NOTICE SILVER CONSOLIDATED SCHOOL DISTRICT … · notice $5,000,000* silver consolidated school district no. 1 grant county, new mexico general obligation school building bonds series

NOTICE

$5,000,000*

SILVER CONSOLIDATED SCHOOL DISTRICT NO. 1

GRANT COUNTY, NEW MEXICO

GENERAL OBLIGATION SCHOOL BUILDING BONDS

SERIES 2017

Preliminary Official Statement, subject to completion,

June 9, 2017

The Preliminary Official Statement, dated June 9, 2017 (the "Preliminary Official Statement"),

relating to the above-described bonds (the "Bonds") of the Silver Consolidated School District No. 1 (the

"District"), has been posted as a matter of convenience. The posted version of the Preliminary Official

Statement has been formatted in Adobe Portable Document Format. Although this format should replicate

the Preliminary Official Statement available from the District, appearance may vary for a number of

reasons, including electronic communication difficulties or particular user software or hardware. Using

software other than Adobe Acrobat may cause the Preliminary Official Statement that you view or print to

differ in appearance from the Preliminary Official Statement.

The Preliminary Official Statement and the information contained therein are subject to completion

or amendment or other change without notice. Under no circumstances shall the Preliminary 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.

For purposes of Rule 15c2-12 promulgated by the Securities and Exchange Commission, the

Preliminary Official Statement alone, and no other document or information on the internet, constitutes the

"Official Statement" that the District has deemed "final" as of its date in respect of the Bonds, except for

certain information permitted to be omitted therefrom.

No person has been authorized to give any information or to make any representations other than

those contained in the Preliminary Official Statement in connection with the offer and sale of the Bonds

and, if given or made, such information or representations must not be relied upon as having been

authorized. The information and expressions of opinion in the Preliminary Official Statement are subject

to change without notice and neither the delivery of the Official Statement nor any sale made thereunder

shall, under any circumstances, create any implication that there has been no change in the affairs of the

District since the date of the Preliminary Official Statement.

By choosing to proceed and view the electronic version of the Preliminary Official Statement, you

acknowledge that you have read and understood this Notice.

Preliminary Official Statement June 9, 2017.

_______________________________ *Preliminary, subject to change

BOOK-ENTRY ONLY MOODY’S RATING: “Baa2” MOODY’S ENHANCED RATING: “Aa2”

BANK QUALIFIED

The delivery of the Bonds is subject to the opinions of Rodey, Dickason, Sloan, Akin, & Robb, P.A., Bond Counsel. On the initial date

of delivery of the Bonds, Rodey, Dickason, Sloan, Akin, & Robb, P.A. will render its opinion that, under existing laws, regulations, rulings, and judicial decisions, and assuming continuing compliance with the covenants described herein, interest on the Bonds is excluded from gross income

for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The interest on the Bonds

may be subject to certain federal taxes imposed only on certain corporations, including imposition of the corporate alternative minimum taxes on a portion of that interest. Also on the initial date of delivery of the Bonds, Bond Counsel will render its opinion that interest on the Bonds is exempt,

under existing law, from personal income taxation by the State of New Mexico. See "Legal Matters" and "Tax Matters" herein for a discussion of

Bond Counsel’s opinion, including a description of certain alternative minimum tax consequences for corporations. See "TAX MATTERS" regarding certain other tax considerations.

$5,000,000*



GENERAL OBLIGATION SCHOOL BUILDING BONDS

SERIES 2017

Dated: Date of Delivery Due: August 1, as shown below

The Series 2017 Bonds (the “Bonds”) are issuable as fully registered bonds and, when issued, will be registered in the name of Cede &

Co., as nominee of The Depository Trust Company, New York, New York to which principal and interest payments on the Bonds will be made.

Individual purchases will be made in book-entry form only, in the principal amount of $5,000 or any whole multiple thereof. Purchasers of the Bonds will not receive physical delivery of bond certificates. So long as Cede & Co. is the registered owner of the Bonds, reference herein to the

holders of the Bonds or registered owner of the Bonds shall mean Cede & Co. and shall not mean the Beneficial Owners of the Bonds. So long as Cede & Co. is the registered owner of the Bonds, the principal and interest (first payable on February 1, 2018 and thereafter semiannually on each

August 1 and February 1) are payable to Cede & Co., which will in turn remit such principal and interest to the DTC Participants (as defined herein)

for subsequent disbursement to the Beneficial Owners of the Bonds. See "Book Entry Only System" herein.

The Bonds maturing on and after August 1, 2026 are subject to optional redemption on August 1, 2025, or any date thereafter at par plus

accrued interest to the redemption date.

Proceeds of the Bonds will be used for the purpose of erecting, remodeling, making additions to and furnishing school buildings;

purchasing or improving school grounds, purchasing computer software and hardware for student use in public schools, providing matching funds for capital outlay projects funded pursuant to the Public School Capital Outlay Act; or any combination of these purposes, and to pay the cost of

issuance of the Bonds, and to reimburse the District for expenditures made for the foregoing purposes, said Bonds are to be payable from general

(ad valorem) taxes and to be issued and sold at such time or times upon such terms and conditions as the Board may determine.

MATURITIES, INTEREST RATES AND YIELDS*

Year Maturing Interest Year Maturing Interest

(August 1) Principal Rate Yield Cusip # (August 1) Principal Rate Yield Cusip #

2018 $1,180,000 2028 195,000

2019 130,000 2029 205,000

2020 135,000 2030 215,000

2021 145,000 2031 225,000

2022 150,000 2032 235,000

2023 155,000 2033 245,000

2024 165,000 2034 255,000

2025 170,000 2035 265,000

2026 180,000 2036 275,000

2027 185,000 2037 290,000

The Bonds are offered for delivery when, as, and if issued, subject to the approval of legality by Rodey, Dickason, Sloan, Akin, & Robb,

P.A., Santa Fe, New Mexico, Bond Counsel, and certain other conditions. The written approval of the New Mexico Attorney General of the Bonds

as to form and legality will be supplied. It is expected that the Bonds will be available for delivery through the facilities of The Depository Trust

Company, New York, New York on or about June 30, 2017*.

Dated: June __, 2017

*Preliminary, subject to change.

BAIRD

USE OF INFORMATION IN THIS OFFICIAL STATEMENT

No dealer, salesman or other person has been authorized by the Silver Consolidated School District

No. 1 (the "District") to give any information or to make any statements or representations, other than those

contained in this Official Statement, and, if given or made, such other information, statements or

representations must not be relied upon as having been authorized. This Official Statement does not

constitute an offer to sell or solicitation of an offer to buy any of the Bonds in any jurisdiction in which

such offer or solicitation is not authorized, or in which any person making such offer or solicitation is not

qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation in such

jurisdiction. The information set forth or included in this Official Statement has been provided by the

District and from other sources believed by the District to be reliable. The information and expressions of

opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor

any sale hereunder shall create any implication that there has been no change in the financial condition or

operations of the District described herein since the date hereof. This Official Statement contains, in part,

estimates and matters of opinion that are not intended as statements of fact, and no representation or

warranty is made as to the correctness of such estimates and opinions or that they will be realized.

The Bonds have not been registered under the Securities Act of 1933, in reliance upon exemptions

contained in such Act. The registration and qualification of the Bonds in accordance with applicable

provisions of the securities law of the states in which the Bonds have registered or qualified and the

exemption from registration or qualification in other states cannot be regarded as a recommendation thereof.

Neither the Securities and Exchange Commission nor any other federal, state, municipal or other

governmental entity, nor any agency or department thereof, has passed upon the merits of the Bonds or the

accuracy or completeness of this Official Statement. Any representation to the contrary may be a criminal

offense.

This Official Statement is "deemed final" by the District for purposes of Rule 15c2-12 of the

Municipal Securities Rulemaking Board. The District has covenanted to provide such annual financial

statements and other information in the manner as may be required by regulations of the Securities and

Exchange Commission or other regulatory body.

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN

EXAMINATION OF THE DISTRICT 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.

This Official Statement contains statements that are "forward-looking statements" as defined in the

Private Securities Litigation Reform Act of 1995. When used in this Official Statement, the words

"estimate," "project," "intend," "expect," and similar expressions are intended to identify forward-looking

statements. Such statements are subject to risks and uncertainties that could cause actual results to differ

materially from those contemplated in such forward-looking statements. Readers are cautioned not to place

undue reliance on these forward-looking statements, which speak only as of the date hereof.



2810 N. Swan Street

Silver City, New Mexico 88061

(575) 956-2000

BOARD OF EDUCATION

President Mike McMillan

Vice President Frances Vasquez

Secretary Ashley Montenegro

Member Patrick Cohn

Member Justin Wecks

ADMINISTRATION

Superintendent

Associate Superintendent

Audie Brown

Candy Milam

Director of Finance Michele McCain

MUNICIPAL ADVISOR

George K. Baum & Company

6565 Americas Parkway NE, Suite 860

Albuquerque, New Mexico 87110

(505) 872-2320

BOND COUNSEL

Rodey, Dickason, Sloan, Akin, & Robb, P.A.

201 3rd Street NW, Suite 2200

Albuquerque, New Mexico 87102

(505) 765-5900

PAYING AGENT/REGISTRAR

BOKF, NA

100 Sun Avenue NE, Suite 500

Albuquerque, NM 87109

(505) 222-8447

UNDERWRITER

Robert W. Baird & Co., Inc.

210 University Blvd., Suite 460

Denver, Colorado 80206

(303) 270-6337

i

TABLE OF CONTENTS

Page

INTRODUCTORY INFORMATION .......................................................................................................... 1

SUMMARY INFORMATION ..................................................................................................................... 2

DEBT SERVICE REQUIREMENTS ............................................................................................................ 3

DESCRIPTION OF THE BONDS ............................................................................................................... 4

AUTHORIZATION AND USE OF PROCEEDS ........................................................................................ 4

PAYING AGENT/REGISTRAR .................................................................................................................. 4

PAYMENT OF PRINCIPAL AND INTEREST; RECORD DATE ............................................................ 4

REGISTRATION, TRANSFER AND EXCHANGE .................................................................................. 5

PRIOR REDEMPTION ................................................................................................................................ 5

BOOK ENTRY ONLY SYSTEM ................................................................................................................ 5 General ...................................................................................................................................................... 6

SECURITY AND SOURCE OF PAYMENT .............................................................................................. 7

TAX MATTERS ........................................................................................................................................... 7

NEW MEXICO INCOME TAX OPINION ................................................................................................. 8

QUALIFIED TAX-EXEMPT OBLIGATIONS ........................................................................................... 9

LEGALITY ................................................................................................................................................... 9

REGISTRATION ......................................................................................................................................... 9

LITIGATION ................................................................................................................................................ 9

CONTINUING DISCLOSURE .................................................................................................................. 10 Annual Reports ........................................................................................................................................ 10 Material Event Notices ............................................................................................................................ 10 Availability of Information from MSRB and SID .................................................................................. 11 Limitations and Amendments ................................................................................................................. 11

COMPLIANCE WITH PRIOR UNDERTAKINGS .................................................................................. 11

RATING ..................................................................................................................................................... 12

NEW MEXICO SCHOOL DISTRICT ENHANCEMENT PROGRAM ................................................... 12

TRANSCRIPT AND CLOSING DOCUMENTS ...................................................................................... 12

MUNICIPAL ADVISOR ............................................................................................................................ 13

ii

UNDERWRITING ..................................................................................................................................... 13

ADDITIONAL INFORMATION ............................................................................................................... 13

OFFICIAL STATEMENT CERTIFICATION ........................................................................................... 14

BORROWING CAPACITY ........................................................................................................................ 15

FINANCIAL INFORMATION .................................................................................................................. 16 Reassessment ........................................................................................................................................... 17 Comparison of Assessed Value ............................................................................................................... 18 Assessed Valuation of the Largest Centrally Assessed Taxpayers in the District .................................. 18

TAX RATES ............................................................................................................................................... 18 Yield Control ........................................................................................................................................... 18

TAX DATA ................................................................................................................................................ 19 Method of Tax Collection ....................................................................................................................... 20 Interest On Delinquent Taxes .................................................................................................................. 20 Delinquent Taxes Penalty ........................................................................................................................ 20 Remedies Available for Non-Payment of Taxes ..................................................................................... 21

OUTSTANDING GENERAL OBLIGATION BONDS ............................................................................ 22 Authorized but Unissued General Obligation Bonds .............................................................................. 22

SILVER CONSOLIDATED SCHOOL DISTRICT NO. 1 .......................................................................... 23 General .................................................................................................................................................... 23 Board of Education .................................................................................................................................. 23 Administrative Staff ................................................................................................................................. 23 Enrollment History ................................................................................................................................... 23 Finances of the Educational Program ....................................................................................................... 24 General Fund ........................................................................................................................................... 24

APPENDIX A – General Information – Grant County

APPENDIX B – Form of Opinion of Bond Counsel

APPENDIX C – Excerpt of District’s 2016 Audited Financial Report

APPENDIX D – Form of Continuing Disclosure Undertaking

1

INTRODUCTORY INFORMATION

This Official Statement has been prepared by George K. Baum & Company, employed by the Silver

Consolidated School District No. 1 (the "District") to perform professional services in the capacity of

Municipal Advisor. The purpose of this Official Statement is to provide information concerning the

offering by the District of General Obligation School Building Bonds, Series 2017, dated June 30, 2017*

in the principal amount of $5,000,000* (the "Bonds") approved by the voters at a regular school bond

election held February 7, 2017. All financial and other information presented in this Official Statement has

been obtained from the District, the Grant County Assessor’s and Treasurer’s offices, the State of New

Mexico Public Education Department and other sources which are believed to be reliable, but such

information is not guaranteed as to accuracy or completeness and its inclusion is not to be construed as a

representation on the part of the Board of Education of the District (the “Board”). No person, including

any broker, dealer or salesman, has been authorized to give any information or to make any representations

other than those contained in this Official Statement, and, if given or made, such other information or

representations must not be relied upon as having been authorized by the Board. Any information or

expressions of opinion herein are subject to change without notice and neither the delivery of the Official

Statement nor any supplement to the Official Statement nor any sale hereunder shall, under any

circumstances, create any implication that there has been no change as to the affairs of the District.


2

SUMMARY INFORMATION

The following information is not a full description of the Bonds and is subject to the more complete

information contained elsewhere in this Official Statement, including the appendices.

Date of Issue: The Bonds are dated June 30, 2017.*

Purpose: Proceeds of the Bonds will be used for the purpose of erecting, remodeling, making

additions to and furnishing school buildings; purchasing or improving school

grounds, purchasing computer software and hardware for student use in public

schools, providing matching funds for capital outlay projects funded pursuant to

the Public School Capital Outlay Act; or any combination of these purposes, and

to pay the cost of issuance of the Bonds, and to reimburse the District for

expenditures made for the foregoing purposes, said Bonds to be payable from

general (ad valorem) taxes and to be issued and sold at such time or times upon

such terms and conditions as the Board may determine.

Authorization: The Bonds were authorized at a regular election held within the District on

February 7, 2017, and by Resolution of the Board (“Bond Resolution”) adopted on

May 25, 2017, and are issued pursuant to NMSA 1978, Sections 6-15-1 through 6-

15-22, as amended.

Interest Payments: Interest is payable February 1 and August 1, commencing February 1, 2018.

Maturity: The Bonds mature annually on August 1, 2018 through 2037.

Redemption: The Bonds maturing on and after August 1, 2026 are subject to optional

redemption on August 1, 2025, or any date thereafter at par plus accrued interest

to the redemption date.

Security: The Bonds are General Obligation School Building Bonds of the District and are

payable from general ad valorem taxes which may be levied against all taxable

property within the District without limitation as to rate or amount.

Designation: In a resolution authorizing the issuance of the Bonds, the District expects to

designate the Bonds as qualified tax-exempt obligations for purposes of

Section 265(b)(3)(B) of the Internal Revenue Code of 1986, as amended.

Tax Status: Interest on the Bonds is excludable from gross income for federal income tax

purposes and is exempt from taxation by the State of New Mexico. (See “Tax

Matters” herein.)

Delivery: Delivery of the Bonds to the Underwriter is expected on June 30, 2017.*

Registrar/

Paying Agent: BOKF, NA, Albuquerque, New Mexico.


3

DEBT SERVICE REQUIREMENTS

Series 2017 Bonds* Calendar

Year

Outstanding

Debt Service Principal Interest

Est. Total Debt

Service

2017 $1,475,380

2018 - $1,180,000

2019 - 130,000

2020 - 135,000

2021 - 145,000

2022 - 150,000

2023 - 155,000

2024 - 165,000

2025 - 170,000

2026 - 180,000

2027 - 185,000

2028 - 195,000

2029 - 205,000

2030 - 215,000

2031 - 225,000

2032 - 235,000

2033 - 245,000

2034 - 255,000

2035 - 265,000

2036 - 275,000

2037 - 290,000

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)


4

DESCRIPTION OF THE BONDS

The Bonds will be dated June 30, 2017*, will mature annually on August 1, 2018 through 2037,

and will bear interest at the rates set forth on the cover page of the Final Official Statement.

AUTHORIZATION AND USE OF PROCEEDS

The Bonds are being issued pursuant to the Board's powers under NMSA 1978, Sections 6-15-1

through 6-15-22, as amended and supplemented, the Constitution of the State of New Mexico and other

laws of the State, and the Bond Resolution, and constitute the first installment of $5,000,000 of $20,000,000

of General Obligation School Building Bonds authorized by the qualified voters of the District at a regular

school district election held on February 7, 2017. Pursuant to NMSA 1978, Section 22-18-9, the written

approval of the New Mexico Attorney General will be supplied as to the form and legality of the Bonds.

Proceeds of the Bonds will be used for the purpose of erecting, remodeling, making additions to

and furnishing school buildings; purchasing or improving school grounds, purchasing computer software

and hardware for student use in public schools, providing matching funds for capital outlay projects funded

pursuant to the Public School Capital Outlay Act; or any combination of these purposes, and to pay the cost

of issuance of the Bonds, and to reimburse the District for expenditures made for the foregoing purposes,

said Bonds are to be payable from general (ad valorem) taxes and to be issued and sold at such time or

times upon such terms and conditions as the Board may determine.

PAYING AGENT/REGISTRAR

BOKF, NA, Albuquerque, New Mexico will serve as the Bond Paying Agent/Registrar (the "Paying

Agent/Registrar") for the Bonds.

PAYMENT OF PRINCIPAL AND INTEREST; RECORD DATE

Subject to "Book Entry Only System" below, interest on the Bonds is payable by check mailed on

or before each Interest Payment Date by the Paying Agent/Registrar (defined below) to the registered owner

at the last known address as it appears on the bond registration books (the "Registration Books") kept by

the Paying Agent/Registrar on the Record Date (as defined below), except that the interest on any Bond

payable at the maturity thereof shall be paid only upon presentation of such Bond at the office of the Paying

Agent/Registrar. At the request and expense of a person entitled to a payment of interest on the Bonds,

payment of interest may be made by any other method acceptable to the Paying Agent/Registrar. The

record date (the "Record Date") for the interest payable on any Interest Payment Date is the fifteenth day

of the month next preceding such Interest Payment Date. In the event of a non-payment of interest on a

scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special

Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of

such interest have been received from the District. Notice of the Special Record Date and of the scheduled

payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at

least five business days prior to the Special Record Date by United States mail, first class postage prepaid,

to the address of each registered owner of a Bond appearing on the registration books of the Paying

Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such

notice.

