Michigan Department of Education (MDE) has been recorded as state aid revenue and pension expenditures as a result of a change in funding by the MDE.

D. Other Accounting Policies

1. Cash and equivalents include amounts in demand deposits and certificates of deposit.

The District reports its investments in accordance with GASB Statement No. 31, Accountingand Financial Reporting for Certain Investments and for External Investment Pools and No.40, Deposits and Investment Risk Disclosures. Under these standards, certain investments are valued at fair value as determined by quoted market prices, or by estimated fair values when quoted market prices are not available. The standards also provide that certain investments are valued at cost (or amortized cost) when they are of a short-term duration, the rate of return is fixed, and the district intends to hold the investment until maturity. Accordingly, investments in banker acceptances and commercial paper are recorded at amortized cost.


12


D. Other Accounting Policies (Continued)

1. Cash and equivalents include amounts in demand deposits and certificates of deposit. (Concluded)

State statutes authorize the District to invest in bonds and other direct and certain indirect obligations of the U.S. Treasury; certificates of deposit, savings accounts, deposit accounts, or depository receipts of a bank, savings and loan association, or credit union, which is a member of the Federal Deposit Insurance Corporation, Federal Savings and Loan Insurance Corporation, or National Credit Union Administration, respectively; in commercial paper rated at the time of purchase within the three highest classifications established by not less than two standard rating services and which matures not more than 270 days after the date of purchase. The District is also authorized to invest in U.S. Government or federal agency obligation repurchase agreements, bankers' acceptances of U.S. banks, and mutual funds composed of investments as outlined above.

2. Property taxes

Property taxes levied by the District are collected by various municipalities and periodically remitted to the District. The taxes are levied and become a lien as of July 1 and December 1 and are due upon receipt of the billing by the taxpayer and become a lien on the first day of the levy year. The actual due dates are September 14 and February 14, after which time the bills become delinquent and penalties and interest may be assessed by the collecting entity.

For the year ended June 30, 2007, the District levied the following amounts per $1,000 of assessed valuation:

Fund Mills

General Fund - Non-homestead 17.9442Debt service fund - Homestead and non-homestead 7.0000

3. Inventories and prepaid expenditures

Inventories are valued at the lower of cost (first-in, first-out) or market. Inventories in the special revenue funds consisting of expendable supplies held for consumption, are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid expenditures.

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13


D. Other Accounting Policies (Continued)

4. Receivables and payables

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.”

All receivables, including property taxes receivable, are shown net of an allowance for uncollectibles.

5. Capital assets

Capital assets purchased or acquired are capitalized at historical cost or estimated historical cost. Significant assets have been estimated based on a professional appraisal. Donated fixed assets are valued at their estimated fair market value on the date received.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related fixed assets.

Depreciation on all assets is provided on the straight-line basis over the estimated useful lives as follows:

Buildings and additions 40 - 50 years Furniture and other equipment 5 - 20 years

The District’s capitalization policy is to capitalize individual amounts exceeding $1,000.

6. Compensated absences

The District’s policies generally provide for granting vacation and sick leave with pay. The current and long-term liability for compensated absences is reported on the government-wide financial statements. A liability for these amounts, including related benefits, is reported in governmental funds only if they have matured, for example, as a result of employee leave, resignations or retirements.


14

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Concluded)

D. Other Accounting Policies (Concluded)

7. Long-term obligations

In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities on the statement of net assets. Bond premiums and discounts, as well as issuance costs and the difference between the reacquisition price and the net carrying amount of the old debt, are deferred and amortized over the life of the bonds using the straight line method over the term of the related debt.

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

8. Use of estimates

The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenditures. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.

9. Net asset reporting

In the computation of invested in capital assets, net of related debt, school bond loan fund and school bond revolving fund principal proceeds of $3,507,693 are considered capital-related debt. Accrued interest on the school bond loan fund and school bond revolving fund of $357,615 has been included in the calculation of restricted and unrestricted net assets.

NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY

Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for the general, special revenue and capital projects funds. Encumbrance accounting is employed in governmental funds. Significant encumbrances outstanding at year, if any, are reported as reservations of fund balance because they will be re-appropriated in the subsequent fiscal year.

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15

NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Concluded)

The District follows these procedures in establishing the budgetary data reflected in the financial statements:

1. The Superintendent submits to the School Board a proposed operating budget for the fiscal year commencing on July 1. The operating budget includes proposed expenditures and the means of financing them. The level of control for the budgets is at the functional level as set forth and presented as required supplementary information.

2. Public hearings are conducted to obtain taxpayer comments.

3. Prior to July 1, the budget is legally adopted by School Board resolution pursuant to the Uniform Budgeting and Accounting Act (1968 PA 2). The Act requires that the budget be amended prior to the end of the fiscal year when necessary to adjust appropriations if it appears that revenues and other financing sources will be less than anticipated or so that expenditures will not be in excess of original estimates. Expenditures shall not be made or incurred, unless authorized in the budget, in excess of the amount appropriated. Violations if any are noted in the required supplementary information section.

4. The Superintendent is authorized to transfer budgeted amounts between major expenditure functions within any fund; however, the School Board must approve these transfers and any revisions that alter the total expenditures of any fund.

5. Formal budgetary integration is employed as a management control device during the year for the general and special revenue funds.

6. The budget was amended during the year with supplemental appropriations, the last one approved prior to June 30, 2007. The District does not consider these amendments to be significant.


16

NOTE 3 - DEPOSITS AND INVESTMENTS

As of June 30, 2007, the District had the following investments.

Investment Type Fair value

Weightedaveragematurity (years)

Standard & Poor's Rating %

MILAF External Investment pool - MIMAX 1,182,360$ 0.0027 AAAm 44.80%MILAF External Investment pool - CMF 126,039 0.0027 AAAm 4.80%Guaranteed Investment Contract (GIC) 1,333,291 0.1397 A1+ 50.40%

Total fair value 2,641,690$ 100.00%

Portfolio weighted average maturity 0.0719

1 day maturity equals 0.0027, one year equals 1.00

The District voluntarily invests certain excess funds in external pooled investment funds which included money market funds. One of the pooled investment funds utilized by the District is the Michigan Investment Liquid Asset Fund (MILAF). MILAF is an external pooled investment fund of “qualified” investments for Michigan school districts. MILAF is not regulated nor is it registered with the SEC. MILAF reports as of June 30, 2007, the fair value of the District’s investments is the same as the value of the pool shares.

Interest rate risk. In accordance with its investment policy, the District will minimize interest rate risk, which is the risk that the market value of securities in the portfolio will fall due to changes in market interest rates, by; structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities in the open market; and, investing operating funds primarily in shorter-term securities, liquid asset funds, money market mutual funds, or similar investment pools and limiting the average maturity in accordance with the District’s cash requirements.

Credit risk. State law limits investments in commercial paper and corporate bonds to a prime or better rating issued by nationally recognized statistical rating organizations (NRSROs).

Concentration of credit risk. The District will minimize concentration of credit risk, which is the risk of loss attributed to the magnitude of the District’s investment in a single issuer, by diversifying the investment portfolio so that the impact of potential losses from any one type of security or issuer will be minimized.

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17

NOTE 3 - DEPOSITS AND INVESTMENTS (Continued)

Custodial credit risk - deposits. In the case of deposits, this is the risk that in the event of a bank failure, the District’s deposits may not be returned to it. As of June 30, 2007, $3,540,622 of the District’s bank balance of $3,841,647 was exposed to custodial credit risk because it was uninsured and collateralized with securities held by the pledging financial institution’s trust department or agent, but not in the District’s name. The carrying amount is $3,526,902.

Custodial credit risk - investments. For an investment, 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 the possession of an outside party.

The District will minimize custodial credit risk, which is the risk of loss due to the failure of the security issuer or backer, by; limiting investments to the types of securities allowed by law; and pre-qualifying the financial institutions, broker/dealers, intermediaries and advisors with which the District will do business.

The District’s Guaranteed Investment Contract is collateralized and invested for the purpose of paying off the note payable disclosed in Note 6.

The Investment Agreement, dated as of August 18, 2006, is by and among Wells Fargo Bank, N.A. as the Depository on behalf of both the participating Governmental Units and the Authority, and Citigroup Global Markets Inc., as Provider.

The net proceeds from the sale of the 2006 Series B-1 Notes were loaned by the Authority to the Governmental Units. Such Loans are or will be repaid with monthly set-a-side installments deposited with the Depository for investment under the Investment Agreement Set-a-side installments are deposited under the Investment Agreement versus Permitted Investments¹ (collateral securities) equaling at least 102% of the deposited amount and such Permitted Investments are held by the Depository in a fiduciary capacity.

The Guaranteed Rate under this Investment Agreement (commonly referred to as guaranteed investment contract-GIC or collateralized investment agreement-CIA) is 5.010% (simple interest actual days elapsed over a 365 day year).

The Guarantor is Citigroup Inc. as guarantor of the Provider’s obligations under this Investment Agreement. The Guarantor’s short term ratings as of the date of this Investment Agreement were P1, A1+, F1+, for Moody's, S&P, and Fitch, respectively, as of August 2006.

Foreign currency risk. The District is not authorized to invest in investments which have this type of risk.


18

NOTE 3 - DEPOSITS AND INVESTMENTS (Concluded)

The above amounts as previously reported in Note 3:

Deposits - including fiduciary funds of $235,329 3,526,902$Investments 2,641,690

6,168,592$

The above amounts are reported in the financial statements as follows:

Cash - agency fund 235,329$Cash 3,291,573Investments 1,459,890Investments - restricted for capital projects 1,181,800

6,168,592$

NOTE 4 - RECEIVABLES

Receivables at June 30, 2007 from other governmental units consist of the following:

Governmental units:State aid 3,230,253$Federal revenue 276,004Other 53,107

3,559,364$

Amounts due from governmental units include amounts due from federal, state and local sources for various projects and programs.

Because of the District's favorable collection experience, no allowance for doubtful accounts has been recorded.

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19

NOTE 5 - CAPITAL ASSETS

The following is a summary of the activity during the fiscal year:

Balance Reclassifications/ BalanceJune 30, 2006 Additions deletions June 30, 2007

Asseets not being depreciated:Land 285,494$ 190,858$ $ 476,352$ Construction in process 23,408,056 361,358 23,769,414

23,693,550 552,216 23,769,414 476,352

Other capital assets:Building and improvements 31,236,420 21,635,040 52,871,460 Technology 2,721,984 513,444 3,235,428 School furnishings and equipment 1,181,211 1,739,959 2,921,170 Vehicles and buses 1,281,464 144,910 215,000 1,211,374 Outside equipment and construction 720,677 17,119 737,796

Total other capital assets 37,141,756 24,050,472 215,000 60,977,228

Accumulated depreciation:Building and improvements 10,119,672 1,203,737 11,323,409 Technology 2,479,066 125,860 2,604,926 School furnishings and equipment 790,833 215,900 1,006,733 Vehicle and buses' 922,464 160,157 190,448 892,173 Outside equipment and construction 306,337 34,027 340,364

Total accumulated depreciation 14,618,372 1,739,681 190,448 16,167,605

Net other capital assets 22,523,384 22,310,791 24,552 44,809,623

Net capital assets 46,216,934$ 22,863,007$ 23,793,966$ 45,285,975$

Amounts included in capital assets include only items greater than $1,000.


20

NOTE 5 - CAPITAL ASSETS (Concluded)

Depreciation for the fiscal year ended June 30, 2007 amounted to $1,727,526. The District allocated depreciation expense to the various activities as follows:

Instruction 216,720$Support services 115,019Athletics 138,292Unallocated 1,257,495

1,727,526$

Unallocated depreciation represents the assets that serve multiple functions and thus it would be impractical to allocate the depreciation.

NOTE 6 - NOTE PAYABLE

At June 30, 2007 the District has outstanding a $1,500,000 revenue note (state aid note) dated August 18, 2006. The note, which has an interest rate of 3.68%, matures August 20, 2007. The District has $1,333,291 of funds on deposit with a financial institution, which are included in investments on the general fund balance sheet, to be applied against the $1,500,000 note. The note is secured by the full faith and credit of the District as well as pledged state aid. Subsequent to year-end the District set aside an additional amount to pay off the note principal and related interest expense.

Balance BalanceJune 30, 2006 Additions Payments June 30, 2007

1,700,000$ 1,500,000$ 1,700,000$ 1,500,000$

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21

NOTE 7 - LONG-TERM DEBT

The District issues general obligation bonds to provide funds for the acquisition, construction and improvement of major capital facilities. General obligation bonds are direct obligations and pledge the full faith and credit of the District. Long-term obligations currently outstanding are as follows:

1998 general obligation - bonds due in annual installments of $1,000,000 through May 1, 2009, with interest at 4.50% to 5.00% 2,000,000$

2002 general obligation - bonds due in annual installments of $745,000 to $1,000,000 through May 1, 2021, with interest at 3.50% to 5.50% 7,745,000

2005 refunding serial bonds due in annual installments of $1,000,000 to $2,030,000 through May 1, 2020, with interest at 3.50% to 5.00% 15,250,000

2007 refunding serial bonds due in annual installments of $350,000 to $1,100,000 through May 1, 2028, with interest at 4.00% 7,900,000

Total general obligation bonded debt 32,895,000

Less deferred amounts on bond refunding (1,060,587)Less unamortized discount (32,696)Plus:

Premium on bond refunding 1,001,707

32,803,424

1998 limited obligation bonds (Durant bonds) due in annual installments of $20,631 to $62,206 through May 1, 2013, with interest at 4.76%. Certain State Aid payments have been pledged as security. 151,940

32,955,364

Borrowings from the State of Michigan - school bond loan and revolving funds 3,865,308Compensated absences 552,536

Total general long-term debt 37,373,208$

The Durant bonds, including interest, were issued in anticipation of payment to the District as appropriated and to be appropriated by the State of Michigan under Section 11g(3) of Act 94 (State Aid payments). The District has pledged and assigned to the bondholder all rights to these State Aid payments as security for the Bond.