If the date for any payment due on any Bond shall be a Saturday, Sunday, a legal holiday or a day

on which the Paying Agent/Registrar is located is authorized or required by law or executive order to close,


5

then the date for such payment shall be the next succeeding business day, and payment on such date shall

have the same force and effect as if made on the original date payment was due.

REGISTRATION, TRANSFER AND EXCHANGE

Subject to "Book Entry Only System" below, the Bonds may be transferred, registered and assigned

only on the Registration Books, and such registration and transfer shall be without expense or service charge

to the registered owner, except for any tax or other governmental charges required to be paid with respect

to such registration and transfer. A Bond may be assigned by the execution of an assignment form on the

Bonds or by other instrument of transfer and assignment acceptable to the Paying Agent/Registrar. A new

Bond or Bonds will be delivered by the Paying Agent/Registrar in lieu of the Bond being transferred or

exchanged at the principal corporate trust office of the Paying Agent/Registrar. To the extent possible, new

Bonds issued in an exchange or transfer of Bonds will be delivered to the registered owner or assignee of

the registered owner in not more than three business days after the receipt of the Bonds to be canceled in

the exchange or transfer and the written instrument of transfer or request for exchange duly executed by the

registered owner or its duly authorized agent, in form satisfactory to the Paying Agent/Registrar. New

Bonds registered and delivered in an exchange or transfer shall be in denominations of $5,000 of principal

amount or any integral multiple thereof for any one maturity, shall specify the same maturity date and be

for a like aggregate amount as the Bond or Bonds surrendered for exchange or transfer. Neither the District

nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Bond during the period

beginning on the Record Date or Special Record Date and ending on the day subsequent to the next

following Interest Payment Date.

PRIOR REDEMPTION

The Bonds maturing on and after August 1, 2026 are subject to optional redemption on August 1,

2025, or any date thereafter at par plus accrued interest to the redemption date.

BOOK ENTRY ONLY SYSTEM

Unless otherwise noted, the information contained under the caption “General” below has been

provided by The Depository Trust Company ("DTC"). The District makes no representation as to the

accuracy or the completeness of such information. The Beneficial Owners of the Bonds should confirm the

following information with DTC, the Direct Participants or the Indirect Participants.

NEITHER THE DISTRICT NOR THE FISCAL AGENT WILL HAVE RESPONSIBILITY OR

OBLIGATION TO DIRECT PARTICIPANTS, TO INDIRECT PARTICIPANTS, OR TO ANY

BENEFICIAL OWNER WITH RESPECT TO (A) THE ACCURACY OF ANY RECORDS

MAINTAINED BY DTC, ANY DIRECT PARTICIPANT, OR ANY INDIRECT PARTICIPANT; (B)

ANY NOTICE THAT IS PERMITTED OR REQUIRED TO BE GIVEN TO THE OWNERS OF THE

BONDS UNDER THE BOND RESOLUTION; (C) THE SELECTION BY DTC OR ANY DIRECT

PARTICIPANT OR INDIRECT PARTICIPANT OF ANY PERSON TO RECEIVE PAYMENT IN THE

EVENT OF A PARTIAL REDEMPTION OF THE BONDS; (D) THE PAYMENT BY DTC OR ANY

DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO

THE PRINCIPAL OR INTEREST DUE WITH RESPECT TO THE OWNER OF THE BONDS; (E) ANY

CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE OWNERS OF THE BONDS; OR

(F) ANY OTHER MATTER REGARDING DTC.

6

General

The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the

Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s

partnership nominee) or such other name as may be requested by an authorized representative of DTC. One

fully-registered Bond certificate will be issued for each maturity of the Bonds, in the aggregate principal

amount of such maturity, and will be deposited with DTC.

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

the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law,

a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York

Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A

of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues

of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments

(from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also

facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in

deposited securities, through electronic computerized book-entry transfers and pledges between Direct

Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct

Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing

corporations, and certain other organizations. DTC is a wholly-owned subsidiary of the Depository Trust

& Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, 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 a Standard & Poor’s rating of AA+. The DTC Rules

applicable to Direct Participants are on file with the Securities and Exchange Commission. More

information about DTC can be found at www.dtcc.com. The District undertakes no responsibility for and

makes no representations as to the accuracy or the completeness of the content of such material contained

on that website as described in the preceding sentence including, but not limited to, updates of such

information or links to other Internet sites accessed through the aforementioned website.

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

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 book-entry system for the Bonds is discontinued.

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

registered in the name of DTC’s partnership nominee, Cede & Co. or such other name as may be requested

by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name

of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no

knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of 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.

7

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.

While the Bonds are in the book-entry only system, redemption notices will be sent to DTC. If less

than all of the Bonds are being redeemed, DTC’s practice is to determine by lot the amount of the interest

of each Direct Participant in such issue to be redeemed.

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

the Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its

usual procedures, DTC mails an Omnibus Proxy to the 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).

Redemption proceeds, distributions, and dividend payments 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 District or agent on payable date in accordance with their respective holdings shown on DTC’s

records. Payments by Participants to Beneficial Owners will be governed by standing instructions and

customary practices, as is the case with securities held for the accounts of customers in bearer form or

registered in “street name,” and will be the responsibility of such Participant and not of DTC, agent, or the

District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment

of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as

may be requested by an authorized representative of DTC) is the responsibility of the District or agent,

disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement

of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Bonds at any time by

giving reasonable notice to the District. Under such circumstances, in the event that a successor depository

is not obtained, certificates representing the Bonds are required to be printed and delivered.

The District may decide to discontinue the use of the system of book-entry transfers through DTC

(or a successor securities depository). In that event, certificates representing the Bonds will be printed and

delivered to DTC.

The information in this Official Statement concerning DTC and DTC’s book-entry system has been

obtained from sources that the District believes to be reliable, but neither the District nor the Underwriter

takes any responsibility for the accuracy thereof.

SECURITY AND SOURCE OF PAYMENT

The Bonds are a general obligation of the District. Annual ad valorem taxes will be levied on all

taxable property within the District without limitation as to rate or amount for the purpose of paying

principal and interest on the Bonds.

TAX MATTERS

In the opinion of Rodey, Dickason, Sloan, Akin, & Robb, P.A., Bond Counsel, to be delivered at

the time of the original issuance of the Bonds, under existing laws, regulations, rulings and judicial

8

decisions, the interest on the Bonds is excludable from gross income for federal income tax purposes. Bond

Counsel is further of the opinion that the interest on the Bonds is exempt from taxation by the State and its

political subdivisions.

The Internal Revenue Code of 1986, as amended (the “Code”), imposes various restrictions,

conditions and requirements relating to the exclusion from gross income for federal tax purposes of interest

on obligations, such as the Bonds. The District has covenanted in the Resolution to comply with certain

guidelines designed to assure that interest on the Bonds will not become includible in gross income. Failure

to comply with these covenants may result in the interest on the Bonds being included in gross income from

the date of issue of the Bonds. The opinion of Bond Counsel assumes compliance with such covenants.

Bond Counsel has opined that the interest on the Bonds is not a specific preference item for

purposes of the alternative minimum tax provisions contained in the Code; however, interest on the Bonds

will be included in the adjusted current earnings of certain corporations in the calculation of alternative

minimum tax.

To the extent the issue price of any maturity of the Bonds is less than the amount to be paid at

maturity of such Bonds (excluding amounts stated to be interest and payable at least annually over the term

of such Bonds), the difference constitutes “original issue discount,” the accrual of which, to the extent

properly allocable to each Beneficial Owner thereof, is treated as interest on the Bonds which is excluded

from gross income for federal income tax purposes. Beneficial Owners of the Bonds should consult their

own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount,

including the treatment of Beneficial Owners who do not purchase such Bonds in the original offering to

the public at the first price at which a substantial amount of such Bonds is sold to the public.

Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in

collateral federal income tax consequences to certain taxpayers, including, without limitation, financial

institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad

Retirement benefits, certain S corporations with “excess net passive income,” foreign corporations subject

to the branch profits tax, life insurance companies and taxpayers who may be deemed to have incurred or

continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the

Bonds. Bond Counsel does not express any opinion regarding such collateral tax consequences. Prospective

purchasers of the Bonds should consult their tax advisors regarding collateral federal income tax

consequences.

The opinion of Bond Counsel is based on existing law, which is subject to change. Such opinion

is further based on factual representations made to Bond Counsel as of the date thereof. Bond Counsel

assumes no duty to update or supplement its opinion to reflect any facts or circumstances that may thereafter

come to its attention, or to reflect any changes in law that may thereafter occur or become effective.

Moreover, the opinion of Bond Counsel is not a guarantee of a particular result, and is not binding on the

IRS or the courts; rather, such opinion represents its professional judgment based on its review of existing

law, and in reliance on the representations and covenants that it deems relevant to such opinion.

NEW MEXICO INCOME TAX OPINION

On the date of initial delivery of the Bonds, Rodey, Dickason, Sloan, Akin, & Robb, P.A. will

render its opinion that interest on the Bonds will be excluded from net income for purposes of New

Mexico state income tax. Rodey, Dickason, Sloan, Akin, & Robb, P.A. expresses no opinion as to any

other federal, state or local tax consequences. (See the Forms of Opinion of Bond Counsel in Appendix

B.)

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QUALIFIED TAX-EXEMPT OBLIGATIONS

The District intends to designate the Bonds as Qualified Tax-Exempt Obligations. Section 265(a)

of the Internal Revenue Code of 1986 (the “Code”) provides, in pertinent part, that interest paid or incurred

by a taxpayer, including a "financial institution," on indebtedness incurred or continued to purchase or carry

tax-exempt obligations is not deductible by such taxpayer in determining taxable income. Section 265(b)

of the Code provides an exception to the disallowance of such deduction for any interest expense paid or

incurred on indebtedness of a taxpayer which is a "financial institution" allocable to tax-exempt obligations,

other than "private activity bonds," which are designated by a "qualified small issuer" as "qualified tax-

exempt obligations." A "qualified small issuer" is any governmental issuer (together with any subordinate

issuers) who issues no more than $10,000,000 of tax-exempt obligations during the calendar year. Section

265(b)(5) of the Code defines the term "financial institution" as referring to any corporation described in

Section 585(a)(2) of the Code, or any person accepting deposits from the public in the ordinary course of

such person's trade or business which is subject to federal or state supervision as a financial institution.

LEGALITY

Rodey, Dickason, Sloan, Akin, & Robb, P.A., Albuquerque, New Mexico has been retained as

Bond Counsel to the District ("Bond Counsel"). Bond Counsel will provide an unqualified opinion that the

Bonds are legally issued under New Mexico law and that the interest income from the Bonds is exempt

from Federal and State of New Mexico income taxes. Bond Counsel was not requested to and did not take

part in the preparation of the Official Statement nor has it undertaken to independently verify any of the

information contained herein. Bond Counsel has no responsibility for the accuracy or completeness of any

information furnished in connection with any offer or sale of the Bonds, but such counsel prepared in

cooperation with other persons and are partially responsible for the Official Notice of Meeting and Sale

adopted by the Board on May 25, 2017. The legal fees to be paid to Bond Counsel for services rendered in

connection with the issuance of the Bonds are contingent in part upon the sale and delivery of the Bonds.

REGISTRATION

The Bonds have not been registered under the Federal Securities Act of 1933 or the Securities

Exchange Act of 1934, both as amended, in reliance upon the exemptions provided thereunder by

Sections 3(a)(2) and 3(a)(12), respectively, for the issuance and sale of the Bonds; nor have the Bonds been

qualified under the Securities Act of New Mexico. The District assumes no responsibility for qualification

of the Bonds under the securities laws of any jurisdiction in which the Bonds may be sold, assigned,

pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale

or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the

availability of any exemption from securities registration provisions.

LITIGATION

There is not now pending or threatened, to the best of the knowledge of the District, any litigation

restraining or enjoining the issuance or delivery of the Bonds or questioning or affecting the validity of the

Bonds or the proceedings or authority under which they are to be issued. Neither the creation, organization

or existence, nor the title of a quorum of the present Board members or other officers of the District to their

respective offices, is being questioned. At the time of delivery of the Bonds, the District will deliver a no-

litigation certificate to that effect.

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CONTINUING DISCLOSURE

The District has made the following agreement for the benefit of the holders and beneficial owners

of the Bonds. The District is required to observe the agreement for so long as it remains obligated to

advance funds to pay the Bonds. Under the agreement, the District will be obligated to provide certain

updated financial information and operating data annually, and timely notice of specified material events,

to certain information vendors. This information will be available to securities brokers and others who

subscribe to receive the information from the vendors.

Annual Reports

The District will provide certain updated financial information and operating data to certain

information vendors annually. The information to be updated includes all quantitative financial information

and operating data with respect to the District of the general type included in this Official Statement under

the headings “TAX RATES”, “SILVER CONSOLIDATED SCHOOL DISTRICT NO. 1”, "FINANCIAL

INFORMATION - “Direct and Overlapping G.O. Bond Debt Ratios”, and “Analysis of Assessed

Valuations,” and in Appendix C. The District will update and provide this information by March 31 of

each fiscal year beginning in 2018. The District will provide the updated information and operating data

to the Municipal Securities Rulemaking Boards (the “MSRB”) Electronic Market Access System

(“EMMA”).

The District may provide updated information in full text or may incorporate by reference certain

other publicly available documents, as permitted by SEC Rule 15c2-12. The updated information will

include audited financial statements, if the District commissions an audit and it is completed by the required

time. If audited financial statements are not available by the required time, the District will provide

unaudited financial statements by the required time, and will provide audited financial statements when and

if the audit report becomes available. Any such financial statements will be prepared in accordance with

the accounting principles described in Appendix C or such other accounting principles as the District may

be required to employ from time to time pursuant to state law or regulation.

The District's current fiscal year end is June 30th. Accordingly, it must provide updated financial

information and operating data by March 31 in each year, unless the District changes its fiscal year. If the

District changes its fiscal year, it will notify MSRB and any SID of the change.

Material Event Notices

The District will also provide timely notices of certain events to certain information vendors. The

District will provide notice of any of the following events with respect to the Bonds, if such event is material

to a decision to purchase or sell Bonds or Certificates, respectively: (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 Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond

calls; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Bonds;

(11) rating changes; (12) bankruptcy, insolvency, receivership or a similar event with respect to the District

or an obligated person; (13) the consummation of a merger, consolidation, or acquisition involving an

obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the

ordinary course of business, the entry into a definitive agreement to undertake such an action or the

termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if

material; (14) appointment of a successor or additional trustee, or a change of name of a trustee, if material,

and (15) Tender offers. In addition, the District will provide, within 10 days, notice of any failure by the

11

District to provide information, data or financial statements in accordance with its agreement described

above under "Annual Reports." The District will provide each notice described in this paragraph to the

MSRB.

Availability of Information from MSRB and SID

The District has agreed to provide the foregoing information only to the MSRB and any SID. The

information will be available to holders of Bonds only if the holders comply with the procedures and pay

the charges established by such information vendors or obtain the information through securities brokers

who do so.

No SID has been designated in New Mexico at this time.

Limitations and Amendments

The District has agreed to update information and to provide notices of material events only as

described above. The District has not agreed to provide other information that may be relevant or material

to a complete presentation of its financial results of operations, condition or prospects or agreed to update

any information that is provided, except as described above. The District makes no representation or

warranty concerning such information or concerning its usefulness to a decision to invest in or sell bonds

at any future date. The District disclaims any contractual or tort liability for damages resulting in whole or

in part from any breach of its continuing disclosure agreement or from any statement made pursuant to its

agreement, although holders of Bonds may seek a writ of mandamus to compel the District to comply with

its agreement.

This continuing disclosure agreement may be amended by the District from time to time to adapt

to changed circumstances that arise from a change in legal requirements, a change in law or a change in the

identity, nature, status or type of operations of the District, but only if (1) the provisions, as so amended,

would have permitted an underwriter to purchase or sell Bonds or Certificates in the primary offering of

the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule

since such offering as well as such changed circumstances and (2) either (a) the Holders of a majority in

aggregate principal amount (or any greater amount required by any other provision of the Resolution that

authorizes such an amendment) of the outstanding Bonds consent to such amendment or (b) a person that

is unaffiliated with the District (such as nationally recognized bond counsel) determined that such

amendment will not materially impair the interest of the Holders and beneficial owners of the Bonds. The

District may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends

or repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment that such

provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence would

not prevent an underwriter from lawfully purchasing or selling bonds in the primary offering of the Bonds.

COMPLIANCE WITH PRIOR UNDERTAKINGS

Pursuant to Securities and Exchange Commission Rule 15c2-12, the District will undertake to

provide certain ongoing disclosure, including annual operating data and financial information, audited

financial statements and notices of the occurrence of certain material events.

The District previously has entered into such undertakings pursuant to such Rule with respect to

bonds previously issued by it. The District’s continuing disclosure undertakings provide that while the

Series 2005 Bonds are outstanding, the District will provide certain annual financial information to the

national securities repositories within six months after the end of each fiscal year. The District failed to file

its audited financials and financial operating information for the Fiscal Year 2012 within six months of the

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end of the fiscal year. The District made its 2012 audited financials and financial operating filings available

on EMMA on March 21, 2013.

The District has entered into a written agreement with George K. Baum & Company for limited

clerical and ministerial assistance to help the District meet certain of its continuing disclosure filing

obligations. Those limited clerical and ministerial services include reminders of filing dates and, upon

request by the District, assistance with the process of posting information with the MSRB.

RATING

Moody’s Investors Services, Inc. has assigned its municipal bond rating of “Baa2” (stable outlook)

to the Bonds. In addition, Moody’s Investors Services, Inc. has assigned an “Aa2” (negative outlook)

enhanced rating to the Bonds based on the New Mexico School District Enhancement Program. The ratings

reflect only the view of Moody’s Investors Services, Inc., and an explanation of the significance of such

ratings may be obtained only from Moody’s Investors Services, Inc., 99 Church Street, New York, New

York 10003. There is no assurance that such ratings will continue for any given period of time or that it

will not be revised downward or withdrawn entirely by Moody’s Investors Services, Inc. if, in its judgment,

circumstances warrant. Any such downward revision or withdrawal of the ratings may have an adverse

effect on the market price of the Bonds.

NEW MEXICO SCHOOL DISTRICT ENHANCEMENT PROGRAM

The New Mexico Legislature amended NMSA 1978, Section 22-18-13 in the first session of 2007,

which became effective on March 30, 2007, and is applicable to general obligation bonds issued after such

date. Section 22-18-13 provides that if the District’s Paying Agent notifies the Department of Finance and

Administration on the business day immediately prior to the payment date that a bond payment has not

been received, the Department of Finance and Administration shall forward the amount necessary to make

the payment due on the bonds to the Paying Agent. Such amount will be withheld by the Department of

Finance and Administration from the District’s monthly State Equalization Guarantee distribution (see

“Finances of the Educational Program – State Equalization Guarantee”). If the amount of the next

succeeding distribution is insufficient to pay the amount due, the Department of Finance and Administration

shall withhold amounts from each succeeding payment of the State Equalization Guarantee distribution,

including payments to be made in succeeding fiscal years, but no more than 12 consecutive months of

payments, until the total amount of principal and interest is withheld. Withholding of the State Equalization

Guarantee distribution may affect the District’s ability to continue to operate.