22

NOTE 7 - LONG-TERM DEBT (Continued)

On March 27, 2007, Plainwell Community Schools issued general obligation bonds of $7,900,000 with an interest rate at 4.00% to advance refund bonds with an interest rate at 5.00%. The bonds mature at various time through May 1, 2028. The general obligation bonds were issued at a discount after paying issuance costs of $123,881, which includes the underwriters discount of $43,450, the net proceeds were $7,743,030. The net proceeds from the issuance of the general obligation bonds were used to purchase U.S. government securities and those securities were deposited in an irrevocable trust with an escrow agent to provide debt service payments until the bonds are paid in full. The advance refunding met the requirements of an in-substance debt defeasance and the term bonds were removed from the District’s government-wide financial statements.

As a result of the advance refunding, the District reduced its total debt service requirements by $360,431, which resulted in an economic gain (difference between the present value of the debt service payment on the old and new debt) of $422,352.

The District has defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the District’s financial statements. At June 30, 2007, $22,380,000 of bonds outstanding are considered defeased. D

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NOTE 7 - LONG-TERM DEBT (Continued)

The annual requirements to amortize long-term obligations outstanding exclusive of compensating absences as of June 30, 2007, including interest of $13,606,525 are as follows:

Year ending June 30, Principal Interest Total

2008 2,000,000$ 1,474,024$ 3,474,024$2009 2,020,631 1,364,582 3,385,2132010 2,056,613 1,278,599 3,335,2122011 2,052,642 1,196,171 3,248,8132012 2,097,206 1,132,616 3,229,822

2012-2016 10,164,848 4,196,433 14,361,2812017-2021 6,205,000 2,065,500 8,270,5002022-2026 5,390,000 856,200 6,246,2002027-2028 1,060,000 42,400 1,102,400

33,046,940 13,606,525$ 46,653,465$

School bond loan and revolving funds 3,865,308Compensated absences/severance pay 552,536Deferred loss on bond refunding (1,060,587)Discounts on refunding (32,696)Premiums on refunding 1,001,707

37,373,208$

At June 30, 2007, net assets of $489,436 are available in the debt service funds to service the general obligation debt.

Borrowing from the State of Michigan - The school bond loans payable represents notes payable to the State of Michigan for loans made to the school district, as authorized by the State of Michigan Constitution, for the purpose of paying principal and interest on general obligation bonds of the school district issued for capital expenditures. Interest rates are to be annually determined by the State Administrative Board. Interest rates ranging from 4.039% - 5.03529% for the School Revolving Fund notes and 4.50% - 4.875% for the School Bond Loan Fund notes have been assessed for the year ended June 30, 2007. Repayment is required when the millage rate necessary to cover the annual bonded debt services falls below 7.00 mills. The school district is required to levy 7.00 mills and repay to the state any excess of the amount levied over the bonded debt service requirements. Due to the variability of the factors that affect the timing of repayment, including the future amount of state-equalized value of property in the school district, no provision for repayment has been included in the above amortization schedule.


24

NOTE 7 - LONG-TERM DEBT (Concluded)

The following is a summary of long-term obligations for the District for the year ended June 30, 2007:

Compensated General Limited School bondabsences/ obligation obligation loan and

severance pay bonds bonds revolving funds Total

Balance July 1, 2006 543,590$ 34,581,730$ 151,940$ 3,128,164$ 38,405,424$

Additions 8,946 7,900,000 737,144 8,646,090Deletions 9,678,306 9,678,306

Balance June 30, 2007 552,536 32,803,424 151,940 3,865,308 37,373,208

Less current portion 202,748 2,000,000 - - 2,202,748

Total due after one year 349,788$ 30,803,424$ 151,940$ 3,865,308$ 35,170,460$

NOTE 8 - INTERFUND RECEIVABLES AND PAYABLES

Amounts due to and from other funds at June 30, 2007 are as follows:

Receivable fund Amount Payable fund Amount General fund 169,346$ General fund 38$Athletics 38 School lunch 123,820

Athletics 45,526

169,384$ 169,384$

The outstanding balances between funds result mainly from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting systems, and (3) payments between funds are made.

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25

NOTE 9 - EMPLOYEE RETIREMENT SYSTEM - DEFINED BENEFIT PLAN

Plan Description - The District contributes to the statewide Michigan Public School Employees’ Retirement System (MPSERS), a cost sharing multiple-employer state-wide defined benefit public employee retirement plan governed by the State of Michigan. The MPSERS provides retirement survivor and disability benefits and postretirement benefits for health, dental and vision for substantially all employees of the District. The MPSERS was established by Public Act 136 of 1945 and operated under the provisions of Public Act 300 of 1980, as amended. The MPSERS issues a publicly available financial report that includes financial statements and required supplementary information for MPSERS. That report may be obtained by writing to Michigan Public School Employees Retirement System, P.O. Box 30171, Lansing, Michigan 48909-7671 or by calling (800) 381-5111.

Funding Policy - Member Investment Plan (MIP) members enrolled in MIP prior to January 1, 1990 contribute a permanently fixed rate of 3.9% of gross wages. The MIP contribution rate was 4.0% from January 1, 1987, the effective date of the MIP, until January 1, 1990 when it was reduced to 3.9%. Members first hired January 1, 1990 or later and returning members who did not work between January 1, 1987 through December 31, 1989 contribute at the following graduated permanently fixed contribution rate: 3% of the first $5,000; 3.6% of $5,001 through $15,000; 4.3% of all wages over $15,000.

Basic Plan members make no contributions. For a limited period ending December 31, 1992, an active Basic Plan member could enroll in the MIP by paying the contributions that would have been made had enrollment occurred initially on January 1, 1987 or on the date of hire, plus interest. MIP contributions at the rate of 3.9% of gross wages begin at enrollment. Actuarial rate interest is posted to member accounts on July 1st on all MIP monies on deposit for 12 months. If a member leaves MPSERS service and no pension is payable, the member's accumulated contribution plus interest, if any, are refundable.

The District is required to contribute the full actuarial funding contribution amount to fund pension benefits, plus an additional amount to fund retiree health care benefit amounts on a cash disbursement basis. The rates for the year ended June 30, 2007 were 16.34% of payroll through September 30, 2006 and 17.74% effective October 1, 2006 through June 30, 2007. The contribution requirements of plan members and the District are established and may be amended by the MPSERS Board of Trustees. The District contributions to MPSERS for the year ended June 30, 2007, 2006 and 2005 were $2,087,000, $2,025,000 and $1,672,000, respectively, equal to the required contribution for each year.

Other Post-employment Benefits - Retirees have the option of health coverage, which is funded on a cash disbursement basis by the employers. The System has contracted to provide the comprehensive group medical, hearing, dental and vision coverages for retirees and beneficiaries. A significant portion of the premiums is paid by the System with the balance deducted from the monthly pension.

The District is not responsible for the payment of retirement benefits and post-employment benefits which is the responsibility of the State of Michigan.


26

NOTE 10 - RISK MANAGEMENT

The District is exposed to various risk of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees' and natural disasters. The District participates in two distinct pools of educational institutions within the State of Michigan for self-insuring property and casualty and workers' disability compensation. The pools are considered public entity risk pools. The District pays annual premiums to each pool for the respective insurance coverage. In the event a pool's total claims and expenses for a policy year exceed the total normal annual premiums for said years, all members of the specific pool's policy year may be subject to special assessment to make up the deficiency. Each of the pools maintain reinsurance for claims in excess of $500,000 for each occurrence with the overall maximum coverage being unlimited. The District has not been informed of any special assessments being required.

The District continues to carry commercial insurance for other risks of loss, including employee health and accident insurance.

NOTE 11 - COMMITMENTS AND CONTINGENCIES

The District is self-insured for dental and vision coverage. The current year expense for June 30, 2007 was $181,766. Any liability for incurred and unreported claims is considered immaterial. The District has approximately $1,000,000 committed to complete its $25,510,000 bond proposal construction program. At June 30, 2007 the management of the District is not aware of any arbitrage liability.

NOTE 12 - TRANSFERS

The general fund transferred $343,000 to the athletics fund during the current fiscal year. The transfer to the athletic fund was to subsidize operations. The school lunch fund transferred $62,636 to the general fund for current year indirect costs. The interfund transfers in the debt service funds represent the discretionary distribution of school bond loan fund proceeds.

NOTE 13 - SUBSEQUENT EVENTS

The District has approved borrowing $1,500,000 for fiscal year 2008 to replace the note payable as described in Note 6.

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27

REQUIRED SUPPLEMENTARY INFORMATION

Original budget Final budget Actual

Variance with final budget

positive (negative)

REVENUES:Local 2,831,552$ 3,046,314$ 3,023,890$ (22,424)$ State sources 19,169,381 19,073,926 19,072,300 (1,626)Federal sources 358,292 429,992 433,367 3,375Intermediate sources 440,712 384,742 364,480 (20,262)

Total revenues 22,799,937 22,934,974 22,894,037 (40,937)

EXPENDITURES:Instruction:

Basic programs 11,963,762 11,996,555 11,870,649 125,906Added needs 2,177,641 2,240,838 2,210,698 30,140Adult and continuing education 37,606 42,208 36,643 5,565

Total instruction 14,179,009 14,279,601 14,117,990 161,611

Supporting services:Pupil 1,133,447 1,118,456 1,102,774 15,682Instructional staff 739,350 741,986 715,172 26,814General administration 442,430 471,967 460,539 11,428School administration 1,237,075 1,220,294 1,208,898 11,396Business 375,513 399,866 394,054 5,812Operations and maintenance 2,828,982 2,744,259 2,692,706 51,553Transportation 849,354 818,441 786,404 32,037Other support services 473,315 438,082 442,077 (3,995)

Total supporting services 8,079,466 7,953,351 7,802,624 150,727

Community services 566,973 551,436 526,383 25,053

Total expenditures 22,825,448 22,784,388 22,446,997 337,391

EXCESS (DEFICIENCY) OF REVENUESOVER (UNDER) EXPENDITURES (25,511) 150,586 447,040 296,454

OTHER FINANCING SOURCES (USES):Proceeds from sale of fixed assets 6,283 6,328 45AAESA software purchase - 31,094 31,094Operating transfers in 65,000 62,636 (2,364)Operating transfers out (342,380) (343,000) (343,000)

Total other financing sources (uses) (342,380) (271,717) (242,942) 28,775

NET CHANGE IN FUND BALANCE (367,891)$ (121,131)$ 204,098 325,229$

FUND BALANCE:Beginning of year 2,840,822

End of year 3,044,920$


PLAINWELL COMMUNITY SCHOOLSREQUIRED SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULEGENERAL FUND

28

D-19

DRAFT LEGAL OPINION

Plainwell Community SchoolsCounties of Allegan, Kalamazoo and BarryState of Michigan

We have acted as legal counsel in connection with the issuance by Plainwell Community Schools,Counties of Allegan, Kalamazoo and Barry, State of Michigan (the "Issuer"), of bonds in the aggregateprincipal amount of $21,665,000, designated 2008 School Building and Site Bonds (General Obligation-Unlimited Tax) (the "Bonds").

The Bonds are in fully registered form and issued without coupons.

The Bonds are dated September 25, 2008, are subject to redemption prior to maturity at the optionof the Issuer in the manner and at the times as set forth in the Bonds, are of $5,000 denomination or anyintegral multiple thereof, mature serially on May 1 of each year, bearing interest payable on May 1, 2009,and semiannually thereafter on November 1 and May 1 of each year in the amounts and rates as follows:

Year Amount Rate Year Amount Rate2010 $ 200,000 3.000% 2020 $1,830,000 5.000%2011 200,000 3.000 2021 1,845,000 5.0002012 200,000 3.250 2022 1,880,000 4.2502013 200,000 3.250 2023 1,885,000 5.0002014 225,000 3.500 2024 1,885,000 4.3752015 225,000 3.750 2025 1,885,000 4.3752016 500,000 3.750 2026 1,885,000 4.5002017 500,000 4.000 2027 1,885,000 5.0002018 725,000 4.000 2028 1,885,000 5.0002019 1,825,000 5.000

We have examined the documents which we deem authentic and pertinent to the validity of theBonds, including the certified record evidencing the authorization of the Bonds by the board of education ofthe Issuer, a copy of the approval of the Department of Treasury of the State of Michigan to issue the Bonds,a certified copy of the certificate of the Treasurer of the State of Michigan qualifying the Bonds for purposesof Article IX, Section 16, of the Michigan Constitution, and a specimen of the Bond certificates.