Section 22-18-13 requires filing the Bond Resolution, bond offering documents and contact

information for the Paying Agent with the Department of Finance and Administration. Failure to file such

information will not invalidate the obligation of the State Treasurer to pay the bond payment and withhold

the State Equalization distribution.

Moody’s Investors Service, Inc. has assigned an “Aa2” (negative outlook) rating to New Mexico’s

School District Enhancement Program. By request, Moody’s has assigned the “Aa2” (negative outlook)

rating to school district bonds upon verification of a requirement in the authorizing bond resolution that an

independent, third-party paying agent will be appointed and maintained. Notwithstanding this fact, the

Bonds are qualified and do receive the benefit of the New Mexico School District Enhancement Program.

TRANSCRIPT AND CLOSING DOCUMENTS

A complete transcript of proceedings and a no-litigation certificate (described above under

"Litigation") will be delivered by the District to the purchaser when the Bonds are delivered. The District

13

will at that time also provide a certificate issued by the District relating to the accuracy and completeness

of this Official Statement.

MUNICIPAL ADVISOR

George K. Baum & Company has been retained as Municipal Advisor to the District to assist in the

issuance of the Bonds. In this capacity, the Municipal Advisor has compiled certain data relating to the

Bonds that is contained in this Official Statement. The Municipal Advisor has not independently verified

any of the data contained herein or conducted a detailed investigation of the affairs of the District to

determine the accuracy or completeness of this Official Statement. Because of its limited participation, the

Municipal Advisor assumes no responsibility for the accuracy or completeness of any of the information

contained herein. The fee of the Municipal Advisor for services with respect to the Bonds is contingent

upon the issuance and sale of the Bonds.

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

The Municipal Advisor has reviewed the information in this Official Statement in accordance with, and as

part of, its responsibilities to the District and, as applicable, to investors under the federal securities laws as

applied to the facts and circumstances of this transaction, but the Municipal Advisor does not guarantee the

accuracy or completeness of such information.

UNDERWRITING

The Bonds are being purchased by Robert W. Baird & Co., Inc. (the “Underwriter”) pursuant to a

Bond Purchase Agreement dated June __, 2017. The Underwriter has agreed, subject to certain conditions,

to purchase the Bonds from the District at a price of $_______ (representing the par amount of the Bonds

of $5,000,000*, [plus a net original issue premium] [less a net original issue discount] of $_______, less an

Underwriter’s discount of $________. The Bond Purchase Agreement provides that the Underwriter will

purchase all of the Bonds if any are purchased, the obligation to make such purchase being subject to certain

terms and conditions set forth in the Bond Purchase Agreement, including approval of certain legal matters

by counsel and certain other conditions.

The Underwriter has reviewed the information in this Official Statement pursuant to its

responsibilities to investors under federal securities laws, but the Underwriter does not guarantee the

accuracy or completeness of such information.

The prices at which the Bonds are offered to the public (and the yields resulting therefrom) may

vary from the initial public offering prices appearing on the cover page of this Official Statement. In

addition, the Underwriter may allow commissions or discounts from such initial offering prices to dealers

and others.

ADDITIONAL INFORMATION

Information concerning the Bonds, including the District's Official Statement, may be obtained

from the District's Municipal Advisor, George K. Baum & Company, 6565 Americas Parkway, Suite 860,

Albuquerque, New Mexico 87110. The Official Statement is deemed final by the District for purposes of

SEC Rule 15c2-12(b)(1) except for the omission of the following information: the offering price, interest

rate, selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, any

other terms or provisions required by an issuer of such securities to be specified in a competitive bid, ratings,

other terms of the Bonds depending on such matters, and the identity of the underwriter(s).

14

The District will provide the Final Official Statement and any amendments or supplements thereto

and will undertake all other obligations as contemplated by Rule 15c12-12 of the Securities and Exchange

Commission.

OFFICIAL STATEMENT CERTIFICATION

As of the date hereof this Official Statement is true to the best of my knowledge, complete and

correct in all material respects, and does not include any untrue statement of a material fact or omit to state

a material fact necessary in order to make the statements made herein, in light of the circumstances under

which they are made, not misleading.

The preparation of this Official Statement and its distribution has been authorized by the District.

The Official Statement is hereby duly approved by the District as of the date on the cover page hereof.


/s/

President, Board of Education

/s/

Secretary, Board of Education

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BORROWING CAPACITY

2016 Final Limitation (6% x $579,238,305*) $34,754,298

Less: Outstanding Direct General Obligation School Building Bonds (1,420,000)

Less: 2017 Bonds (5,000,000)**

Unused Borrowing Capacity $28,334,298

*Source: New Mexico Public Education Department.

**Preliminary, subject to change.


16

FINANCIAL INFORMATION

Actual and Assessed Valuations

2016 Estimated Actual Valuation $1,737,714,915 (1) 2016 Final Assessed Valuation $579,238,305 (2)

Outstanding Direct Debt $1,420,000

Plus: 2017 Bonds 5,000,000*

Total Direct Debt $6,420,000

Overlapping G.O. Bonded Indebtedness

Taxing Body

2016 Final

Assessed Valuation

Bonded Debt

Percentage

Applicable

Net Amount

State of New Mexico $56,608,163,615 $326,755,000 1.02% $3,343,493

Grant County 841,061,500 2,845,000 68.87% 1,959,349

Town of Silver City 207,101,984 - 0 - 100.00% - 0 -

Total Overlapping Debt $5,302,842

Total Direct and Overlapping Debt $11,722,842

Direct and Overlapping G.O. Bond Debt Ratios

Direct Debt to Assessed Value 1.11%

Direct and Overlapping Debt to Assessed Value 2.02%

Direct Debt to Actual Valuation 0.37%

Direct and Overlapping Debt to Actual Valuation 0.67%

Per Capita Direct Debt (3) $301

Per Capita Direct and Overlapping Debt $549

Per Capita Assessed Valuation $27,139

Per Capita Actual Valuation $81,418

(1) Estimated Actual Valuation is calculated by multiplying estimated assessed value times three plus

estimated exemptions.

(2) New Mexico assessed values represent 33-1/3% (the maximum assessment ratio permitted by the New

Mexico Constitution) of the actual property value after deduction of certain exemptions. Property tax levies

are based upon the certified assessed valuation.

(3) Estimated District population is 21,343 (Source: Statistical Atlas).


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DEBT LIMITATIONS

Article IX, Section 11 of the New Mexico Constitution and NMSA 1978, Section 22-18-1, as

amended, limit the power of the District to incur general obligation debt extending beyond the fiscal year

(e.g., by issuing additional bonds) in three ways:

1. The District can only incur such debt for the purpose of erecting, remodeling, making additions to

and furnishing school buildings, or purchasing or improving school grounds, and purchasing

computer software and hardware for student use in public schools, providing matching funds for

capital outlay projects funded pursuant to the Public School Capital Outlay Act, or any combination

of these purposes, and to pay the cost of issuance of the bonds, and to reimburse the District for

expenditures made for the foregoing purposes, as well as to pay all legal, financial and other

necessary costs connected with the sale and issuance of the Bonds.

2. The District must submit any proposition to create such a debt to a vote of the qualified electors of

the District, and a majority of those voting must vote in favor of creating the debt.

3. The total direct general obligation indebtedness of the District may not exceed 6% of the assessed

valuation of the taxable property within the District, as shown by the last preceding general

assessment.

ANALYSIS OF ASSESSED VALUATION

Assessed Valuation of property within the District is calculated as follows: of the total estimated

actual valuation of all taxable property in the District, 33-1/3% is legally subject to ad valorem taxes. After

deduction of certain personal exemptions, the certified 2016 final assessed valuation is $579,238,305. The

actual value of personal property within the District is determined by the Grant County Assessor, and is

divided into Residential, Non-Residential and Oil, Gas and Copper categories. The actual value of

corporate property within the District is determined by the New Mexico State Property Tax Department.

The analysis of the District's Assessed Valuation for the past five years is as follows:

Tax Year Residential Non-Residential Oil, Gas & Copper Total

2016 $337,050,712 $174,234,661 $67,952,932 $579,238,305

2015 333,397,250 172,973,963 76,185,210 582,556,423

2014 331,526,666 174,130,023 77,376,444 583,033,133

2013 322,005,607 177,119,853 74,000,400 573,125,860

2012 312,203,906 171,535,094 66,325,797 550,064,797

Source: New Mexico Public Education Department.

Reassessment

New Mexico has a state-wide property reassessment program. The program's objective is to keep

property values close to their market values so that there will be a high correlation between the value of a

property and its share of the tax burden. The first reassessment under this present program was in 1986,

and such reassessments continue to occur biannually in the even numbered years.

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Comparison of Assessed Value

Tax Year Grant County District Assessed Value

2016 $841,061,500 $579,238,305 2015 822,204,992 582,556,423 2014 791,414,221 583,033,133 2013 748,601,307 573,125,860 2012 702,741,153 550,064,797

Source: New Mexico Public Education Department and New Mexico Department of Finance and Administration.

Assessed Valuation of the Largest Centrally Assessed Taxpayers in the District

Taxpayer

2016

Assessed Valuation

Union Pacific $15,226,113

PNM Electric 5,792,922

El Paso Natural Gas 4,714,837

NM Gas Company 2,957,773

SFFP 2,688,435

Western Telephone 1,842,199

QWEST 1,325,255

Level 3 Communication 1,324,049

WNM Communication Corp. 1,007,874

Lordsburg Minerals 1,060,256

Source: New Mexico Department of Taxation and Revenue.

TAX RATES

Yield Control

NMSA 1978, Section 7-37-7.1 limits the allowable increase in property taxes from the preceding

year. Specifically, no rate shall be set or assessment imposed which will produce current tax revenues in

excess of the prior year's tax revenues, plus a percent that is determined by a growth control factor. The

growth control factor is the sum of (1) the growth in the assessed valuation due to net new additions to the

property tax rolls, expressed as a percent of the prior year's assessed ("G"), and (2) the percentage change, not

in excess of 5%, in the annual business indicator index between the prior calendar year and the year next

preceding the prior calendar year ("I"). The resulting yield control equation is:

Current tax revenues = prior tax revenues X (G + I)

Where:

G is never less than 100%, and

I is never less than 0% nor more than 5%.

The annual business indicator index is defined as the "annual implicit price deflator index for state

and local government purchases of goods and services, as published in the United States Department of

Commerce monthly publication entitled 'Summary of Current Business' or any successor publication for the

calendar year." The yield control formula applies to both residential and non-residential property, but the

calculations for each property class are made separately. In addition, the yield control formula applies to any

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authorized operating levy but not to any debt service levy. To the extent that the reassessment program, as

discussed under "Reassessment" above, increased property values, the yield control formula operated to limit

the growth in tax revenues resulting solely from reassessment, while not directly limiting the increase in tax

revenues due to net new additions to the property tax rolls.

TAX DATA

Article VIII, Section 2 of the New Mexico Constitution provides that the total ad valorem tax levied

by all overlapping units on taxable property within the boundaries of the District (i.e., the State of New Mexico

and Grant County) shall not exceed the limitation of $20.00 per $1,000 of assessed valuation unless a majority

of the voting qualified electors of the taxing district approve and authorize the additional levy. Such limitation

does not apply in the case of special levies on special classes of property and levies for public debt, such as

the levies required to pay this issue. The following tables summarize the tax rates in the District:

SILVER CONSOLIDATED SCHOOL DISTRICT NO. 1 Tax Rate Per $1,000 of Assessed Valuation

Grant County

Capital Building Tax Assessed Operating Debt Improvement Improvement Year Valuation Levy Service Levy Levy Levy Total

2016 $579,238,305 Residential 0.262 2.592 1.995 1.496 6.345

Non-Residential 0.397 2.592 2.000 1.500 6.489

2015 $582,556,423 Residential 0.262 2.507 2.000 1.500 6.269

Non-Residential 0.395 2.507 2.000 1.500 6.402

2014 $583,033,133 Residential 0.259 2.498 1.981 1.486 6.223

Non-Residential 0.386 2.498 2.000 1.500 6.384

2013 $573,125,860 Residential 0.261 2.691 2.000 1.500 6.452

Non-Residential 0.374 2.691 2.000 1.500 6.565

2012 $550,064,797 Residential 0.260 2.739 1.961 1.500 6.460

Non-Residential 0.362 2.739 2.000 1.500 6.601

Source: New Mexico Department of Finance and Administration.

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SILVER CONSOLIDATED SCHOOL DISTRICT TAX RATES - TOTAL

District Tax Rates – Total

2012 2013 2014 2015 2016

R* NR** R* NR** R* NR** R* NR** R* NR**

State of New Mexico 1.360 1.360 1.360 1.360 1.360 1.360 1.360 1.360 1.360 1.360

Grant County 7.794 13.360 7.504 13.044 7.414 13.019 7.472 12.988 7.452 12.988

Town of Silver City 1.398 2.553 2.728 3.887 2.647 2.924 2.675 3.063 2.661 3.104

Silver Schools 6.460 6.601 6.452 6.565 6.223 6.384 6.269 6.402 6.345 6.489

Historical Summary of Tax Rates for Bonds

2012 2013 2014 2015 2016

R* NR** R* NR** R* NR** R* NR** R* NR**

State of New Mexico 1.360 1.360 1.360 1.360 1.360 1.360 1.360 1.360 1.360 1.360

Grant County 1.510 1.510 1.194 1.194 1.169 1.169 1.138 1.138 1.138 1.138

Town of Silver City 0.328 0.328 0.662 0.662 0.000 0.000 0.000 0.000 0.000 0.000

Silver Schools 2.739 2.739 2.691 2.691 2.498 2.498 2.507 2.507 2.592 2.592

*Residential

**Non-Residential

Source: State of New Mexico Department of Finance and Administration.

Method of Tax Collection

Current taxes for all units of government are collected by the Grant County Treasurer and distributed

monthly to the various political subdivisions to which they are due.

Property taxes are payable to the Grant County Treasurer in two equal annual installments. The first

annual installment is due on November 10 and becomes delinquent on December 10. The second annual

installment is due on April 10 and becomes delinquent on May 10. Pursuant to NMSA 1978, Section 7-38-

46, property taxes are delinquent 30 days after the date on which they are due.

Interest On Delinquent Taxes

Pursuant to NMSA 1978, Section 7-38-49, if property taxes are not paid for any reason within thirty

(30) days after the date they are due, interest on the unpaid taxes shall accrue from the thirtieth day after

they are due until the date they are paid. Interest accrues at the rate of one percent (1%) per month or any

fraction of a month.

Delinquent Taxes Penalty

Pursuant to NMSA 1978, Section 7-38-50, if property taxes become delinquent, a penalty of one

percent (1%) of the delinquent tax for each month or any portion of a month they remain unpaid shall be

imposed, but the total penalty shall not exceed five percent (5%) of the delinquent taxes. The minimum

penalty imposed is $5.00. A county can suspend application of the minimum penalty requirement for any

tax year.

21

If property taxes become delinquent because of an intent to defraud by the property owner, fifty

percent (50%) of the property taxes due or fifty dollars ($50.00), whichever is greater, shall be added as a

penalty.

Remedies Available for Non-Payment of Taxes

Pursuant to NMSA 1978, Section 7-38-47, property taxes are the personal obligation of the person

owning the property on the date on which the property was subject to valuation for property taxation

purposes. A personal judgment may be rendered against the taxpayer for payment of taxes that are

delinquent, together with any penalty and interest on the delinquent taxes. Pursuant to NMSA 1978, Section

7-38-48, taxes on real property are a lien against the real property. Pursuant to NMSA 1978, Section 7-

38-65, delinquent taxes on real property may be collected by selling the real property on which taxes are

delinquent.

Pursuant to NMSA 1978, Section 7-38-53, delinquent property taxes on personal property may be

collected by asserting a claim against the owners of the personal property for which taxes are delinquent.

Tax Collections on Local and Centrally Assessed Property in Grant County

(as of March 2017)

Tax Year Net Taxes Charged to Treasurer Taxes Collected Percentage Collected

2016 $11,738,031 $7,547,496 64.30%*

2015 11,628,801 10,890,773 93.65%

2014 11,643,462 11,010,512 94.56%

2013 11,829,976 11,182,752 94.53%

2012 11,555,982 11,117,690 96.21%

2011 12,755,093 12,318,138 96.57%

2010 11,707,505 11,312,882 96.63%

2009 9,856,429 9,487,372 96.26%

2008 9,074,341 9,049,058 99.72%

2007 9,211,879 9,195,912 99.83%

*Partial collections through March 2017.

Source: Grant County Treasurer.

22

OUTSTANDING GENERAL OBLIGATION BONDS

Series Original Issue Amount Final Maturity Principal Outstanding

2005 $9,000,000 2017 $1,420,000

Authorized but Unissued General Obligation Bonds

The District had a General Obligation Bond Election on February 7, 2017 for $20,000,000. After

this 2017 issue, the District will have $15,000,000* in authorized but unissued bonds.



23


General

The District is located in the southwestern part of the state, 131 miles northwest of El Paso, Texas and

238 miles southwest of Albuquerque, New Mexico. The District covers an area of about 2,970 square miles,

which encompasses the western and southern portions of Grant County. The District includes nine separate

schools with a current enrollment of 2,759 pupils. The total population of the District is estimated to be 21,343

(as of April 2015).

Board of Education

The Board, subject to regulations and the authority of the Secretary of Public Education and the Public

Education Department of the State of New Mexico, supervises and controls all public schools and property

within the District. The Board develops educational policies for the District, employs a superintendent of

schools, fixes the salary of the superintendent of schools, has the capacity to sue and be sued, contracts, leases,

purchases and sells for the District, acquires and disposes of property, and adopts regulations pertaining to the

administration of all powers or duties of the Board. Members serve without compensation for four-year terms

of office in non-partisan elections held every two years on the first Tuesday in February. The current members

are:

Mike McMillan, President

Frances Vasquez, Vice President

Ashley Montenegro, Secretary

Patrick Cohn, Member

Justin Wecks, Member

Administrative Staff

The Superintendent of Schools (“Superintendent”) is selected by and is under contract with the Board.

All other employees are selected by the Superintendent. The current Superintendent is Audie Brown.

Enrollment History

The District operates five elementary schools, two middle schools, and three high schools, all of

which are accredited by the North Central Association of Colleges and Secondary Schools as well as the

Public Education Department of the State of New Mexico. An enrollment history for the District follows:

Enrollment History

Year Enrollment

2016-17 2,759

2015-16 2,888

2014-15 2,920

2013-14 3,037

2012-13 3,077

Source: New Mexico Public Education Department, 40-Day Count.

24

Finances of the Educational Program

The basic educational programs of the District are funded in major part by the State of New Mexico

Equalization Guarantee, a local ad valorem tax collection, and an amount provided by the State for pupil

transportation and school textbooks.