Based upon the foregoing, we are of the opinion that under existing law:

(1) the Bonds have been lawfully authorized and issued and are enforceable obligations of theIssuer in accordance with their terms;

(2) the Bonds are the general obligation of the Issuer for which its full faith, credit and resourceshave been irrevocably pledged;

APPENDIX E

E-1

Plainwell Community SchoolsCounties of Allegan, Kalamazoo and BarryState of Michigan Page 2

(3) the Issuer has the power, and is obligated, to levy taxes on all taxable property now situatedwithin the corporate boundaries of the Issuer, without limitation as to rate or amount, sufficient to pay theprincipal of and interest on the Bonds;

(4) the Bonds have been qualified pursuant to Act 92, Public Acts of Michigan, 2005, asamended, enacted pursuant to Article IX, Section 16, of the Michigan Constitution of 1963. Under the termsof said constitutional and statutory provisions, if for any reason the Issuer will be or is unable to pay theprincipal and interest on the Bonds when due, then the Issuer shall borrow, and the State of Michigan shalllend to it, an amount sufficient to enable the Issuer to make the payment;

(5) the Bonds and the interest thereon are exempt from all taxation in the State of Michigan,except (i) inheritance and estate taxes and taxes on gains realized from the sale, payment or other dispositionthereof, and (ii) pursuant to Act 36, Public Acts of Michigan, 2007, as amended, the Michigan Business TaxAct, certain taxpayers may have to take into account interest on the Bonds in determining Michigan businesstax liabilities; and

(6) the interest on the Bonds is excluded from gross income for federal income tax purposes andis not an item of tax preference for purposes of the federal alternative minimum tax imposed on individualsand corporations; it should be noted, however, that certain corporations must take into account interest on theBonds in determining adjusted net current earnings for the purpose of computing the alternative minimumtax imposed on such corporations. The opinions set forth in the preceding sentence are subject to thecondition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended,that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continueto be, excluded from gross income for federal income tax purposes. The Issuer has covenanted to complywith such requirements. Failure to comply with certain of such requirements may cause the inclusion ofinterest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuanceof the Bonds. We express no opinion regarding other federal tax consequences arising with respect to theBonds.

The rights of the holders of the Bonds and the enforceability thereof may be subject to bankruptcy,insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore orhereafter enacted to the extent constitutionally applicable and that their enforcement of such rights may alsobe subject to the exercise of judicial discretion in appropriate cases.

THRUN LAW FIRM, P.C.

TLF:PJB

E-2

FORM OFCONTINUING DISCLOSURE AGREEMENT

$21,665,000PLAINWELL COMMUNITY SCHOOLS

COUNTIES OF ALLEGAN, KALAMAZOO AND BARRYSTATE OF MICHIGAN

2008 SCHOOL BUILDING AND SITE BONDS(GENERAL OBLIGATION - UNLIMITED TAX)

This Continuing Disclosure Agreement (the "Agreement") is executed and delivered byPlainwell Community Schools, Counties of Allegan, Kalamazoo and Barry, State of Michigan (the"Issuer"), in connection with the issuance of $21,665,000 2008 School Building and Site Bonds(General Obligation - Unlimited Tax) (the "Bonds"). The Bonds are being issued pursuant toResolutions adopted by the Board of Education of the Issuer on August 18, 2008 andSeptember 4, 2008 (the "Resolutions"). The Issuer covenants and agrees as follows:

SECTION 1. Purpose of the Disclosure Agreement. This Agreement is being executed anddelivered by the Issuer for the benefit of the Bondholders and in order to assist the ParticipatingUnderwriter in complying with the Rule. The Issuer acknowledges that this Agreement does notaddress the scope of any application of Rule 10b-5 promulgated by the SEC pursuant to the 1934Act to the Annual Reports or notices of the Listed Events provided or required to be provided by theIssuer pursuant to this Agreement.

SECTION 2. Definitions. In addition to the definitions set forth in the Resolution, whichapply to any capitalized term used in this Agreement unless otherwise defined in this Section, thefollowing capitalized terms shall have the following meanings:

"Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and asdescribed in, Sections 3 and 4 of this Agreement.

"Bondholder" means the registered owner of a Bond or any person which (a) has the power,directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds(including any person holding Bonds through nominees, depositories or other intermediaries), or (b)is treated as the owner of any Bond for federal income tax purposes.

"Dissemination Agent" means any agent designated as such in writing by the Issuer andwhich has filed with the Issuer a written acceptance of such designation, and such agent's successorsand assigns.

"Listed Events" shall mean any of the events listed in Section 5(a) of this Agreement.

"MSRB" shall mean the Municipal Securities Rulemaking Board.

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APPENDIX F

"National Repository" shall mean any Nationally Recognized Municipal SecuritiesInformation Repository for purposes of the Rule. Currently, the following are National Repositories:

Bloomberg Municipal Repository Interactive Data Pricing and Reference Data, Inc.100 Business Park Drive Attn: NRMSIRSkillman, New Jersey 08558 100 William Street, 15th FloorTel: (609) 279-3225 New York, New York 10038Fax: (609) 279-5962 Tel: (212) 771-6999E-mail: [email protected] Fax: (212) 771-7390

E-Mail: [email protected]

DPC Data Inc. Standard & Poor's Securities Evaluations, Inc.One Executive Drive 55 Water St. - 45th FloorFort Lee, New Jersey 07024 New York, New York 10041Tel: (201) 346-0701 Tel: (212) 438-4595Fax: (201) 947-0107 Fax: (212) 438-3975E-mail: [email protected] E-Mail: [email protected]

"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.

"Official Statement" shall mean the final Official Statement for the Bonds datedSeptember 4, 2008.

"Participating Underwriter" shall mean any of the original underwriters of the Bondsrequired to comply with the Rule in connection with the offering of the Bonds.

"Repository" shall mean each National Repository and each State Repository.

"Resolution" shall mean the resolutions duly adopted by the Issuer authorizing the issuance,sale and delivery of the Bonds.

"Rule" shall mean Rule 15c2-12 promulgated by the SEC pursuant to the 1934 Act, as thesame may be amended from time to time.

"SEC" shall mean the Securities and Exchange Commission.

"State" shall mean the State of Michigan.

"State Repository" shall mean any public or private repository or entity designated by theState as a state repository for the purpose of the Rule and recognized as such by the SEC. Currently,the following is the State Repository:

F-2

Municipal Advisory Council of Michigan660 Woodward AvenueSuite 1445Detroit, Michigan 48226-3517Tel: (313) 963-0420Fax: (313) 963-0943

SECTION 3. Provision of Annual Reports.

(a) Each year, the Issuer shall provide, or shall cause the Dissemination Agent toprovide, on or prior to the 180th day after the end of the fiscal year of the Issuer commencing withthe fiscal year ending June 30, 2008, to each Repository an Annual Report for the preceding fiscalyear which is consistent with the requirements of Section 4 of this Agreement. Currently, theIssuer's fiscal year ends on June 30. In each case, the Annual Report may be submitted as a singledocument or as separate documents comprising a package, and may include by specific referenceother information as provided in Section 4 of this Agreement; provided, however, that if the auditedfinancial statements of the Issuer are not available by the deadline for filing the Annual Report, theyshall be provided when and if available, and unaudited financial statements in a format similar tothe financial statements contained in the Official Statement shall be included in the Annual Report.

(b) If the Issuer is unable to provide to the Repositories an Annual Report by the daterequired in subsection (a), the Issuer shall send a notice in a timely manner to the MSRB and to theState Repository in substantially the form attached as Appendix A.

(c) If the Issuer's fiscal year changes, the Issuer shall send a notice of such change to theMSRB and to the State Repository in substantially the form attached as Appendix B. If such changewill result in the Issuer's fiscal year ending on a date later than the ending date prior to such change,the Issuer shall provide notice of such change to the MSRB and to the State Repository on or priorto the deadline for filing the Annual Report in effect when the Issuer operated under its prior fiscalyear. Such notice may be provided to the MSRB and to the State Repository along with the AnnualReport, provided that it is filed at or prior to the deadline described above.

SECTION 4. Content of Annual Reports. The Issuer's Annual Report shall contain orinclude by reference the following:

(a) audited financial statements of the Issuer prepared pursuant to State laws,administrative rules and guidelines and pursuant to accounting and reporting policies conformingin all material respects to generally accepted accounting principles as applicable to governmentalunits as such principles are prescribed, in part, by the Financial Accounting Standards Board andmodified by the Government Accounting Standards Board and in effect from time to time; and

(b) additional annual financial information and operating data as set forth in the OfficialStatement under "CONTINUING DISCLOSURE".

F-3

Any or all of the items listed above may be included by specific reference to otherdocuments, including official statements of debt issues of the Issuer or related public entities, whichpreviously have been provided to each of the Repositories or filed with the SEC. If the documentincluded by specific reference is a final official statement, it must be available from the MSRB. TheIssuer shall clearly identify each such other document so included by reference.

SECTION 5. Reporting of Significant Events.

(a) The Issuer covenants to provide, or cause to be provided, notice of the occurrenceof any of the following events with respect to the Bonds, if material, in accordance with the Rule:

(1) principal and interest payment delinquencies(2) non-payment related defaults(3) unscheduled draws on debt service reserves reflecting financial difficulties(4) unscheduled draws on credit enhancements reflecting financial difficulties(5) substitution of credit or liquidity providers, or their failure to perform(6) adverse tax opinions or events affecting the tax-exempt status of the security(7) modifications to rights of security holders(8) bond calls(9) defeasances(10) release, substitution, or sale of property securing repayment of the securities(11) rating changes

(b) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, theIssuer shall as soon as possible determine if such event would constitute material information forthe Bondholders, provided, that any event under Section 5(a)(1), (8), (9), (10) or (11) above (onlywith respect to any change in any rating on the Bonds) will always be deemed to be material.

(c) The Issuer shall promptly cause a notice of the occurrence of a Listed Event,determined to be material in accordance with the Rule, to be filed with the MSRB and with the StateRepository together with a material event notice cover sheet substantially in the form attached asAppendix C. In connection with providing a notice of the occurrence of a Listed Event describedin Section 5(a)(9) above, the Issuer shall include in the notice explicit disclosure as to whether theBonds have been escrowed to maturity or escrowed to call, as well as appropriate disclosure of thetiming of maturity or call.

(d) The Issuer acknowledges that the "rating changes" referred to above in Section5(a)(11) of this Agreement may include, without limitation, any change in any rating on the Bondsor other indebtedness for which the Issuer is liable, or on any indebtedness for which the State isliable.

(e) The Issuer acknowledges that it is not required to provide a notice of a Listed Eventwith respect to credit enhancement when the credit enhancement is added after the primary offeringof the Bonds, the Issuer does not apply for or participate in obtaining such credit enhancement, andsuch credit enhancement is not described in the Official Statement.

F-4

SECTION 6. Termination of Reporting Obligation.

(a) The Issuer's obligations under this Agreement shall terminate upon the legaldefeasance of the Resolution or the prior redemption or payment in full of all of the Bonds.

(b) This Agreement, or any provision hereof, shall be null and void in the event that theIssuer (i) receives an opinion of nationally recognized bond counsel, addressed to the Issuer, to theeffect that those portions of the Rule, which require such provisions of this Agreement, do not orno longer apply to the Bonds, whether because such portions of the Rule are invalid, have beenrepealed, amended or modified, or are otherwise deemed to be inapplicable to the Bonds, as shallbe specified in such opinion, and (ii) delivers notice to such effect to the MSRB, and to the StateRepository, if any.

SECTION 7. Dissemination Agent. The Issuer, from time to time, may appoint or engagea Dissemination Agent to assist it in carrying out its obligations under this Agreement, and maydischarge any such Dissemination Agent, with or without appointing a successor DisseminationAgent.

SECTION 8. Amendment. Notwithstanding any other provision of this Agreement, thisAgreement may be amended, and any provision of this Agreement may be waived to the effect that:

(a) such amendment or waiver is made in connection with a change in circumstances thatarises from a change in legal requirements, a change in law or a change in the identity, nature orstatus of the Issuer, or the types of business in which the Issuer is engaged;

(b) this Agreement as so amended or taking into account such waiver, would havecomplied with the requirements of the Rule at the time of the primary offering of the Bonds, aftertaking into account any amendments or interpretations of the Rule, as well as any change incircumstances, in the opinion of independent legal counsel; and

(c) such amendment or waiver does not materially impair the interests of theBondholders, in the opinion of independent legal counsel.

If the amendment or waiver results in a change to the annual financial information requiredto be included in the Annual Report pursuant to Section 4 of this Agreement, the first Annual Reportthat contains the amended operating data or financial information shall explain, in narrative form,the reasons for the amendment and the impact of such change in the type of operating data orfinancial information being provided. If the amendment or waiver involves a change in theaccounting principles to be followed in preparing financial statements, the Annual Report for theyear in which the change is made shall present a comparison between the financial statements orinformation prepared based on the new accounting principles and those prepared based on theformer accounting principles. The comparison should include a qualitative discussion of suchdifferences and the impact of the changes on the presentation of the financial information. To theextent reasonably feasible, the comparison should also be quantitative. A notice of the change inthe accounting principles should be sent by the Issuer to the MSRB and to the State Repository.Further, if the annual financial information required to be provided in the Annual Report can no

F-5

longer be generated because the operations to which it related have been materially changed ordiscontinued, a statement to that effect shall be included in the first Annual Report that does notinclude such information.