The method of distribution of State funds to local school districts guarantees that each school district

will receive 100% of the calculated program cost. Program cost is funded by the State of New Mexico on a

partnership basis with local and federal governments. All sums distributed by the State to the District are

appropriated from the State's general fund. The State allocation to each district is determined by deducting

from each district's program cost 95% of designated local revenues and 95% of designated federal revenues.

The remainder is "State Equalization Guarantee" to insure that each district receives 100% of its program cost.

In addition, the Legislature makes separate 100% appropriations for public school transportation and school

textbooks on a dollar per student value. The State Equalization Guarantee does not apply to debt service

funds.

Prior to June 1 of each year, the Board approves the proposed operating budget of the fiscal year

commencing the following July 1. The operating budget includes expenditures and the means of financing

them. Budgets for all funds are approved by the State Public Education Department, School Budgeting

Division.

All budget increases, decreases and transfers must be approved by the Public School Finance

Division. Expenditures may not be made out of a particular fund in excess of those budgeted.

General Fund

The General Fund is used to account for resources of the operational fund, student activity funds, and

other resources not accounted for in another fund. The sources of revenue for the District's General Fund are:

Local Revenues - Local revenues are a minor source of revenue to the District composed, in part, of

a property tax annually levied on and against all of the taxable property within the District for operational

purposes. The levy is limited by State law to a rate of 50 cents for each $1,000 of net taxable value of taxable

property. Other sources of local revenues include interest income earned on the District's investments, rentals,

and sale of property. In the fiscal year 2015-16, the District’s General Fund received $403,303 from local

sources.

Federal Revenues - Another source of annual revenue for the District's General Fund is derived from

indirect costs of direct federal grant funds related to vocational, special education, and various other programs,

and P.L. 874 federal impact moneys paid to the District in lieu of taxes on federal land located in the District.

In fiscal year 2015-16, the District’s General Fund received $289,060 in federal revenues.

State Revenues - The District's largest source of annual revenue is derived from the State Equalization

Guarantee payments described above. During fiscal year 2015-16, the District’s General Fund received

$24,569,278 from state sources. Such payments represented approximately 97% of actual fiscal year 2015-

16 General Fund revenues.

Other Funds maintained by the District in addition to the General Fund include:

Special Revenue Funds - Special revenue funds are used to account for the proceeds of specific

revenue sources that are legally restricted to expenditures for specified purposes. A list of specific special

revenue funds is contained in the June 30, 2016 audited financial statements.

25

Debt Service Funds - Debt service funds are used to account for accumulation of resources for, and

the payment of, general long-term debt principal, interest and related costs. Grant County remits taxes

collected to the District as one lump sum and does not break down such amount as to principal or interest in

accordance with instructions from the State Department. Since the County cannot provide a breakdown at the

end of the fiscal year, the principal and interest funds are not combined and are shown under the single

heading, “Debt Service Funds”.

Capital Projects Funds - Capital projects funds are used to account for financial resources to be used

for the acquisition or construction of major capital facilities.

The Capital Projects Fund, which consists of the General Building Fund, accounts for the resources

and major costs of capital improvements in the District, such as erecting, remodeling, making additions to and

furnishing school buildings and purchasing and improving school grounds. Revenue is provided through

general obligation school bonds and earnings on investments.

Fiduciary Funds - Trust & Agency - Trust and agency funds are used to account for assets held by

the District in a trustee capacity or as an agent for individuals, private organizations, other governments, and/or

other funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement

of results of operations. Non-expendable trust funds represent funds whose earnings may be expended. Non-

expendable trusts are accounted for in essentially the same manner as governmental funds.

Following is a Summary Statement of Revenues, Expenditures, and Fund Balances for Fiscal Years

2012 through 2016. A complete copy of the audited annual report can be obtained from the District upon

written request and after payment of a charge for copying.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

26

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

(GENERAL FUND)

2016 2015 2014 2013 2012

REVENUES: Property Taxes $151,258 $168,630 $173,954 $167,697 $156,531

Fees and charges 233,216 192,899 194,153 179,680 196,480

State aid 24,569,278 24,839,847 24,420,914 23,512,881 22,474,693

Federal aid 289,060 286,702 306,907 302,958 371,637

Investment income 5,411 7,021 1,119 1,500 3,093

Insurance 10,314 - - - -

Miscellaneous 3,104 346 13,197 7,087 56,905

Total Revenues $25,261,641 $25,495,445 $25,110,244 $24,171,803 $23,259,339

EXPENDITURES:

Current: Instruction $14,096,208 $14,340,138 $14,465,442 $14,343,022 13,863,018

Support services - students 2,955,941 3,176,756 3,009,333 3,081,938 2,725,429

Support services - instruction 719,534 757,683 723,360 537,405 538,891

General administration 674,028 486,594 463,912 471,967 407,943

School administration 1,748,591 1,786,692 1,783,148 1,644,470 1,574,588

Central services 554,172 685,148 707,353 651,175 706,265

Operation of plant 2,847,524 2,969,452 3,030,992 2,877,407 2,767,195

Food services - - - - -

Transportation 1,238,436 1,188,248 1,155,595 982,047 955,867

Other support services 83,344 75,974 57,637 31,038 102,690

Debt Service: Debt service - principal - - - - -

Debt service - interest - - - - -

Capital outlay - - 5,320 - -

Total Expenditures $24,917,778 $25,466,685 $25,402,092 $24,620,469 $23,641,886

Net changes in fund balances $343,863 $28,760 ($291,848) ($448,666) ($382,547)

Fund balances - beginning of year 410,401 381,641 673,489 1,122,155 1,504,702

Fund balances - end of year $754,264 $410,401 $381,641 $673,489 $1,122,155

Source: The figures for fiscal years ended June 30, 2012 through 2016 have been excerpted from the

District's audits. Such figures are excerpts and do not purport to be complete. The figures are presented for

information purposes only.

APPENDIX A

GENERAL INFORMATION – GRANT COUNTY

Population

U.S. Census Grant County State of New Mexico

2016 28,280 2,081,015 2015 28,564 2,080,328 2014 28,988 2,083,024 2013 29,241 2,085,193 2012 29,320 2,083,784

Source: U.S. Census Bureau, American FactFinder.

Percent of Population

Age Grant County New Mexico

Under 5 years 6.0% 6.6%

5-9 5.9% 6.8%

10-14 6.2% 6.8%

15-19 6.3% 6.9%

20-24 5.2% 7.2%

25-34 9.8% 13.3%

35-44 9.6% 11.8%

45-54 13.4% 13.0%

55-59 8.1% 6.7%

60-64 8.2% 6.1%

65-74 11.9% 8.6%

75-84 6.9% 4.5%

85 and older 2.5% 1.7%

Source: U.S. Census Bureau, American FactFinder.

Per Capita Personal Income

Year

Grant

County

New Mexico

2015 23,011 24,012

2014 23,411 23,948

2013 22,755 23,763

2012 22,415 23,749

2011 21,726 23,537

Source: U.S. Census Bureau, 2015 American Community Survey.

The following two tables show median household buying income and percent of households by effective

buying income groups for 2015 and earlier years.

Median Household Buying Income

Year Grant County State of New Mexico

2015 38,311 44,963

2014 38,923 44,968

2013 37,899 44,927

2012 37,525 44,886

2011 36,925 44,631


Percent of Households by Effective Buying Income Groups

Effective Buying

Income Category

Grant County

Households

Percent of New Mexico

Households

Under $10,000 11.0% 9.6%

10,000-14,999 6.3% 6.5%

15,000-24,999 16.6% 12.8%

25,000-34,999 11.9% 11.3%

35,000-49,999 16.9% 14.2%

50,000-74,999 15.5% 16.9%

75,000-99,999 10.3% 11.4%

100,000 – 149,999 7.4% 10.6%

150,000-199,999 2.4% 3.8%

200,000 or more 1.5% 2.9%


Non-Agricultural Employment in Grant County

Industry 2012 2013 2014 2015 Q3 2016

Agriculture, forestry, fishing & hunting 21 20 20 31 37

Mining * 1,643 * * *

Utilities 60 59 61 58 60

Construction 438 387 347 326 369

Manufacturing 123 114 105 98 111

Wholesale trade 92 93 68 69 69

Retail trade 1,120 1,103 1,095 1,113 1,120

Transportation & warehousing 76 66 59 59 61

Information 93 78 77 76 83

Finance & insurance 176 174 172 174 169

Real estate & rental & leasing 98 113 102 100 81

Professional & technical services 152 143 126 128 109

Management of companies & enterprises * 133 * * *

Administrative & waste services 98 119 121 144 152

Educational services 51 46 59 56 58

Health care & social assistance 912 904 902 940 933

Arts, entertainment & recreation 36 42 39 49 35

Accommodation & food services 887 842 895 888 883

Other services, except public admin 218 199 206 193 199

Non-classifiable 0 0 0 0 0

Total Private 6,356 6,278 6,208 6,245 6,159

Total Government 3,295 3,215 3,133 3,039 2,722

Federal 217 205 206 202 224

State 1,090 1,140 1,116 1,067 1,032

Local 1,988 1,870 1,811 1,770 1,466

Total, All Industries 9,651 9,493 9,341 9,284 8,881

*Non-Disclosure – sum of industries may not add to total due to Non-Disclosure

Source: State of New Mexico Department of Labor.

Major Employers

Some of the larger employers in the surrounding area are described below. No independent investigation of

the stability or financial condition of the listed employers has been conducted and no representation can be

made that these employers will maintain their status as major employers in the surrounding area.

Employer Number of Employees

Freeport McMoran Copper & Gold 1,400

Western New Mexico University 722

Gila Regional Medical Center 700

Silver Consolidated School District 418

Cobre Consolidated School District 219

Grant County 250

US Forest Service 200

W&N Enterprises 200

James Hamilton Construction 62

Source: Gila Economic Development Alliance.

Employment/Unemployment

Annual Average Grant County State of New Mexico

2017 Civilian Labor Force (Feb) 12,377 932,570

Employment (Feb) 11,528 869,392

Unemployment (Feb) 849 63,178

Unemployment Rate (Feb) 6.86% 6.78%

2016 Civilian Labor Force 12,463 928,823

Employment 11,674 866,374

Unemployment 789 62,449

Unemployment Rate 6.33% 6.72%













Source: US Department of Labor, Bureau of Labor Statistics.

APPENDIX B

FORM OF OPINION OF BOND COUNSEL

2503963.1

RODEY, DICKASON, SLOAN, AKIN & ROBB, P. A.

BRUCE HALL JOHN P. SALAZAR JOHN P. BURTON CATHERINE T. GOLDBERG EDWARD RICCO W. MARK MOWERY ELLEN T. SKRAK CHARLES K. PURCELL ANDREW G. SCHULTZ SCOTT D. GORDON NELSON FRANSE THERESA W. PARRISH PAUL R. KOLLER CHARLES J. VIGIL THOMAS L. STAHL DAVID W. BUNTING LESLIE McCARTHY APODACA JEFFREY M. CROASDELL SUNNY J. NIXON JEFFREY L. LOWRY R. TRACY SPROULS DONALD B. MONNHEIMER ALAN HALL SETH L. SPARKS LISA CHAVEZ ORTEGA JOCELYN C. DRENNAN MICHAEL J. BRESCIA

AARON C. VIETS KURT B. GILBERT RICK BEITLER JUSTIN A. HORWITZ SANDRA L. BEERLE VALERIE REIGHARD DENTON BRENDA M. SAIZ BRIAN P. BRACK TODD E. RINNER CHARLES R. HUGHSON JOSE R. BLANTON MICHAEL E. KAEMPER MARGOT A. HEFLICK KRYSTLE A. THOMAS GLENN A. BEARD DENISE M. CHANEZ PERRY E. BENDICKSEN III DAVID P. BUCHHOLTZ CRISTINA ADAMS TYLER M. CUFF SHANNON M. SHERRELL MELANIE B. STAMBAUGH JESSICA R. TERRAZAS STEPHANIE L. LATIMER LUIS G. CARRASCO JUAN M. MARQUEZ TAYLOR C. ZANGARA

ATTORNEYS AT LAW

201 THIRD STREET NW, SUITE 2200

ALBUQUERQUE, NEW MEXICO 87102

P.O. BOX 1888

ALBUQUERQUE, NEW MEXICO 87103

WWW.RODEY.COM

TELEPHONE (505) 765-5900

FACSIMILE (505) 768-7395

June 30, 2017

OF COUNSEL ROBERT M. ST. JOHN

MARK K. ADAMS RICHARD C. MINZNER JO SAXTON BRAYER DEWITT M. MORGAN

PATRICK M. SHAY CHARLES A. SEIBERT III

CYNTHIA A. LOEHR JOHN N. PATTERSON DEBORA E. RAMIREZ

_____

BERNARD S. RODEY (1856-1927) PEARCE C. RODEY (1889-1958) DON L. DICKASON (1906-1999) WILLIAM A. SLOAN (1910-1993) JACKSON G. AKIN (1919-2010)

JOHN D. ROBB (1924-2014)

_____

SANTA FE OFFICE

119 EAST MARCY STREET, SUITE 200

SANTA FE, NEW MEXICO 87501-2046

P.O. BOX 1357

SANTA FE, NEW MEXICO 87504-1357

TELEPHONE (505) 954-3900

FACSIMILE (505) 954-3942

_____

WRITER’S DIRECT NUMBER

Silver Consolidated School

District No. 1

$5,000,000

Silver Consolidated School

District No. 1

General Obligation School

Building Bonds

Series 2017

Ladies and Gentlemen:

We have acted as bond counsel to the Silver Consolidated School District No. 1 (the “District”) in

connection with the issuance of its $5,000,000 General Obligation School Building Bonds, Series

2017 (the “Bonds”), dated June 30, 2017. The Bonds are issued pursuant to the Constitution and

laws of the State of New Mexico (the “State”) and the Authorizing Resolution adopted by the

District’s Board of Education on May 25, 2017, as supplemented by the Sale Resolution adopted

by the District’s Board of Education on June 20, 2017.

In such capacity, we have examined the transcript of proceedings (the “Transcript”) relating to the

issuance of the Bonds and have also examined the law under authority of which the Bonds are

issued. Based on our examination, we are of the opinion that, under the law existing on the date

of this opinion, subject to the provisions of federal bankruptcy law and other laws affecting

creditors’ rights and further subject to exercise of judicial discretion in accordance with general

principles of equity:

1. The Bonds constitute valid and binding general obligations of the District and are

to be paid from the proceeds of the levy of ad valorem taxes on all taxable property within the

District without limitation as to rate or amount.

2. Assuming continuing compliance by the District with the requirements of the

Internal Revenue Code of 1986, as amended (the “Code”), and with the covenants contained in the

RODEY, DICKASON, SLOAN, AKIN & ROBB, P.A.

June 30, 2017

Page 2

Transcript regarding the use, expenditure and investment of bond proceeds, interest on the Bonds

is excludable from the gross income of owners of the Bonds for purposes of federal income

taxation. Interest on the Bonds is not treated as an item of tax preference for purposes of the

alternative minimum tax imposed on individuals and corporations. However, interest on the Bonds

is included as an adjustment in calculating corporate alternative minimum taxable income and may

therefore affect a corporation’s alternative minimum tax. Failure of the District to comply with its

covenants and with the requirements of the Code may cause interest on the Bonds to become

includable in gross income for federal income tax purposes retroactive to their date of issuance.

3. The Bonds and the income from the Bonds are exempt from all taxation by the State

or any political subdivision of the State.

4. The Bonds are qualified tax-exempt obligations within the meaning of Section

265(b)(3) of the Code.

Other than as described herein, we have not addressed nor are we opining on the tax

consequences to any person of the investment in, or the receipt of interest on, the Bonds.

We express no opinion as of any date subsequent hereto, and our engagement with respect

to the Bonds has concluded with their issuance. We disclaim any obligation to update this opinion.

The opinions expressed herein represent our legal judgment based upon existing law,

legislation, regulations and rulings as of the date of issuance and delivery of the Bonds that we

deem relevant to render such opinions and are not a guarantee of a result. We express no opinion

with respect to any pending legislation.

We are passing upon only those matters set forth in this opinion and are not passing upon

the accuracy or completeness of any statement made in connection with any sale of the Bonds.

Very truly yours,

APPENDIX C

EXCERPT OF DISTRICT’S 2016 AUDITED FINANCIAL REPORT

The information contained in this Appendix has been reproduced from the Silver Consolidated School District

Annual Financial Report (the “Report”) for the Fiscal Year Ended June 30, 2016, as prepared by Harshwal &

Company LLP, Albuquerque, New Mexico.

THE INFORMATION PRESENTED REPRESENTS ONLY A PART OF THE REPORT AND DOES

NOT PURPORT TO BE A COMPLETE STATEMENT OF THE DISTRICT’S FINANCIAL

CONDITION. REFERENCE IS MADE TO THE COMPLETE REPORT FOR ADDITIONAL

INFORMATION.

INDEPENDENT AUDITORS’ REPORT

Mr. Tim Keller, State AuditorAnd Board of EducationSilver Consolidated School District No. 1Silver City, New Mexico

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, each major fund,the aggregate remaining fund information, and the budgetary comparisons for the general fund and majorspecial revenue funds of Silver Consolidated School District No. 1 (the "District"), as of and for the yearended June 30, 2016, and the related notes to the financial statements which collectively comprise theDistrict’s basic financial statements as listed in the table of contents. We also have audited the financialstatements of each of the District’s nonmajor governmental funds and the budgetary comparisons for themajor capital project funds, the debt service fund, and all nonmajor funds presented as supplementaryinformation, as defined by the Government Accounting Standards Board, in the accompanying combiningand individual fund financial statements as of and for the year ended June 30, 2016, as listed in the tableof contents.

Management’s Responsibility for the Financial Statements

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

Auditor’s Responsibility

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

3________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

ALBUQUERQUE

6739 Academy Road NE Suite 130 Albuquerque NM 87109

www.harshwal.com |T 505.814.1201 | F 505.214.5733

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud or error.In making those risk assessments, the auditor considers internal control relevant to the entity's preparationand fair presentation of the financial statements in order to design audit procedures that are appropriate inthe circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity'sinternal control. Accordingly, we express no such opinion. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of significant accounting estimatesmade by management, as well as evaluating the overall presentation of the financial statements.

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

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, therespective financial position of the governmental activities, each major fund, and the aggregate remainingfund information of the District, as of June 30, 2016, and the respective changes in financial position, andthe respective budgetary comparisons for the general fund and major special revenue funds for the yearthen ended in accordance with accounting principles generally accepted in the United States of America.In addition, in our opinion, the financial statements referred to above present fairly, in all materialrespects, the respective financial position of each nonmajor governmental fund of the District as of June30, 2016, and the respective changes in financial position and the respective budgetary comparisons forthe major capital project funds, debt service funds and all nonmajor funds for the year then ended inaccordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require the Schedule of theProportionate Share of the Net Pension Liability on page 149, the Schedule of Contributions on page150 and the notes to the required supplementary information on page 150 be presented to supplement thebasic financial statements. Such information, although not a part of the basic financial statements, isrequired by the Governmental Accounting Standards Board who considers it to be an essential part offinancial reporting for placing the basic financial statements in an appropriate operational, economic orhistorical context. We have applied certain limited procedures to the required supplementary informationin accordance with the auditing standards generally accepted in the United States of America, whichconsisted of inquiries of management about the methods of preparing the information and comparing theinformation for consistency with management’s responses to our inquiries, the basic financial statementsand other knowledge we obtained during our audit of the basic financial statements. We do not express anopinion or provide any assurance on the information because the limited procedures do not provide uswith sufficient evidence to express an opinion or provide any assurance.

Management has omitted the MD&A which is required to be presented to supplement the basic financialstatements. Such missing information, although not a part of the basic financial statements is required bythe Government Accounting Standards Board, who considers it to be an essential part of financialreporting for placing the basic financial statements in an appropriate operational, economic, or historicalcontext. Our opinion on the basic financial statements is not affected by this missing information.

4

Other Information

Our audit was conducted for the purpose of forming opinions on the District's basic financial statements,the combining, and individual fund financial statements, and the budgetary comparisons. The schedule ofexpenditures of federal awards as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200,Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, andthe other schedules required by section 2.2.2.NMAC are presented for purposes of additional analysis andare not a required part of the basic financial statements.

The Schedule of Expenditures of federal awards and other schedules required by Section 2.2.2 NMAC arethe responsibility of management and were derived from and relate directly to the underlying accountingand other records used to prepare the basic financial statements. Such information has been subjected tothe auditing procedures applied in the audit of the basic financial statements and certain additionalprocedures, including comparing and reconciling such information directly to the underlying accountingand other records used to prepare the basic financial statements or to the basic financial statementsthemselves, and other additional procedures in accordance with auditing standards generally accepted inthe United States of America. In our opinion, the Schedule of Expenditures and other schedules requiredby Section 2.2.2 NMAC are fairly stated in all material respects in relation to the basic financialstatements as a whole.

The schedule of vendor information has not been subjected to the auditing procedures applied in the auditof the basic financial statements, and accordingly, we do not express an opinion or provide any assuranceon it.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated November 04,2016 on our consideration of the District's internal control over financial reporting and on our tests of itscompliance 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 financialreporting and compliance and the results of that testing, and not to provide an opinion on the internalcontrol over financial reporting or on compliance. That report is an integral part of an audit performed inaccordance with Government Auditing Standards in considering the District's internal control overfinancial reporting and compliance.

Harshwal & Company LLPCertified Public Accountants

Albuquerque, New MexicoNovember 04, 2016

5

BASIC FINANCIAL STATEMENT

GOVERNMENT - WIDE FINANCIAL STATEMENTS

STATE OF NEW MEXICOSILVER CONSOLIDATED SCHOOL DISTRICT NO. 1

STATEMENT OF NET POSITIONJUNE 30, 2016

Governmentalactivities

ASSETSCurrent assets:

Cash and cash equivalents $ 3,371,642Property taxes receivables 1,066,938Due from other governments 1,029,526Inventory 15,105

Total current assets 5,483,211

Noncurrent assets:Capital assets: 58,789,626Less: accumulated depreciation (38,804,570)

Total noncurrent assets 19,985,056

Total assets 25,468,267

DEFERRED OUTFLOWS OF RESOURCESChanges of assumptions 1,355,730Change in proportion 108,572Employer contributions subsequent to the measurement date 2,357,009

Total deferred outflows of resources 3,821,311

LIABILITIESCurrent liabilities:

Accounts payable 145,396Bonds payable 1,370,000Accrued interest payable 44,767

Total current liabilities 1,560,163

Noncurrent liabilities:Bonds payable 1,420,000Compensated absences 40,424Net pension liability 39,416,109

Total noncurrent liabilities 40,876,533

Total liabilities 42,436,696

DEFERRED INFLOWS OF RESOURCESUnavailable revenue 73,663Actuarial experience 730,739Investment experience 177,422Change in proportion after reallocation of inactive employer 448,400

Total deferred inflows of resources 1,430,224

The accompanying notes are an integral part of these financial statements8


STATEMENT OF NET POSITIONJUNE 30, 2016

Governmentalactivities

NET POSITIONNet Investment in capital assets 17,195,056Restricted for:

Capital projects 1,289,806Debt service 1,516,088Other purposes 753,063

Unrestricted (35,331,355)

Total net position (14,577,342)

Total liabilities, deferred inflows of resources, and net position $ 29,289,578



STATEMENT OF ACTIVITIESFOR THE YEAR ENDED JUNE 30, 2016

Program revenues

Functions/Programs ExpensesCharges for

service

Operatinggrants and

contributions

Net (expenses)revenues andchanges in net

positionGovernmental activities:

Current:Instruction $ 18,022,921 $ 99,159 $ 2,650,976 $ (15,272,786)Support services-students 3,322,076 250,137 (3,071,939)Support services-instruction 988,592 12,215 (976,377)General administration 760,947 444,312 (316,635)School administration 1,748,654 (1,748,654)Central services 554,172 (554,172)Operation of plant 4,078,562 203,123 249,557 (3,625,882)Food services 1,318,549 55,948 1,121,808 (140,793)Transportation 1,238,436 1,238,408 (28)Other support services 83,344 (83,344)

Interest on long-term debt 111,525 (111,525)

Total governmental activities $ 32,227,778 $ 802,542 $ 5,523,101 (25,902,135)

General revenuesProperty taxes:

Levied for general purposes 1,082,820Levied for debt service 1,220,226Levied for capital improvements 1,154,348

State aid - formula grants 22,935,072Miscellaneous revenue 5,250Unrestricted investment earnings 5,411Insurance recovery 10,314

Total general revenues and special items 26,413,441

Change in net position 511,306

Net position - beginning of year (15,088,648)

Net position - end of year $ (14,577,342)


GOVERNMENTAL FUND FINANCIAL STATEMENTS


BALANCE SHEETGOVERNMENTAL FUNDS

JUNE 30, 2016

General Funds

11000-Operational

13000-Transportation

14000-Instructional

Materials

80000-Non -Instructional

SupportASSETS

Cash & investments $ 661,001 $ 44 $ 191,040 $ 38,851Property taxes receivable 48,274InventoryDue from other governmentsInterfund receivable

Total assets 709,275 44 191,040 38,851

LIABILITIESAccounts payable 137,649Interfund payable 536 910

Total liabilities 138,185 0 0 910

DEFERRED INFLOWS OF RESOURCESUnavailable revenue 45,851

Total deferred inflows of resources 45,851 0 0 0

FUND BALANCESNon-spendable:

InventoriesRestricted for:

EducationFood servicesSocial servicesCapital projectsDebt service

Unassigned 525,239 44 191,040 37,941

Total fund balance 525,239 44 191,040 37,941

Total liabilities, deferred inflows ofresources and fund balance $ 709,275 $ 44 $ 191,040 $ 38,851




JUNE 30, 2016

Special Revenue Funds Capital Projects Fund

24101-Title I24106-

Entitlement

31600-CapitalImprovement

HB 13331700-Senate

Bill 9ASSETS

Cash & investments $ - $ - $ 440,526 $ 809,339Property taxes receivable 486,402 204,864InventoryDue from other governments 278,568 411,428Interfund receivable

Total assets 278,568 411,428 926,928 1,014,203

LIABILITIESAccounts payableInterfund payable 278,568 411,428 11,708

Total liabilities 278,568 411,428 0 11,708

DEFERRED INFLOWS OF RESOURCESUnavailable revenue 474,701 189,851

Total deferred inflows of resources 0 0 474,701 189,851


InventoriesRestricted for:

EducationFood servicesSocial servicesCapital projects 452,227 812,644Debt service

Unassigned

Total fund balance 0 0 452,227 812,644

Total liabilities, deferred inflows ofresources and fund balance $ 278,568 $ 411,428 $ 926,928 $ 1,014,203




JUNE 30, 2016

Debt ServiceFund

41000-DebtService

Other Non-Major Funds

TotalGovernmental

FundsASSETS

Cash & investments $ 622,733 $ 608,108 $ 3,371,642Property taxes receivable 327,398 1,066,938Inventory 15,105 15,105Due from other governments 339,530 1,029,526Interfund receivable 873,237 174,173 1,047,410

Total assets 1,823,368 1,136,916 6,530,621

LIABILITIESAccounts payable 7,747 145,396Interfund payable 344,260 1,047,410

Total liabilities 0 352,007 1,192,806

DEFERRED INFLOWS OF RESOURCESUnavailable revenue 307,280 73,663 1,091,346

Total deferred inflows of resources 307,280 73,663 1,091,346


Inventories 15,105 15,105Restricted for:

Education 58,918 58,918Food services 95,235 95,235Social services 583,805 583,805Capital projects 24,935 1,289,806Debt service 1,516,088 1,516,088

Unassigned (66,752) 687,512

Total fund balance 1,516,088 711,246 4,246,469

Total liabilities, deferred inflows ofresources and fund balance $ 1,823,368 $ 1,136,916 $ 6,530,621



RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCETO NET POSITION OF GOVERNMENTAL ACTIVITIES

JUNE 30, 2016

GovernmentalFund

Amounts reported for governmental activities in the statement of Net position are differentbecause:

Fund balances - total governmental funds - $ 4,246,469

Capital assets used in governmental activities are not financial resources and, therefore,are not reported in the funds. 19,985,056

Other long-term assets are not available to pay for current period expenditures andtherefore are not reported in the funds:

Property taxes subject to the 60 day availability period 1,017,683

Long-term liabilities, including bonds payable, compensated absences, lease-purchasespayable and accrued interest payable are not due and payable in the current period andtherefore are not reported in the funds:

Bonds payable (2,790,000)Accrued interest payable (44,767)Compensated absences payable (40,424)

Deferred outflows and inflows of resources related to pensions are applicable to futureperiods and therefore, are not reported in the funds:

Deferred outflows of resources related to pension 3,821,311Deferred inflows of resources related to pension (1,356,561)

Certain liabilities, including net pension liability, are not due and payable in the currentperiod and, therefore, are not reported in the funds:

Net pension liability (39,416,109)

Net Position-Total Governmental Activities $ (14,577,342)



STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2016

General Funds

11000-Operational

13000-Transportation

14000-Instructional

Materials

80000-Non-

Instructional Support

REVENUES:Property taxes $ 151,258 $ $ $Fees and charges 30,093 203,123State aid 23,125,778 1,238,408 205,092Federal aid 289,060Investment income 5,411Insurance 10,314Miscellaneous 3,094 10

Total revenues 23,615,008 1,238,408 205,102 203,123

EXPENDITURES:Current:

Instruction 13,951,896 144,312Support services - students 2,955,941Support services - instruction 719,534General administration 674,028School administration 1,748,591Central services 554,172Operation of plant 2,639,439 208,085Food servicesTransportation 1,238,436Other support services 83,344

Debt service:Debt service - principalDebt service - interest

Capital outlay

Total expenditures 23,326,945 1,238,436 144,312 208,085

Net changes in fund balances 288,063 (28) 60,790 (4,962)

Fund balances - beginning of year 237,176 72 130,250 42,903

Fund balances- end of year $ 525,239 $ 44 $ 191,040 $ 37,941





Special Revenue FundsCapital

Projects Fund

24101-Title I24106-

Entitlement

31600-CapitalImprovement

HB 133REVENUES:

Property taxes $ $ $ 737,478Fees and chargesState aidFederal aid 786,248 764,050Investment incomeInsuranceMiscellaneous

Total revenues 786,248 764,050 737,478


Instruction 637,778 498,744Support services - students 115,999Support services - instruction 124,460 125,974General administration 24,010 23,333 7,532School administrationCentral servicesOperation of plant 240,119Food servicesTransportationOther support services

Debt service:Debt service - principalDebt service - interest

Capital outlay 376,224

Total expenditures 786,248 764,050 623,875

Net changes in fund balances 0 0 113,603

Fund balances - beginning of year 0 0 338,624

Fund balances- end of year $ 0 $ 0 $ 452,227





CapitalProjects Fund

Debt ServiceFund

31700-SenateBill 9

41000-DebtService

Other Non-Major Funds

REVENUES:Property taxes $ 936,796 $ 1,239,118 $Fees and charges 253,316 190,996 125,014State aid 249,557 193,158Federal aid 1,606,822Investment incomeInsuranceMiscellaneous 660 1,486

Total revenues 1,440,329 1,430,114 1,926,480


Instruction 458,148Support services - students 250,136Support services - instruction 18,624General administration 9,571 12,664 9,809School administration 63Central servicesOperation of plant 990,919Food services 1,318,549TransportationOther support services

Debt service:Debt service - principal 1,325,000Debt service - interest 131,953


Total expenditures 1,145,778 1,469,617 2,055,329

Net changes in fund balances 294,551 (39,503) (128,849)

Fund balances - beginning of year 518,093 1,555,591 840,095

Fund balances- end of year $ 812,644 $ 1,516,088 $ 711,246





TotalGovernmental

FundsREVENUES:

Property taxes $ 3,064,650Fees and charges 802,542State aid 25,011,993Federal aid 3,446,180Investment income 5,411Insurance 10,314Miscellaneous 5,250

Total revenues 32,346,340


Instruction 15,690,878Support services - students 3,322,076Support services - instruction 988,592General administration 760,947School administration 1,748,654Central services 554,172Operation of plant 4,078,562Food services 1,318,549Transportation 1,238,436Other support services 83,344

Debt service:Debt service - principal 1,325,000Debt service - interest 131,953


Total expenditures 31,762,675

Net changes in fund balances 583,665

Fund balances - beginning of year 3,662,804

Fund balances- end of year $ 4,246,469



RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES INFUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES

FOR THE YEAR ENDING JUNE 30, 2016

GovernmentalFund

Amounts reported for governmental activities in the statement of activities aredifferent because:

Net change in fund balances - total governmental funds $ 583,665

Governmental funds report capital outlays as expenditures. However, in theStatement of Activities, the cost of those assets is allocated over theirestimated useful lives as depreciation expense:

Capital outlay 521,512Depreciation expense (1,799,752)

Revenues in the statement of activities that do not provide current financialresources are not reported as revenues in the funds. This is the net changeduring the year:

Property taxes subject to the 60 day availability period 392,743

Repayment of debt principal is an expenditure in the governmental funds, butthe repayment reduces long-term liabilities in the Statement of Net positions:

Payment of bond principal 1,325,000

In the Statement of Activities, interest is accrued on outstanding bonds,whereas in governmental funds, an interest expenditure is reported when due.This is the net change during the year. 20,427

Some expense reported in the Statement of Activities, such as compensatedabsences, do not require the use of current financial resources and thereforeare not reported as expenditures in governmental funds. This is the netchange in compensated absences for the year. 11,122

Governmental funds report District's pension contributions as expenditures.However, in the Statement of Activities, the cost of pension benefits earnednet of employee contributions is reported as pension expense:

Pension contributions 2,357,009Pension expense as per actuarial report (2,900,919)

Add: Difference between prior year deferred outflows associated with2015 actual employer contributions and the schedule of employerallocations 2015 actual employer contributions 501Less: Rounding off difference (2)

Net adjusted pension expenditure (2,900,420)

Change in Net Position-total Governmental Activities $ 511,306


STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUNDBALANCE – BUDGET AND ACTUAL (NON-GAAP

BUDGETARY BASIS)


GENERAL FUND/OPERATIONAL STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -

BUDGET AND ACTUAL (NON - GAAP BUDGETARY BASIS) FOR THE YEAR ENDING JUNE 30, 2016

Budgeted AmountsOriginalBudget

FinalBudget Actual Variance

REVENUES:State Sources $ 23,351,186 $ 23,063,866 $ 23,125,778 $ 61,912Federal sources 43,000 274,908 289,060 14,152Local Sources 192,946 192,946 197,928 4,982Interest Income 4,950 4,950 5,411 461

Total revenues 23,592,082 23,536,670 23,618,177 81,507


Instruction 13,923,636 14,009,211 13,951,896 57,315Support services:

Student 3,028,166 3,012,321 2,931,728 80,593Instruction 794,427 793,902 719,534 74,368

General administration 461,000 695,058 674,028 21,030School administration 1,771,438 1,781,614 1,748,591 33,023Central services 710,129 629,247 554,172 75,075Operation & maintenance of plant 2,823,558 2,874,243 2,662,312 211,931Student Transportation 6,000 6,000 6,000Other support service 104,448 104,448 83,344 21,104

Total expenditures 23,622,802 23,906,044 23,325,605 580,439

Net changes in fund balances (30,720) (369,374) 292,572 661,946

Beginning cash balance budgeted 30,720 369,374 0 (369,374)

Fund balances - beginning of year 0 0 237,176 237,176

Fund balances - end of year $ 0 $ 0 $ 529,748 $ 529,748

Budgetary reconciliation:Net change in fund balance, GAAP basis $ 288,063

Revenue accruals (net) 3,169Expenditure accruals (net) 1,340Other financing sources (net) 0

Net change in fund balance, NON -GAAP Budgetary basis $ 292,572



GENERAL FUND/TRANSPORTATIONSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -

BUDGET AND ACTUAL(NON - GAAP BUDGETARY BASIS) FOR THE YEAR ENDING JUNE 30, 2016



REVENUES:State Sources $ 1,166,453 $ 1,238,408 $ 1,238,408 $ 0

Total revenues 1,166,453 1,238,408 1,238,408 0


Transportation 1,166,453 1,238,444 1,238,436 8

Total expenditures 1,166,453 1,238,444 1,238,436 8

Net changes in fund balances 0 (36) (28) 8

Beginning cash balance budgeted 0 36 0 (36)

Fund balances - beginning of year 0 0 72 72

Fund balances - end of year $ 0 $ 0 $ 44 $ 44

Budgetary reconciliation:Net change in fund balance, GAAP basis $ (28)

Revenue accruals (net) 0Expenditure accruals (net) 0Other financing sources (net) 0

Net change in fund balance, NON -GAAP Budgetary basis $ (28)



GENERAL FUND/INSTRUCTIONAL MATERIALSSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -

BUDGET AND ACTUAL(NON - GAAP BUDGETARY BASIS) FOR THE YEAR ENDING JUNE 30, 2016



REVENUES:State Sources $ 158,914 $ 158,914 $ 205,092 $ 46,178local Sources 10 10

Total revenues 158,914 158,914 205,102 46,188


Instruction 158,914 158,914 144,312 14,602

Total expenditures 158,914 158,914 144,312 14,602

Net changes in fund balances 0 0 60,790 60,790

Fund balances - beginning of year 0 0 130,250 130,250

Fund balances - end of year $ 0 $ 0 $ 191,040 $ 191,040

Budgetary reconciliation:Net change in fund balance, GAAP basis $ 60,790

Revenue accruals (net) 0Expenditure accruals (net) 0Other financing sources (net) 0

Net change in fund balance, NON -GAAP Budgetary basis $ 60,790



SPECIAL REVENUE FUND - TITLE ISTATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -

BUDGET AND ACTUAL (NON - GAAP BUDGETARY BASIS) FOR THE YEAR ENDING JUNE 30, 2016

Budgeted AmountsOriginalBudget Final Budget Actual Variance

REVENUES:Federal sources $ 754,719 $ 883,572 $ 759,055 $ (124,517)

Total revenues 754,719 883,572 759,055 (124,517)


Instruction 643,764 694,228 637,778 56,450Support services-Instruction 58,517 132,837 124,460 8,377Support Services General

administration 23,048 27,107 24,010 3,097Support Services-School administration 1,000 1,000 1,000


Net changes in fund balances 28,390 28,400 (27,193) (55,593)


Fund balances - end of year $ 28,390 $ 28,400 $ (27,193) $ (55,593)

Budgetary reconciliation:Net change in fund balance, GAAP basis $ 0Removal of non-budgeted Activity funds 0Revenue accruals (net) (27,193)Expenditure accruals (net) 0Other financing sources (net) 0

Net change in fund balance, NON-GAAP budgetary basis $ (27,193)



SPECIAL REVENUE FUND- ENTITLEMENTSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUNDS BALANCE -

BUDGET (NON - GAAP BUDGETARY BASIS) AND ACTUALFOR THE YEAR ENDED JUNE 30, 2016

Budgeted AmountsOriginalBudget Final Budget Actual Variance

REVENUES:Federal grants $ 701,067 $ 806,787 $ 638,971 $ (167,816)

Total revenues 701,067 806,787 638,971 (167,816)


Instruction 470,387 523,457 498,745 24,712Support services- Students 84,537 123,857 115,999 7,858Support services- Instruction 124,059 134,059 125,974 8,085Support services-General Administration 22,084 25,414 23,333 2,081


Net changes in fund balances 0 0 (125,080) (125,080)


Fund balances - end of year $ 0 $ 0 $ (125,080) $ (125,080)

Budgetary reconciliation:Net Change in fund balance, GAAP basis $ 0

Revenue accruals (net) (125,079)Expenditure accruals (net) (1)Other financing sources (net) 0

Net Change in fund balance, NON-GAAP budgetary basis $ (125,080)



STATEMENT OF FIDUCIARY NET POSITIONS JUNE 30, 2016

PrivatePurpose Trust

Funds AgencyASSETS

Cash and investments $ 52,543 $ 782,022

Total assets 52,543 782,022

LIABILITIESAccounts payables 12,006Deposits held in trust for others 770,016

Total liabilities $ 782,022

NET POSITIONS

Endowments held in trust for scholarships and other purposes $ 52,543



STATEMENT OF CHANGES IN FIDUCIARY NET POSITIONSJUNE 30, 2016

PrivatePurpose Trust

FundsADDITIONS

Gifts and contributions $ 132,386

DEDUCTIONSScholarships awarded 137,077

Change in net position (4,691)

Net Positions beginning of the year 57,234

Net Position end of the year $ 52,543



NOTES TO THE FINANCIAL STATEMENTSJUNE 30, 2016

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Silver Consolidated School District No. 1, organized under the laws of the State of New Mexico, operatesunder the school board-superintendent form of government. The System provides public educationopportunities for children from first through twelfth grade, including but not limited to classroom andvocational studies; as well as school oriented social and athletic activities.