SECTION 9. Additional Information. Nothing in this Agreement shall be deemed to preventthe Issuer from disseminating any other information, using the means of dissemination set forth inthis Agreement or any other means of communication, or including any other information in anyAnnual Report or notice of occurrence of a Listed Event, in addition to that which is required by thisAgreement. If the Issuer chooses to include any information in any Annual Report or notice ofoccurrence of a Listed Event in addition to that which is specifically required by this Agreement,the Issuer shall have no obligation under this Agreement to update such information or include it inany future Annual Report or notice of occurrence of a Listed Event.

SECTION 10. Default. In the event of a failure of the Issuer to comply with any provisionof this Agreement, any Bondholder may take such actions as may be necessary and appropriate,including seeking mandamus or specific performance by court order, to cause the Issuer to complywith its obligations under this Agreement. A default under this Agreement shall not be deemed anEvent of Default under the Resolution or the Bonds, and the sole remedy under this Agreement inthe event of any failure of the Issuer to comply with the Agreement shall be an action to compelperformance.

SECTION 11. Duties of Dissemination Agent. The Dissemination Agent shall have onlysuch duties as are specifically set forth in this Agreement.

SECTION 12. Beneficiaries. This Agreement shall inure solely to the benefit of the Issuer,the Dissemination Agent, the Participating Underwriters, and the Bondholders and shall create norights in any other person or entity.

SECTION 13. Governing Law. This Agreement shall be construed and interpreted inaccordance with the laws of the State, and any suits and actions arising out of this Agreement shallbe instituted in a court of competent jurisdiction in the State. Notwithstanding the foregoing, to theextent this Agreement addresses matters of federal securities laws, including the Rule, thisAgreement shall be construed and interpreted in accordance with such federal securities laws andofficial interpretations thereof.

PLAINWELL COMMUNITY SCHOOLSCOUNTIES OF ALLEGAN, KALAMAZOO AND BARRYSTATE OF MICHIGAN

By:________________________________Its: Superintendent

Dated: September 25, 2008

F-6

APPENDIX A

NOTICE TO THE MSRB AND TO THE STATE REPOSITORYOF FAILURE TO FILE ANNUAL REPORT

Name of Issuer: Plainwell Community Schools, Allegan, Kalamazoo and Barry Counties,Michigan

Name of Bond Issue: 2008 School Building and Site Bonds (General Obligation - Unlimited Tax)

Date of Bonds: September 25, 2008

NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report withrespect to the above-named Bonds as required by Section 3 of its Continuing Disclosure Agreementwith respect to the Bonds. The Issuer anticipates that the Annual Report will be filed by_____________.



Dated: _____________________

F-7

APPENDIX B

NOTICE TO THE MSRB AND THE STATE REPOSITORYOF CHANGE IN ISSUER'S FISCAL YEAR

Name of Issuer: Plainwell Community Schools, Allegan, Kalamazoo and Barry Counties,Michigan

Name of Bond Issue: 2008 School Building and Site Bonds (General Obligation - UnlimitedTax)

Date of Bonds: September 25, 2008

NOTICE IS HEREBY GIVEN that the Issuer's fiscal year has changed. Previously, theIssuer's fiscal year ended on ______________. It now ends on _________________.



Dated: _____________________

F-8

APPENDIX C

MATERIAL EVENT NOTICE COVER SHEET

This cover sheet and material event notice should be sent to the Municipal Securities Rulemaking Board andthe State Repository pursuant to Securities and Exchange Commission Rule 15c2-12(b)(5)(i)(C) and (D).

Issuer's and/or other Obligated Person's Name:

Issuer's Six-Digit CUSIP Number(s):

or Nine-Digit CUSIP Number(s) to which this material event notice relates:

Number of pages of attached material event notice:

Description of Material Events Notice (Check One):

1. ______ Principal and interest payment delinquencies2. ______ Non-payment related defaults3. ______ Unscheduled draws on debt service reserves reflecting financial difficulties4. ______ Unscheduled draws on credit enhancements reflecting financial difficulties5. ______ Substitution of credit or liquidity providers, or their failure to perform6. ______ Adverse tax opinions or events affecting the tax-exempt status of the security7. ______ Modifications to rights of securities holders8. ______ Bond calls9. ______ Defeasances

10. ______ Release, substitution, or sale of property securing repayment of the securities11. ______ Rating changes12. ______ Failure to provide annual financial information as required13. ______ Other material event notice (specify)

I hereby represent that I am authorized by the issuer or its agent to distribute this information publicly:

Signature:

Name: ________________________________________ Title:

Employer:

Address:

City, State, Zip Code:

Voice Telephone Number (___________)

The cover sheet may be faxed to the MSRB at (703) 683-1930. Contact the MSRB at (703) 797-6600with questions regarding this form or the dissemination of this notice. The cover sheet and notice mayalso be faxed to the MAC at (313) 963-0943.

F-9

of 2 Form NY-FG (05/07)

Financial Guaranty Insurance Policy

Issuer: Policy No.:

Obligations: Premium:

Effective Date:

Assured Guaranty Corp., a Maryland corporation (“Assured Guaranty”), in consideration of the payment of the Premium and on the terms and subject to the conditions of this Policy (which includes each endorsement hereto), hereby unconditionally and irrevocably agrees to pay to the trustee (the “Trustee”) or the paying agent (the “Paying Agent”) for the Obligations (as set forth in the documentation providing for the issuance of and securing the Obligations) for the benefit of the Holders, that portion of the Insured Payments which shall become Due for Payment but shall be unpaid by reason of Nonpayment.

Assured Guaranty will make such Insured Payments to the Trustee or the Paying Agent on the later to occur of (i) the date

applicable principal or interest becomes Due for Payment, or (ii) the Business Day next following the day on which Assured Guaranty shall have Received a completed Notice of Nonpayment. If a Notice of Nonpayment by Assured Guaranty is incomplete or does not in any instance conform to the terms and conditions of this Policy, it shall be deemed not Received, and Assured Guaranty shall promptly give notice to the Trustee or the Paying Agent. Upon receipt of such notice, the Trustee or the Paying Agent may submit an amended Notice of Nonpayment. The Trustee or the Paying Agent will disburse the Insured Payments to the Holders only upon receipt by the Trustee or the Paying Agent, in form reasonably satisfactory to it of (i) evidence of the Holder's right to receive such payments, and (ii) evidence, including without limitation any appropriate instruments of assignment, that all of the Holder's rights to payment of such principal or interest Due for Payment shall thereupon vest in Assured Guaranty. Upon and to the extent of such disbursement, Assured Guaranty shall become the Holder of the Obligations, any appurtenant coupon thereto and right to receipt of payment of principal thereof or interest thereon, and shall be fully subrogated to all of the Holder's right, title and interest thereunder, including without limitation the right to receive payments in respect of the Obligations. Payment by Assured Guaranty to the Trustee or the Paying Agent for the benefit of the Holders shall discharge the obligation of Assured Guaranty under this Policy to the extent of such payment.