The District’s financial statements are prepared in accordance with generally accepted accountingprinciples (GAAP). The Governmental Accounting Standards Board (GASB) is responsible forestablishing GAAP for state and local governments through its pronouncements (Statements andInterpretations).

During the year ended June 30, 2016, the District adopted the following GASB Statements-

GASB Statement 72, Fair Value Measurement and Application:This Statement addresses accounting and financial reporting issues related to fair value measurements.The definition of fair value is the price that would be received to sell an asset or paid to transfer a liabilityin an orderly transaction between market participants at the measurement date. This Statement providesguidance for determining a fair value measurement for financial reporting purposes. This Statement alsoprovides guidance for applying fair value to certain investments and disclosures related to all fair valuemeasurements.

GASB Statement 73, Accounting and Financial Reporting for Pensions and Related Assets That AreNot within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASBStatements 67 and 68:The objective of this Statement is to improve the usefulness of information about pensions included in thegeneral purpose external financial reports of state and local governments for making decisions andassessing accountability. This Statement results from a comprehensive review of the effectiveness ofexisting standards of accounting and financial reporting for all post-employment benefits with regard toproviding decision-useful information, supporting assessments of accountability and inter period equity,and creating additional transparency implementation of this standard did not have a significant impact onthe District's financial.

GASB Statement 79, Certain External Investment Pools and Pool Participants:This Statement addresses accounting and financial reporting for certain external investment pools andpool participants. Specifically, it establishes criteria for an external investment pool to qualify for makingthe election to measure all of its investments at amortized cost for financial reporting purposes. Anexternal investment pool qualifies for that reporting if it meets all of the applicable criteria established inthis Statement. The specific criteria address (1) how the external investment pool transacts withparticipants; (2) requirements for portfolio maturity, quality, diversification, and liquidity; and (3)calculation and requirements of a shadow price. Significant noncompliance prevents the externalinvestment pool from measuring all of its investments at amortized cost for financial reporting purposes.Professional judgment is required to determine if instances of noncompliance with the criteria establishedby this Statement during the reporting period, individually or in the aggregate, were significant.Implementation of this standard did not have a significant impact on the District's financial.

29



NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONT'D)

A. Reporting entity

These financial statements present the District (the primary government). Component units are legallyseparate entities that are included in the District’s reporting entity because of the significance of theiroperating or financial relations with the District. Based on that criteria, the District had no componentunits. The District’s component unit in prior years, Aldo Leopold Charter School, became a state charteredschool July 1, 2010, and is no longer a component unit of the District.

B. Basis of Presentation

Government-wide Financial Statements:

The Statement of Net Positions and Statement of Activities display information about the reportinggovernment as a whole. They include all funds of the reporting entity except for fiduciary funds. Thestatements distinguish between governmental and business-type activities. Governmental activitiesgenerally are financed through taxes, intergovernmental revenues, and other non-exchange revenues.Business-type activities are financed in whole or in part by fees charged to external parties for goods orservices. The District has no business-type activities.

Fund Financial Statements:

Fund financial statements of the reporting entity are organized into funds, each of which is considered tobe separate accounting entities. Each fund is accounted for by providing a separate set of self-balancingaccounts that constitute its assets, liabilities, fund equity, revenues, and expenditure/expenses. Funds areorganized into two major categories: governmental, and fiduciary. An emphasis is placed on major fundswithin the governmental categories. A fund is considered major if it is the primary operating fund of theDistrict or meets the following criteria:

a. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental fund are atleast 10 percent of the corresponding total for all funds of that category or type.

30




B. Basis of Presentation - (Cont'd)

The funds of the financial reporting entity are described below:

Governmental Funds

General Fund

The General Fund is the primary operating fund of the District and always classified as a major fund. It isused to account for all activities except those legally or administratively required to be accounted for inother funds. Included in the General Fund are sub-funds; Operational, the Unrestricted District Fund;Transportation, which accounts for State source revenue used to transport students; InstructionalMaterials, which accounts for State Source Funds used to purchase textbooks; and Non-instructionalSupport, which accounts for various student extracurricular activities.

Special Revenue Funds

Special Revenue funds are used to account for the proceeds of specific revenue sources that are legallyrestricted to expenditures for certain purposes.

Capital Project Fund

The Capital project Funds are used to account for resources restricted for the acquisition or construction ofspecific capital projects or items.

Debt Service Fund

The Debt Service Fund accounts for the accumulation of financial resources for the payment of interestand principle on the general long-term debt of the District.

Fiduciary Funds

Fiduciary Funds are used to report assets held in a trustee or agency capacity for others and therefore arenot available to support District programs. The reporting focus is on net position and changes in netposition and is reported using accounting principles similar to proprietary funds.

Agency Funds account for assets held in a purely custodial capacity. Since agency funds are custodial innature (i.e.) assets equal liabilities, they do not involve the measurements of results of operations.Typically these funds are owned by the club, athletic teams, and/or student organizations.

The emphasis in fund financial statements is on the major funds in the governmental category. Non-majorfunds are summarized in a single column.

The District’s fiduciary funds are presented in the fiduciary fund financial statements by type (pension,private purpose and agency). Since by definition these assets are being held for the benefit of a third party(other local governments, private parties, pension participants, etc.) and cannot be used to addressactivities or obligations of the government, these funds are not incorporated into the government-widestatements.

31




B. Basis of Presentation - (Cont'd)

Major Fund Descriptions

General – See above description.

Title I – Fund used to account for federal resources administered by the New Mexico State Department ofEducation to provide assistance to educationally deprived students in low-income areas of the District.Required by the New Mexico Department of Education Manual of Procedures for New Mexico SchoolDistricts to be accounted for as a separate fund within the Special Revenue Funds (P.L. 103-382).

Entitlement Fund - Entitlement funds are used to account for federal resources administered by the NewMexico State Department of Education to provide for the special education needs of handicapped childrenthree to five years old. Required by the New Mexico Department of Education Manual of Procedures forNew Mexico School Districts to be accounted for as a separate fund within the Special Revenue Funds(P.L. 94-142 and P.L. 99-457).

Capital Improvements HB33 - The fund is used to account for the costs relating to erecting, remodeling,making additions to, providing equipment for, or furnishing public school buildings and purchasing orimproving public school grounds. Financing is provided through property taxes as specified by Article 26of the Public School Buildings Act. (House Bill 33)

SB-9 - Created by State law to account for the District tax levy restricted solely for use in improvements tothe physical plant (NMSA 1978 22-25-1) and is a special revenue fund.

Debt Service – See above description

C. Measurement focus, basis of accounting

Measurement focus is a term used to describe “which” transactions are recorded within the variousfinancial statements. The basis of accounting refers to “when” transactions are recorded regardless of themeasurement focus applied.

Measurement Focus

On the government-wide Statement of Net Position and the Statement of Activities, governmentalactivities are presented using the economic resources measurement focus as defined in item “b” below.

In the fund financial statements, the “current financial resources” measurement focus is used.

a. All governmental funds utilize a “current financial resources” measurement focus. Only currentfinancial assets, liabilities, and deferred inflows of resources are generally included on their balancesheets. Their operating statements present sources and uses of available spendable financial resourcesduring a given period. These funds use fund balance as their measure of available spendable financialresources at the end of the period.

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C. Measurement focus, basis of accounting - (Cont'd)

b. The government-wide financial statements utilize an “economic resources” measurement focus. Theaccounting objectives of this measurement focus are the determination of operating income, changesin net position (or cost recovery), and financial position. All assets, liabilities, and deferred inflows ofresources (whether current or noncurrent) associated with their activities are reported. Revenues,expenses, gains, losses, assets, deferred outflows of resources, liabilities and deferred inflows ofresources resulting from non-exchange transactions are recognized when the earnings progress iscomplete.

Basis of accounting:

The basis of accounting refers to the point at which revenues or expenditures/expenses are recognized inthe accounts and reported in the financial statements. It relates to the timing of the measurements maderegardless of the measurement focus applied.

1. Accrual:

The government-wide financial statements and the fiduciary fund financial statements are presented on theaccrual basis of accounting. Revenues are recognized when earned and expenses are recognized whenincurred. Revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities and deferredinflows of resources resulting from exchange and exchange-like transactions are recognized when theexchange takes place.

2. Modified Accrual:

The governmental fund's financial statements are presented on the modified accrual basis of accounting.Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual; i.e.,both measurable and available. “Available” means collectible within the current period or within 60 daysafter year end. Expenditures are generally recognized under the modified accrual basis of accounting whenthe related liability is incurred. The exception to this general rule is that principal and interest on generalobligation long-term debt, if any, is recognized when due.

Substantially all governmental fund revenues are accrued. In applying GASBS No. 33 to grant revenues,the provider recognizes liabilities and expenses and the recipient recognizes receivables and revenue whenthe applicable eligibility requirements, including time requirements, are met. Resources transmitted beforethe eligibility requirements are met are reported as deferred outflows of resources by the provider anddeferred inflows of resources by the recipient. Grant revenues not collected within 60 days of year end arerecorded as receivables and deferred inflows of resources. Such amounts are recorded net of estimateduncollectible amounts.

Property tax receivables are recognized net of estimated refunds and uncollectible amounts in the periodfor which the taxes are levied, even if they are not available. Property taxes not collected within 60 days ofyear-end are reported as deferred inflows of resources. Property taxes are considered fully collectible.

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C. Measurement focus, basis of accounting - (Cont'd)

In the government –wide Statement of Net Position, the governmental activities columns (a) are presentedon a consolidated basis by column, (b) and are reported on a fully accrual, economic resource basis, whichrecognizes all long-term assets and receivables as well as long-term debt and obligations. The District’snet position is reported in three parts – net investment in a capital asset; restricted net position; andunrestricted net position. The District first utilizes restricted resources when an expense in incurred andfor purposes for which both restricted and unrestricted net position are available.

The government-wide Statement of Activities reports both the gross and net cost of each of the District’sfunctions. The functions are also supported by generally government revenues (property taxes, certainintergovernmental revenues, and charges, etc.). The Statement of Activities reduces gross expenses(including depreciation) by related program revenues, operating and capital grants. Program revenuesmust be directly associated with the function. Charges for services include revenues based on exchange orexchange-like transactions. These revenues arise from charges to customers or applicants who purchaseuse or directly benefit from the goods, services or privileges provided. Revenues in this category includefees charged for specific services, such as attendance at athletic events, food service, copies, and auxiliaryservices. Operating grants include operating-specific and discretionary (either operating or capital) grantswhile the capital grants column reflects capital-specific grants.

The net costs (by function) are normally covered by general revenue (property taxes, intergovernmentalrevenues, interest income, etc.).

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

D. Budgets

Budgets for the General, Special Revenue, Debt Service and Capital Projects funds are prepared bymanagement and approved by the local school board and the Public Finance School Division of theDepartment of Education. The District has one Capital Project Fund, PSFA Funding, where vendors arepaid directly by the State of New Mexico. No budget statements are presented for this fund. Included inthe General Fund are activity funds which, although not budgeted by the District are considered Districtfunds. Therefore, these non-budgeted activity accounts are excluded from the budgetary comparisonstatement.

These budgets are prepared on the NON-GAAP cash basis, excluding encumbrances, and secureappropriation of funds for only one year. Carryover funds must be reappropriated in the budget of thesubsequent fiscal year.

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D. Budgets - (Cont'd)

Actual expenditures may not exceed the budget on a functional category basis, i.e., each budgetedexpenditure must be within budgeted amounts. Budgets may be amended in two ways. If a budget transferis necessary within a major category called a “series”, this may be accomplished with only local Board ofEducation approval. If a transfer between “series” or a budget increase is required, approval must also beobtained from Public Education Department.

The budgetary information presented in these financial statements has been amended in accordance withthe above procedures.

E. Cash and Investments

Cash includes amounts in demand deposits as well as short-term investments with a maturity of sixmonths from the date acquired by the government. State statutes authorize the government to invest inobligations of the U.S. Treasury, interest-bearing accounts with local financial institutions and the StateTreasurer Pool.

Money market investments and participating interest-earning investment contracts that have a remainingmaturity at the time of purchase of one year or less and are held by governments other than externalinvestment pools should be measured at amortized cost as provided in paragraph 9 of GASB No. 72.

New Mexico Statutes require that financial institutions with public monies on deposit pledge collateral, tothe owners of such monies, in an amount not less than 50% of the public monies held on deposit.Collateral pledged is held in safekeeping by other financial institutions, with safekeeping receipts held bythe District. The pledged securities remain in the name of the financial institution. Repurchase agreementsare required to be collateralized 102%.

F. Inventories

Except for U.S.D.A. commodities, which are shown at estimated value, inventories are valued at cost(first-in, first-out). Inventory in the Cafeteria Fund consists mainly of food items. Inventories, in othergovernmental fund types, consist primarily of supply-type assets.

G. Capital Assets

Capital assets purchased or acquired with an original cost of $5,000 or more are reported at historical costor estimated historical cost. Donated capital assets received prior to June 15, 2015, are recorded at theirestimated fair value at the date of donation. Donated capital assets received after June 15, 2015, arerecorded at acquisition value. Additions, improvements, and other capital outlays that significantly extendthe useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed asincurred. Depreciation on all assets is provided on the straight-line basis over the following estimateduseful lives

Buildings 20-50 yearsSoftware and Library Resources 3-5 yearsMachinery and equipment 5-10 yearsImprovements 10-20 years

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G. Capital Assets - (Cont'd)

The accounting treatment of property, plant and equipment depends on whether they are reported in thegovernment-wide financial statements or fund financial statements. In the government-wide financialstatements, fixed assets are accounted for as capital assets. In the fund financial statements, fixed assetsare accounted for as capital outlay expenditures of the governmental fund upon acquisition.

H. Long-Term Debt

The accounting treatment of long-term debt depends on whether the assets are reported in the government-wide or fund financial statements. All long-term debt to be repaid from governmental resources arereported as liabilities in the government-wide statements. The long-term debt consists primarily of bondspayable and accrued compensated absences. Long-term debt for governmental funds is not reported asliabilities in the fund financial statements. The debt proceeds are reported as other financing sources andpayment of principle and interest reported as expenditures.

I. Compensated Absences

The District’s policies, regarding vacation time, permit employees to accumulate earned but unusedvacation leave. The liability for these compensated absences is recorded as long-term debt in thegovernment-wide statements. The current portion of this debt is estimated based on historical trends. Inthe fund financial statements, governmental funds report only the compensated absence liability payablefrom expendable available financial resources. These liabilities have typically been liquidated fromgeneral fund resources.

J. Deferred Outflows/Inflows of Resources

In addition to assets, the statement of financial position and/or balance sheet will sometimes report aseparate section for deferred outflows of resources. This separate financial statement element, deferredoutflows of resources, represents consumption of net position that applies to a future period, and so willnot be recognized as an outflow or resource (expenses/expenditures) until then. The Government hadpension related deferred outflows of resources items that qualify for reporting in this category.

In addition to liabilities, the statement of financial position and/or balance sheet will sometimes report aseparate section for deferred inflows of resources. This separate financial statement element, deferredinflows of resources, represents an acquisition of net position that applies to a future period and so willnot be recognized as an inflow of resources (revenue) until that time. The Government has two types ofitems, one of which arises under the full accrual basis of accounting, and both of which arise under themodified accrual basis of accounting, that qualifies for reporting under this category. Accordingly, theitems, unavailable revenue, are reported in both the statement of net\ position and the governmental fundsbalance sheet. The amounts are deferred and recognized as an inflow of resources in the period that theamounts become available. The Government reports unavailable revenue from the following sources:

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J. Deferred Outflows/Inflows of Resources - (Cont'd)

Governmental Funds Balance Sheet

Statement ofNet Position

GeneralFund

CapitalImprovem

ent SB-9Debt

Service

Non-MajorGovernment

al Funds TotalAdvances received underexpenditure Driven Grants $ 73,663 $ $ $ $ $ 73,663 $ 73,663Property Taxes 45,851 474,701 189,851 307,280 1,017,683

Total $ 73,663 $ 45,851 $474,701 $ 189,851 $ 307,280 $ 73,663 $1,091,346

Additionally, The Government had also pension related deferred inflows of resources items that qualifyfor reporting in this category.

K. Equity Classifications

Government-wide Statements

Equity is classified as net position and displayed in three components:

a. Net investment in capital assets – consists of capital assets including restricted capital assets, net ofaccumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, orother borrowings that are attributable to the acquisition, construction, or improvement of those assets.

b. Restricted net position – consists of net positions with constraints placed on the use either by (1)external groups such as creditors, grantors, contributors, or laws or regulations of other governments;or (2) law through constitutional provisions or enabling legislation.

c. Unrestricted net position – all other net positions that do not meet the definition of “restricted” or“invested in capital assets”.

Fund Statements

During the year ended June 30, 2011, the District implemented GASB Statement 54 Fund BalanceReporting and Governmental Fund Type Definitions”. This Statement provides more clearly defined fundbalance categories to make the nature and extent of the constraints placed on a government’s fund balancemore transparent. The following classifications describe the relative strength of the spending constraintsplaced on the purposes for which resources can be used:

Non-spendable fund balance – amounts that are not in a spendable form(such as inventory) or are

required to remain intact.

Restricted fund balance – amounts constrained to specific purposes by their providers (such as

grantors, bondholders, and higher levels of government), through constitutional provisions, or by

enabling legislation.

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K. Equity Classifications - (Cont'd)

Committed fund balance – amounts constrained to specific purposes by the government itself, using

its highest level of decision-making authority, to be reported as committed, amounts cannot be used

for any other purpose unless the government takes the same highest level action to remove or

change its constraints.

Assigned fund balance – amounts a government intends to use for a specific purpose; intent can be

expressed by the governing body or by an official or body to which the government body delegates

the authority.

Unassigned fund balance – amounts that are available for any purpose; positive amounts are

reported only in the general fund.

The Board of Education establishes (and modifies or rescinds) fund balance commitments by the adoptionof a resolution or a vote of the Board. This is typically done through the adoption and amendment of thebudget. Assigned fund balance is established by the Board of Education through adoption or amendmentof the budget as intended for a specific purpose (such as the purchase of fixed assets, construction, debtservice or for other purposes). Expenditures incurred are normally paid from the most highly constrainedfund balance.

L. Property Tax

Property taxes attach as an enforceable lien on property as of January 1. Property tax rates for the year areset no later than September 1 each year by the Secretary of Finance and Administration. The rates of taxare then used by County Assessors to develop the property tax schedule by October 1. Taxes are payablein equal semiannual installments by November 10 and April 10 of the subsequent year and becomedelinquent 30 days later. Taxes are collected on behalf of the District by the County Treasurer and areremitted to the District in the month following collection. Because the Treasurer of the County in whichthe District is located is statutorily required to collect taxes as an intermediary agency for all forms ofgovernment, distribution of taxes are made through the applicable County to the District.

M. Interfund Activity

Inter-fund activity is reported as either loan, services provided, reimbursements or transfers. Loans arereported as inter-fund receivables and payable as appropriate and are subject to elimination uponconsolidation. Services provided, deemed to be at market or near market rates, are treated as revenues andexpenditures/expenses. Reimbursements are when one fund incurs a cost, charges the appropriatebenefiting fund and reduces its related cost as a reimbursement. All other inter-fund transactions aretreated as transfers. Inter-fund activity between governmental funds is netted as part of the reconciliationto the government-wide financial statements

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N. Use of Estimates

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

O. Pensions

For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows ofresources related to pensions, and pension expense, information about the fiduciary net position of theEducational Retirement Board (ERB) and additions to/deductions from ERB’s fiduciary net position havebeen determined on the same basis as they are reported by ERB, on the economic resources measurementfocus and accrual basis of accounting. For this purpose, benefit payments (including refunds of employeecontributions) are recognized when due and payable in accordance with the benefit terms. Investments arereported at fair value.

NOTE 2. CUSTODIAL CREDIT RISK

Custodial credit risk is the risk in the event of a bank failure the government’s deposits may not bereturned to it. The District does not have a deposit policy for credit risk beyond that disclosed in Note 1.As of June 30, 2016, $2,915,699 of the governments bank balance of $7,939,333 was exposed to custodialcredit risk as follows:

Uninsured and Collateralized $ 2,915,699

Total $ 2,915,699

BankBalance

CarryingAmount

Deposits by custodial risk category:Insured $ 500,000 $ 500,000Collateral held by the pledging bank's agent in the

District's name 4,523,634 3,706,207Uninsured and Collateralized 2,915,699 0

$ 7,939,333 $ 4,206,207

The District does not have a risk policy beyond that required by state statute.

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NOTE 3. CAPITAL ASSETS

Capital asset activity for the year ended June 30, 2016, was as follows:

BalanceJuly 1, 2015 Additions Deletions

BalanceJune 30, 2016

Capital assets not being depreciated:Land $ 270,563 $ $ $ 270,563

Total assets not being depreciated 270,563 0 0 270,563

Other capital assets:Building & improvements 48,365,956 270,376 48,636,332Land improvements 5,758,223 5,758,223Furniture and equipment 3,904,633 251,136 (31,261) 4,124,508

Total other capital assets at historical cost 58,028,812 521,512 (31,261) 58,519,063

Less accumulated depreciation for:Building & improvement (28,789,593) (998,414) (29,788,007)Land improvements (4,525,376) (331,786) (4,857,162)Furniture & equipment (3,721,110) (469,552) 31,261 (4,159,401)

Total accumulated depreciation (37,036,079) (1,799,752) 31,261 (38,804,570)

Total capital assets, net $ 21,263,296 $ (1,278,240) $ 0 $ 19,985,056

Depreciation expense was charged to governmental activities as follows:

Instruction $ 827,887Student support 17,998School support 53,993Administration general 35,994Administration school 4,499Central services 179,975Plant operation 557,923Transportation 121,483

Total depreciation expenses $ 1,799,752

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NOTE 4. LONG - TERM DEBT

During the year ended June 30, 2016, the following changes occurred in the liabilities reported in thegovernment-wide statement of net position:

BalanceJuly 01, 2015 Additions Deletions

BalanceJune 30, 2016

Due WithinOne Year

G.O Bonds, Series 2005 $ 4,115,000 $ $ 1,325,000 $ 2,790,000 $ 1,370,000Compensated Absences 51,546 128,172 139,294 40,424

Total $ 4,166,546 $ 128,172 $ 1,464,294 $ 2,830,424 $ 1,370,000

Annual debt service for bonds payable requirements are as follows:

Due in fiscal year ending June 30:

Year Principal Interest

2017 1,370,000 81,4102018 1,420,000 27,690

$ 2,790,000 $ 109,100

No Compensated absences are considered due and payable in the next fiscal year.

GENERAL OBLIGATION BONDS

During the year ended June 30, 2005, the District was authorized by voters of the District to issue$9,000,000 in general obligation bonds to erect, remodel, make additions to and furnish school buildings.

The District issued all of the $9,000,000 on April 15, 2005, with interest rates from 3.625% to 3.9%maturing serially with final maturity August 1, 2021.

The bonds and bond interest are paid from property tax levies enacted specifically for the debt retirement.The revenues pledged totaled $2,899,100 at June 30, 2016, and equal 100% of the tax levies enacted torepay the bonded indebtedness. The bonds were sold to erect and furnish facilities for the District. Interestrates range from 3.625% to 2.2% for individually scheduled retirements, and maturity dates range from2014 through 2018. The property tax levies expire when the related bond indebtedness is repaid.

During the year ended June 30, 2016, the District recognized $1,239,118 in property taxes pledged toretire the bonded indebtedness and retired $1,456,953 in bond principal and interest.

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NOTE 5. PENSION PLAN- EDUCATIONAL RETIREMENT BOARD

General Information about the Pension Plan

Plan description. ERB was created by the state’s Educational Retirement Act, Section 22-11-1 through22-11-52, NMSA 1978, as amended, to administer the New Mexico Educational Employees’ RetirementPlan (Plan). The Plan is a cost-sharing, multiple employer plan established to provide retirement anddisability benefits for certified teachers and other employees of the state’s public schools, institutions ofhigher learning, and agencies providing educational programs. The Plan is a pension trust fund of theState of New Mexico. The New Mexico legislature has the authority to set or amend contribution rates.ERB issues a publicly available financial report and a comprehensive annual financial report that can beobtained at http://www.nmerb.org.

Benefits provided. A member’s retirement benefit is determined by a formula which includes threecomponent parts: the member’s final average salary (FAS), the number of years of service credit, and a0.0235 multiplier. The FAS is the average of the member’s salaries for the last five years of service or anyother consecutive five-year period, whichever is greater. A brief summary of Plan coverage provisionsfollows:

For members employed before July 1, 2010, a member is eligible to retire when one of the followingevents occurs: the member’s age and earned service credit add up to the sum or 75 or more; the member isat least sixty-five years of age and has five or more years of earned service credit; or the member hasservice credit totaling 25 years or more.

Chapter 288, Laws of 2009 changed the eligibility requirements for new members first employed on orafter July 1, 2010. The eligibility for a member who either becomes a new member on or after July 1,2010, or at any time prior to that date refunded all member contributions and then became, or becomes,reemployed after that date is as follows: the member’s age and earned service credit add up to the sum of80 or more; the member is at least sixty-seven years of age and has five or more years of earned servicecredit; or the member has service credit totaling 30 years or more.

The benefit is paid as a monthly life annuity with a guarantee that, if the payments made do not exceed themember’s accumulated contributions plus accumulated interest, determined as of the date of retirement,the balance will be paid in a lump sum to the member’s surviving beneficiary. There are three benefitoptions available: single life annuity; single life annuity monthly benefit reduced to provide for a 100%survivor’s benefit; or single life annuity monthly benefit is reduced to provide for a 50% survivor’sbenefit.

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NOTE 5. PENSION PLAN - EDUCATIONAL RETIREMENT BOARD (ERB) - (Cont'd)

Retired members and surviving beneficiaries receiving benefits receive an automatic cost of livingadjustment (COLA) to their benefit each July 1, beginning in the year the member attains or would haveattained age 65 or on July 1 of the year following the member’s retirement date, whichever is later. Priorto June 30, 2013 the COLA adjustment was equal to one-half the change in the Consumer Price Index(CPI), except that the COLA shall not exceed 4% nor be less than 2%, unless the change in CPI is lessthan 2%, in which case, the COLA would equal the change in the CPI, but never less than zero. As of July1, 2013, for current and future retirees the COLA was immediately reduced until the plan is 100% funded.

The COLA reduction was based on the median retirement benefit of all retirees excluding disabilityretirements. Retirees with benefits at or below the median and with 25 or more years of service credit willhave a 10% COLA reduction; their average COLA will be 1.8%. All other retirees will have a 20% COLAreduction; their average COLA will be 1.6%. Once the funding is greater than 90%, the COLA reductionswill decrease. The retirees with benefits at or below the median and with 25 or more years of servicecredit will have a 5% COLA reduction; their average COLA will be 1.9%. All other retirees will have a10% COLA reduction; their average will be 1.8%. Members on disability retirement are entitled to aCOLA commencing on July 1 of the third full year following disability retirement. A member on regularretirement who can prove retirement because of a disability may qualify for a COLA beginning July 1 inthe third full year of retirement.

A member is eligible for a disability benefit provided (a) he or she has credit for at least 10 years ofservice, and (b) the disability is approved by ERB. The monthly benefit is equal to 2% of FAS times yearsof service but not less than the smaller of (a) one-third of FAS or (b) 2% of FAS times year of serviceprojected to age 60. The disability benefit commences immediately upon the member’s retirement.Disability benefits are payable as a monthly life annuity, with a guarantee that, if the payments made donot exceed the member’s accumulated contributions, determined as of the date of retirement, the balancewill be paid in a lump sum to the member’s surviving beneficiary. If the disabled member survives to age60, the regular optional forms of payment are then applied. A member with five or more years of earnedservice credit on deferred status may retire on disability retirement when eligible under the Rule of 75 orwhen the member attains age 65.

Contributions. The contribution requirements of defined benefit plan members and the SilverConsolidated School District No. 1 are established in state statute under Chapter 10, Article 11, NMSA1978. For the fiscal year ended June 30, 2015 (and thereafter) employers contributed 13.90% ofemployees’ gross annual salary to the Plan; participating employees earning more than $20,000 annuallycontributed 10.70% of’ their gross salary. Employees earning $20,000 or less contributed 7.90%.Contributions to the pension plan from the District were $2,357,009 for the year ended June 30, 2016.

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Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows ofResources Related to Pensions: The total ERB pension liability, net pension liability, and sensitivityinformation were based on an annual actuarial valuation performed as of June 30, 2015. The total ERBpension liability was rolled forward from the valuation date to the Plan year ending June 30, 2015, usinggenerally accepted actuarial principles. Therefore, the employer’s portion was established as of themeasurement date June 30, 2015. At June 30, 2016, the District reported a liability of $39,416,109 for itsproportionate share of the net pension liability. The District’s proportion of the net pension liability isbased on the employer contributing entity’s percentage of total employer contributions for the fiscal yearended June 30, 2015. The contribution amounts were defined by Section 22-11-21, NMSA 1978. At June30, 2015, the District's proportion was 0.60853% percent, which was a decrease of 0.00925 from itsproportion measured as of June 30, 2014.

For the year ended June 30, 2016, the District recognized pension expense of $2,900,919. At June 30,2016, the District reported deferred outflows of resources and deferred inflows or resources related topensions from the following sources:

DeferredOutflows ofResources

DeferredInflows ofResources

Differences between expected and actual experience $ $ 730,739

Changes of assumptions 1,355,730

Net difference between projected and actual earnings onpension plan investments 177,422

Changes in proportion and differences between District'scontributions and proportionate share of contributions 108,572

Change in proportion after reallocation of inactive employers 448,400

District's contributions subsequent to the measurement date 2,357,009

Total $ 3,821,311 $ 1,356,561

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$2,357,009 reported as deferred outflows/inflows of resources related to pensions resulting from Districtcontributions subsequent to the measurement date June 30, 2016, will be recognized as a reduction of thenet pension liability in the year ended June 30, 2017. Other amounts reported as deferred outflows ofresources and deferred inflows of resources related to pensions will be recognized in pension expense asfollows:

Year ended June 30: Amount

2017 $ 187,3502018 172,7302019 79,5992020 (547,452)

Rounding off 32

Total $ (107,741)

Actuarial assumptions. As described above, the total ERB pension liability and net pension liability arebased on an actuarial valuation performed as of June 30, 2015. The total ERB pension liability was rolledforward from the valuation date to the Plan year ending June 30, 2015, using generally accepted actuarialprinciples. The liabilities reflect the impact of Senate Bill 115, signed into law on March 29, 2013, andnew assumptions adopted by the Board of Trustees on June 12, 2015. There were no significant events orchanges in benefit provisions that required an adjustment to the roll-forward liabilities as of June 30,2015. Specifically, the liabilities measured as of June 30, 2015, incorporate the following assumptions:

1. All members with an annual salary of more than $20,000 will contribute 10.70% during the fiscalyear ending June 30, 2015, and thereafter.

2. Members hired after June 30, 2013, will have an actuarially reduced retirement benefit if theyretire before age 55 and their COLA will be deferred until age 67.

3. COLAs for most retirees are reduced until ERB attains a 100% funded status.

4. These assumptions were adopted by the Board on June 12, 2015, in conjunction with the six-yearexperience study period ending June 30, 2014, and

5. For purposes of projecting future benefits, it is assumed that the full COLA is paid in all futureyears.

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For the purposes of projecting future benefits, it is assumed that the full COLA is paid in all future years.The actuarial methods and assumptions used to determine contribution rates included in the measurementare as follows:

Actuarial cost method Entry age normalAmortization method Level percentage of payrollRemaining period Amortized – closed 30 years from June 30, 2012, to June 30, 2042Asset valuation method 5 year smoothed market for funding valuation (fair value for financial

valuation)Inflation 3.00%Salary Increases Composition: 3% inflation, plus 1.25% productivity increase rate, plus

step rate promotional increases for members with less than 10 years ofservice

Investment Rate of Return 7.75%Retirement Age Experience based table of age and service ratesMortality 90% of RP-2000 Combined Mortality Table with White Collar

Adjustment projected to 2014 using Scale AA (one year setback forfemales)

The long-term expected rate of return on pension plan investments is determined annually using abuilding-block approach that includes the following: 1) rate of return projections are the sum of currentyield plus projected changes in price (valuation, defaults, etc.), 2) application of key economic projections(inflation, real growth, dividends, etc.), and 3) structural themes (supply and demand imbalances, capitalflows, etc.). These items are developed for each major asset class. Best estimates of geometric real rates ofreturn for each major asset class included in the Plan’s target asset allocation for 2015 and 2014 for 30-year return assumptions are summarized in the following table:

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Asset Class

2015 Long-TermExpected RealRate of Return

2014 Long-TermExpected RealRate of Return

Cash 3.25% 1.50%

Treasuries 3.50 2.00

IG Corp Credit 4.75 3.50

MBS 3.75 2.25

Core Bonds 3.98 2.53

TIPS 4.00 2.50

High Yield Bonds 5.75 4.50

Bank Loans 6.00 5.00

Global Bonds (Unhedged) 2.25 1.25

Global Bonds (Hedged) 2.41 1.38

EMD External 6.00 5.00

EMD Local Currency 6.75 5.75

Large Cap Equities 7.50 6.25

Small/Mid Cap 7.75 6.25

International Equities (Unhedged) 8.00 7.25

International Equities (Hedged) 8.47 7.50

Emerging International Equities 9.25 9.50

Private Equity 9.50 8.75

Private Debt 8.00 8.00

Private Real Assets 7.75 7.75

Real Estate 6.50 6.25

Commodities 5.75 5.00

Hedge Funds Low Vol 6.75 5.50

Hedge Funds Mod Vol 6.75 5.50

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Discount rate: A single discount rate of 7.75% was used to measure the total ERB pension liability as ofJune 30, 2015, and June 30, 2014. This single discount rate was based on the expected rate of return onpension plan investments of 7.75%. Based on the stated assumptions and the projection of cash flows, thePlan’s fiduciary net position and future contributions were projected to be available to finance allprojected future benefit payments of current pension plan members. Therefore the long term expected rateof return on Plan investments was applied to all periods of projected benefit payments to determine thetotal pension liability. The projection of cash flows used to determine this single discount rate assumedthat Plan contributions will be made at the current statutory levels. Additionally, contributions receivedthrough the Alternative Retirement Plan (ARP), ERB’s defined contribution plan, are included in theprojection of cash flows. ARP contributions are assumed to remain at a level percentage of ERB payroll,where the percentage of payroll is based on the most recent five year contribution history. The sensitivityof the District’s proportionate share of the net pension liability to changes in the discount rate. Thefollowing table shows the sensitivity of the net pension liability to changes in the discount rate as of thefiscal year end 2015. In particular, the table presents the (employer’s) net pension liability under thecurrent single rate assumption, as if it were calculated using a discount rate one percentage point lower(6.75%) or one percentage point higher (8.75%) than the single discount rate.

ERB Fund Division (A)1% Decrease

(6.75%)

CurrentDiscount

Rate (7.75%)1% Increase

(8.75%)

District's proportionate share of thenet pension liability $ 53,037,007 $ 39,416,109 $ 27,973,136

Pension plan fiduciary net position. Detailed information about the ERB’s fiduciary net position isavailable in the separately issued audited financial statements as of and for June 30, 2015, and 2014 whichare publicly available at www.nmerb.org.

Payables to the pension plan. The District doesn't have any amount due to the plan as on June 30, 2016.