This Policy is non-cancelable by Assured Guaranty for any reason. The Premium on this Policy is not refundable for any

reason. This Policy does not insure against loss of any prepayment premium or other acceleration payment which at any time may become due in respect of any Obligation, other than at the sole option of Assured Guaranty, nor against any risk other than Nonpayment.

Except to the extent expressly modified by any endorsement hereto, the following terms shall have the meanings specified

for all purposes of this Policy. “Avoided Payment” means any amount previously distributed to a Holder in respect of any Insured Payment by or on behalf of the Issuer, which amount has been recovered from such Holder pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court having competent jurisdiction that such payment constitutes an avoidable preference with respect to such Holder. “Business Day” means any day other than (i) a Saturday or Sunday, (ii) any day on which the offices of the Trustee, the Paying Agent or Assured Guaranty are closed, or (iii) any day on which banking institutions are authorized or required by law, executive order or governmental decree to be closed in the City of New York or in the State of Maryland. “Due for Payment” means (i) when referring to the principal of an Obligation, the stated maturity date thereof, or the date on which such Obligation shall have been duly called for mandatory sinking fund redemption, and does not refer to any earlier date on which payment is due by reason of a call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity (unless Assured Guaranty in its sole discretion elects to make any principal payment, in whole or in part, on such earlier date) and (ii) when referring to interest on an Obligation, the stated date for payment of such interest. “Holder” means, in respect of any Obligation, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Obligation to payment of principal or interest thereunder, except that Holder shall not include the Issuer or any person or entity whose direct or indirect obligation constitutes the underlying security for the Obligations. “Insured Payments” means that portion of the principal of and interest on the Obligations that shall become Due for Payment but shall be unpaid by reason of Nonpayment. Insured Payments shall not include any additional amounts owing by the Issuer solely as a result of the failure by the Trustee or the Paying Agent to pay such amount when due and payable, including without limitation any such additional amounts as may be attributable to penalties or to interest accruing at a default rate, to amounts payable in respect of indemnification, or to any other additional amounts payable by the Trustee or the Paying Agent by reason of such failure. “Nonpayment” means, in respect of an Obligation, the failure of the Issuer to have provided sufficient funds to the Trustee or the Paying Agent for payment in full of all principal and interest Due for Payment on such Obligation. It is further understood that the term "Nonpayment" in respect of an Obligation includes any Avoided Payment. “Receipt” or “Received” means actual receipt or notice of or, if notice is given by overnight or other delivery service, or by certified or registered United States mail, by a delivery receipt signed by a person authorized to accept delivery on behalf of the person to whom the notice was given. Notices to Assured Guaranty may be mailed by registered mail or personally delivered or telecopied to it at 1325 Avenue of the Americas, New York, New York 10019, Telephone Number: (212) 974-0100, Facsimile Number: (212) 581-3268, Attention: Risk Management Department – Public Finance Surveillance, with a copy to the General Counsel, or to such other address as shall be specified by Assured Guaranty to the Trustee or the Paying Agent in writing. A Notice of Nonpayment will be deemed to be Received by Assured Guaranty on a given Business Day if it is Received prior to 12:00 noon (New York City time) on such Business Day; otherwise it will be deemed Received on the next Business Day. “Term” means the period from and including the Effective Date until the earlier of (i) the maturity date for the Obligations, or (ii) the date on which the Issuer has made all payments required to be made on the Obligations.

G-1

APPENDIX G

of 2 Form NY-FG (05/07)

At any time during the Term of this Policy, Assured Guaranty may appoint a fiscal agent (the “Fiscal Agent”) for purposes of this Policy by written notice to the Trustee or the Paying Agent, specifying the name and notice address of such Fiscal Agent. From and after the date of Receipt of such notice by the Trustee or the Paying Agent, copies of all notices and documents required to be delivered to Assured Guaranty pursuant to this Policy shall be delivered simultaneously to the Fiscal Agent and to Assured Guaranty. All payments required to be made by Assured Guaranty under this Policy may be made directly by Assured Guaranty or by the Fiscal Agent on behalf of Assured Guaranty. The Fiscal Agent is the agent of Assured Guaranty only, and the Fiscal Agent shall in no event be liable to the Trustee or the Paying Agent for any acts of the Fiscal Agent or any failure of Assured Guaranty to deposit, or cause to be deposited, sufficient funds to make payments due under this Policy.

To the fullest extent permitted by applicable law, Assured Guaranty hereby waives, in each case for the benefit of the Holders only, all rights and defenses of any kind (including, without limitation, the defense of fraud in the inducement or in fact or any other circumstance that would have the effect of discharging a surety, guarantor or any other person in law or in equity) that may be available to Assured Guaranty to deny or avoid payment of its obligations under this Policy in accordance with the express provisions hereof. Nothing in this paragraph will be construed (i) to waive, limit or otherwise impair, and Assured Guaranty expressly reserves, Assured Guaranty’s rights and remedies, including, without limitation: its right to assert any claim or to pursue recoveries (based on contractual rights, securities law violations, fraud or other causes of action) against any person or entity, in each case, whether directly or acquired as a subrogee, assignee or otherwise, subsequent to making any payment to the Trustee or the Paying Agent, in accordance with the express provisions hereof, and/or (ii) to require payment by Assured Guaranty of any amounts that have been previously paid or that are not otherwise due in accordance with the express provisions of this Policy.

This Policy (which includes each endorsement hereto) sets forth in full the undertaking of Assured Guaranty with respect to the subject matter hereof, and may not be modified, altered or affected by any other agreement or instrument, including, without limitation, any modification thereto or amendment thereof. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW. This Policy will be governed by, and shall be construed in accordance with, the laws of the State of New York.

IN WITNESS WHEREOF, Assured Guaranty has caused this Policy to be affixed with its corporate seal, to be signed by its duly authorized officer, and to become effective and binding upon Assured Guaranty by virtue of such signature.

ASSURED GUARANTY CORP.

(SEAL)

By:__________________________________ [Insert Authorized Signatory Name] [Insert Authorized Signatory Title]

Signature attested to by:

_______________________________ Counsel

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