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NOTE 6. POST-EMPLOYMENT BENEFITS – STATE RETIREE HEALTH CARE PLAN

Plan Description

The Silver Consolidated School District No. 1 contributes to the New Mexico Retiree Health Care Fund, acost-sharing multiple-employers defined benefit post employment health care plan administered by theNew Mexico Retiree Health Care Authority (RHCA). The RHCA provides health care insurance andprescription drug benefits to retired employees of participating New Mexico government agencies, theirspouses, dependents, and surviving spouses and dependents. The RHCA Board was established by theRetiree Health Care Act (Chapter 10, Article 7C, NMSA 1978). The Board is responsible for establishingand amending benefit provisions of the health care plan and is also authorized to designate optional and/orvoluntary benefits like dental, vision, supplemental life insurance, and long-term care policies.

Eligible retirees are: 1) retirees who make contributions to the fund for at least five years prior toretirement and whose eligible employer during that period of time made contributions as a participant inthe RHCA plan on the person’s behalf unless that person retires before the employer’s RHCA effectivedate, in which event the time period required for employee and employer contributions shall become theperiod of time between the employer’s effective date and the date of retirement; 2) retirees defined by theAct who retired prior to July 1, 1990; 3) former legislators who served at least two years; and 4) formergoverning authority members who served at least four years.

The RHCA issues a publicly available stand-alone financial report that includes financial statements andrequired supplementary information for the post-employment health care plan. That report and furtherinformation can be obtained by writing to the Retiree Health Care Authority at 4308 Carlisle NE, Suite104, Albuquerque, NM 87107.

Funding Policy

The Retiree Health Care Act (Section 10-7C-13 NMSA 1978) authorizes the RHCA Board to establish themonthly premium contributions that retirees are required to pay for healthcare benefits. Each participatingretiree pays a monthly premium according to a service based subsidy rate schedule for the medical plusbasic life plan plus an additional participation fee of five dollars if the eligible participant retired prior tothe employer’s RHCA effective date or is a former legislator or former governing authority member.Former legislators and governing authority members are required to pay 100% of the insurance premiumto cover their claims and the administrative expenses of the plan. The monthly premium rate schedule canbe obtained from the RHCA or viewed on their website at www.nmrhca.state.nm.us.

The employer, employee, and retiree contributions are required to be remitted to the RHCA on a monthlybasis. The statutory requirements for the employer and employee contributions can be changed by theNew Mexico State Legislature. Employers that choose to become participating employers after January 1,1998, are required to make contributions to the RHCA fund in the amount determined to be appropriate bythe board.

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NOTE 6. POST-EMPLOYMENT BENEFITS – STATE RETIREE HEALTH CARE PLAN -(CONT'D)

The Retiree Health Care Act (Section 10-7C-15 NMSA 1978) is the statutory authority that establishes therequired contributions of participating employers and their employees. For employees that were membersof an enhanced retirement plan (state police and adult correctional officer member coverage plan 1;municipal police member coverage plan 3, 4 or 5; municipal fire member coverage plans 3, 4 or 5;municipal detention officer member coverage plan 1; and members pursuant to the Judicial RetirementAct) during the fiscal year ended June 30, 2016, the statute required each participating employer tocontribute 2.5% of each participating employee’s annual salary; and each participating employee wasrequired to contribute 1.25% of their salary. For employees that were not members of an enhancedretirement plan during the fiscal year ended June 30, 2016, the statute required each participatingemployer to contribute 2.0% of each participating employee's annual salary; each participating employeewas required to contribute 1.0% of their salary. In addition, pursuant to Section 10-7C-15(G) NMSA1978, at the first session of the Legislature following July 1, 2013, the legislature shall review and adjustthe distributions pursuant to Section 7-1-6.1 NMSA 1978 and the employer and employee contributions tothe authority in order to ensure the actuarial soundness of the benefits provided under the Retiree HealthCare Act.

The Silver Consolidated School District No. 1 contributions to the RHCA for the years ended June 30,2016, 2015 and 2014 were $339,338, $314,759, and $340,535 respectively, which equal the requiredcontributions for each year.

NOTE 7. RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction ofassets; errors and omissions; injuries to employees; and natural disasters. Because the District was unableto obtain general liability insurance at a cost it considered to be economically justifiable, it joined togetherwith other school districts in the State and obtained insurance coverage with New Mexico Public SchoolsInsurance Authority, a public entity risk pool currently operating as a common risk management andinsurance program for member school districts. The District pays an annual premium to New MexicoPublic Schools Insurance Authority for its general insurance coverage, and all risk of loss is transferred.No losses exceeding insurance in the past three years.

The New Mexico Public Schools Insurance Authority is self-insured for property and liability lossesbelow $250,000 and purchases excess insurance above the self-insured retention. The self-insuredretention aggregate for property is set at $2,000,000 with a $1,000,000 stop loss. The self-insuredretention aggregate for liability is $3,000,000 with a $1,000,000 stop loss.

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NOTE 8. CONTINGENT LIABILITIES

Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantoragencies, principally the federal government. Any disallowed claims, including amounts already collected,may constitute a liability of the applicable funds. The amount, if any, of expenditures which may bedisallowed by the grantor, cannot be determined at this time although the government expects suchamounts, if any, to be immaterial.

NOTE 9. INTER-FUND ACTIVITY

Inter-fund balances of June 30, 2016, consisted of the following:

Due from other funds Amount Due to other funds Amount

Major governmental funds: Major governmental funds:Debt service $ 873,237 General Fund $ 1,446

Title I 278,568Entitlement 411,428Senate Bill 9 11,708

Total major governmental funds 873,237 Total major governmental funds 703,150

Total nonmajor governmental funds 174,173 Total nonmajor governmental funds 344,260

Grand total $ 1,047,410 Grand total $ 1,047,410

All amounts are expected to be repaid within one year. The purpose of the loans was to provide cash foroperating purposes.

There were no inter-fund transfers during the year ended June 30, 2016

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NOTE 10. RESTRICTED NET POSITON

At June 30, 2016, net positions restricted for other purposes included the following balances in specialrevenue funds:

Medicaid $ 583,805Cafeteria 110,340Other 58,918

$ 753,063

The District reported $3,558,957 in restricted positions, of which $1,289,806 restricted by enablinglegislation.

NOTE 11. ENDOWMENTS

The District received an endowment from the Estate of Dr. Theodore Draelos. This endowment of$22,500 is to be used for investment purposes only with the proceeds from such investments restricted touse for scholarship. The corpus is to remain intact for a twenty year period which commenced in 1988.This is in accordance with State law. Net appreciation of $5,640 is available for expenditure by thegoverning board. This appreciation is reported in net positions of the private purpose trust fund as a partof “held in trust for scholarships and other purposes”.

NOTE 12. EVALUATION OF SUBSEQUENT EVENTS

The District has evaluated subsequent events through November 04, 2016, the date which the financialstatements were available to be issued.

NOTE 13. DEFICIT FUND BALANCE

Generally accepted accounting principles require disclosures of certain information concerning individualfunds including:

a. Deficit fund balances of individual funds are the following:

Fund Names Amounts2009 Dual credit instruction $ 1,113NM reads to lead $ 33,3612012 GO bond student library $ 18,271State breakfast for elementary schools $ 4,556Kindergarten three plus $ 3,277USHHSD Pregnancy Prevention $ 6,174

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NOTE 14. JOINT POWER AGREEMENT

The Town of Silver City and the District are in agreement for the monthly payments of water, electricity,phone utility bills and the maintenance of the parking lots (labor, equipment, and materials), all fourbaseball parks, two soccer fields, concession stand, dugouts, and restrooms. The City and the District areboth responsible parties. The term of this agreement shall be three(3) years from the date of approval byDirector of Finance and Administration with the proviso that it is automatically renewed for three (3) yearterms thereafter unless one party gives notice of non-renewal at least (30) days before the first day of asucceeding three (3) year term.

NOTE 15. SUBSEQUENT ACCOUNTING STANDARD PRONOUNCEMENTS

In June 2015, GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans OtherThan Pension Plans, was issued. The provisions of this Statement are effective for postemploymentbenefits other than pensions (other postemployment benefits or OPEB) included in the general purposeexternal financial reports of state and local governmental OPEB plans for fiscal years beginning after June15, 2016. Earlier application is encouraged. The District is still evaluating how this standard will affectthe District.

In June 2015, GASB Statement No. 75, Accounting and Financial Reporting for Postemployment BenefitsOther Than Pensions, was issued. The provisions of this Statement are effective for addressing accountingand financial reporting for OPEB that is provided to the employees of state and local governmentalemployers for fiscal years beginning after June 15, 2017. Earlier application is encouraged. The District isstill evaluating how this standard will affect the District.

In August 2015, GASB Statement No. 77, Tax Abatement Disclosures, was issued. The provisions of thisStatement require governments that enter into tax abatement agreements to disclose relevant informationabout those agreements and is effective for fiscal years beginning after December 15, 2015. Earlierapplication is encouraged. The District is still evaluating how this standard will affect the District.

In December 2015, GASB Statement No. 78, Pensions Provided through Certain Multiple-EmployerDefined Benefit Pension Plans, was issued. The provisions of this Statement amends the scope andapplicability of Statement 68 to exclude pensions provided to employees of state or local governmentalemployers through a cost-sharing multiple-employer defined benefit pension plans and is effective forfiscal years beginning after December 15, 2015. The District is still evaluating how this standard willaffect the District.

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In January 2016, GASB Statement No. 80, Blending Requirements for Certain Component Units—anamendment of GASB Statement No. 14, was issued. The provisions of this Statement amends theblending requirements for the financial statement presentation of component units of all state and localgovernments. The additional criterion requires blending of a component unit incorporated as a not-for-profit corporation in which the primary government is the sole corporate member. The additional criteriondoes not apply to component units included in the financial reporting entity pursuant to the provisions ofStatement No. 39, Determining Whether Certain Organizations Are Component Units and is effective forreporting periods beginning after June 15, 2016. The District is still evaluating how this standard willaffect the District.

In March 2016, GASB Statement No. 81, Irrevocable Split-Interest Agreements, was issued. Theprovisions of this Statement requires that a government that receives resources pursuant to an irrevocablesplit-interest agreement recognize assets, liabilities, and deferred inflows of resources at the inception ofthe agreement. Furthermore, this Statement requires that a government recognize assets representing itsbeneficial interests in irrevocable split-interest agreements that are administered by a third party if thegovernment controls the present service capacity of the beneficial interests. This Statement requires that agovernment recognize revenue when the resources become applicable to the reporting period and areeffective for reporting periods beginning after December 15, 2016. The District is still evaluating how thisstandard will affect the District.

In March 2016, GASB Statement No. 82, Pension Issues—an amendment of GASB Statements No. 67,No. 68, and No. 73, was issued. The provisions of this Statement clarifies that payments that are made byan employer to satisfy contribution requirements that are identified by the pension plan terms as planmember contribution requirements should be classified as plan member contributions for purposes ofStatement 67 and as employee contributions for purposes of Statement 68. It also requires that anemployer’s expense and expenditures for those amounts be recognized in the period for which thecontribution is assessed and classified in the same manner as the employer classifies similar compensationother than pensions and is effective for reporting periods after June 15, 2016. The District is stillevaluating how this standard will affect the District.In February 2015, GASB Statement No. 72 Fair ValueMeasurement and Application, was issued. The provisions of this Statement are effective for financialstatements for periods beginning after June 15, 2015. Earlier application is encouraged. The District willimplement this standard during the fiscal year ended June 30, 2016. The District is still evaluating howthis pronouncement will affect the financial statements.

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APPENDIX D

FORM OF CONTINUING DISCLOSURE UNDERTAKING

FORM OF CONTINUING DISCLOSURE UNDERTAKING

Section 1. Recitals. This Continuing Disclosure Undertaking (the "Undertaking") is executed

and delivered by the Silver Consolidated School District No. 1, Grant County, New Mexico (the "District"),

in connection with the issuance of the $5,000,000 Silver Consolidated School District No. 1, Grant County,

New Mexico, General Obligation School Building Bonds, Series 2017 (the "Bonds"). The Bonds are being

issued pursuant to a Resolution of the District adopted on May 25, 2017 (the "Resolution"). Pursuant to

the Resolution, to allow the Underwriter of the Bonds to comply with the Rule (defined below), the District

is required to make certain continuing disclosure undertakings for the benefit of owners (including

beneficial owners) of the Bonds (the "Owners"). This Undertaking is intended to satisfy the requirements

of the Rule.

Section 2. Definitions.

(a) "Annual Financial Information" means the financial information (which will be

based on financial statements prepared in accordance with generally accepted accounting principles, as in

effect from time to time ("GAAP"), for governmental units as prescribed by the Governmental Accounting

Standards Board ("GASB")) or operating data with respect to the District, delivered at least annually

pursuant to Sections 3(a) and 3(b) of this Undertaking, consisting of information of the type set forth under

the captions “DEBT SERVICE REQUIREMENTS”, “TAX RATES”, “SILVER CONSOLIDATED

SCHOOL DISTRICT NO. 1”, "FINANCIAL INFORMATION - “Direct and Overlapping G.O. Bond Debt

Ratios”, and “Analysis of Assessed Valuations,” in the Official Statement. Annual Financial Information

may, but is not required to, include Audited Financial Statements.

(b) "Audited Financial Statements" means the District's annual financial statements

prepared in accordance with GAAP for governmental units as prescribed from time to time by GASB,

which financial statements have been audited by such auditor as may then be required or permitted by the

laws of the State.

(c) "EMMA" means the MSRB’s Electronic Municipal Market Access system located

on the MSRB website at emma.msrb.org.

(d) "Event Information" means the information delivered pursuant to section 3(d) of

this Undertaking.

(e) "MSRB" means the Municipal Securities Rulemaking Board. The current address

of the MSRB is 1300 I Street NW, Suite 1000, Washington, DC 20005, phone (202) 838-1500.

(f) "Official Statement" means the Official Statement delivered in connection with the

original issue and sale of the Bonds.

(g) "Report Date" means March 31 of each year, beginning in 2018.

(h) "Rule" means Rule 15c2-12 promulgated by the SEC under the Securities

Exchange Act of 1934, as amended (17 C.F.R. Part 240, § 240.15c2-12), as the same may be amended from

time to time.

(i) "SEC" means the Securities and Exchange Commission.

(j) "State" means the State of New Mexico.

Section 3. Provision of Annual Financial Information and Reporting of Event Information.

(a) The District, or its designated agent, will provide the Annual Financial Information

for the preceding fiscal year to EMMA on or before each Report Date while the Bonds are outstanding.

(b) If Audited Financial Statements are not provided as a part of the Annual Financial

Information, the District, or its designated agent, will provide unaudited financial statements as part of the

Annual Financial Information. In such cases, Audited Financial Statements will be provided to EMMA

when and if available.

(c) The District, or its designated agent, may provide Annual Financial Information

by specific reference to other documents, including information reports and official statements relating to

other debt issues of the District, which have been submitted to EMMA or filed with the SEC; provided,

however, that if the document so referenced is a "final official statement" within the meaning of the Rule,

such final official statement must also be available from the MSRB.

(d) The District, or its designated agent, will provide, to EMMA, notice of any of the

following events with respect to the Bonds in a timely manner not in excess of ten (10) business days after

the occurrence of the event:

(i) principal and interest payment delinquencies;

(ii) non-payment related defaults;

(iii) unscheduled draws on debt service reserves reflecting financial

difficulties;

(iv) unscheduled draws on credit enhancements reflecting financial

difficulties;

(v) substitution of credit or liquidity providers, or their failure to

perform;

(vi) adverse tax opinions or events affecting the tax-exempt status of the

Bonds;

(vii) modifications to rights of holders of the Bonds;

(viii) bond calls;

(ix) defeasances;

(x) release, substitution or sale of property securing repayment

of the Bonds;

(xi) rating changes;

(xii) bankruptcy, insolvency, receivership or a similar event with respect to the

District or an obligated person;

(xiii) the consummation of a merger, consolidation, or acquisition involving an

obligated person or the sale of all or substantially all of the assets of the

obligated person, other than in the ordinary course of business, the entry

into a definitive agreement to undertake such an action or the termination

of a definitive agreement relating to any such actions, other than pursuant

to its terms, if material;

(xiv) appointment of a successor or additional trustee, or a change of name of a

trustee, if material, and;

(xv) tender offers.

Section 4. Method of Transmission. Unless otherwise required by law and subject to

technical and economic feasibility, the District will employ such methods of electronic or physical

information transmission as are requested or recommended from time to time by EMMA, the MSRB and

the SEC.

Section 5. Enforcement. The obligations of the District under this Undertaking are for the

benefit of the Owners. Each Owner is authorized to take action to seek specific performance by court order

to compel the District to comply with its obligations under this Undertaking, which action will be the

exclusive remedy available to it or any other Owner. The District's breach of its obligations under this

Undertaking will not constitute an event of default under the Resolution, and none of the rights and remedies

provided by such Resolution will be available to the Owners with respect to such a breach.

Section 6. Term. The District's obligations under this Undertaking will be in effect from and

after the issuance and delivery of the Bonds and will extend to the earliest of (i) the date all principal and

interest on the Bonds has been paid or legally defeased pursuant to the terms of the Resolution; (ii) the date

on which the District is no longer an "obligated person" with respect to the Bonds within the meaning of

the Rule; or (iii) the date on which those portions of the Rule which require this Undertaking are determined

to be invalid or unenforceable by a court of competent jurisdiction in a non-appealable action, have been

repealed retroactively or otherwise do not apply to the Bonds.

Section 7. Amendments. The District may amend this Undertaking from time to time,

without the consent of any Owner, upon the District's receipt of an opinion of independent counsel

experienced in federal securities laws to the effect that such amendment:

(a) is made in connection with a change in circumstances that arises from a change in

legal requirements, a change in law, a change in the identity, nature or status of the District;

(b) this Undertaking, as amended, would have complied with the Rule at the time of

the initial issue and sale of the Bonds, after taking into account any amendments or interpretations of the

Rule, as well as any changes in circumstances; and

(c) the amendment does not materially impair the interests of the Owners.

Any Annual Financial Information containing amended operating data or financial information will

explain, in narrative form, the reasons for the amendment and the impact of the change in the type of

operating data or financial information being provided. If an amendment changes the accounting principles

to be followed in preparing financial statements, the Annual Financial Information and Audited Financial

Statements for the year in which the change is made will present a comparison between the financial

statements or information prepared on the basis of the new accounting principles and those prepared on the

basis of the former accounting principles.

Section 8. Beneficiaries. This Undertaking binds and inures to the sole benefit of the District

and the Owners and creates no rights in any other person or entity.

Section 9. Special Funds. This Undertaking shall be subject to availability of necessary funds

from annual revenues of the District and shall not be deemed to create a general obligation indebtedness of

the District.

Section 10. Governing Law. This Undertaking is governed by and is to be construed in

accordance with the law of the State.

Date: June 30, 2017


BOARD OF EDUCATION

By:

Mike McMillan, President


By:

Audie Brown, Superintendent

Documents

NOTICE SILVER CONSOLIDATED SCHOOL DISTRICT … · notice $5,000,000* silver consolidated school district no. 1 grant county, new mexico general obligation school building bonds series