UNION CITY COMMUNITY SCHOOLS

DISTRICT DATA

Location and Area

Union City Community Schools (the "School District") is a K-12 school district located in the south-central portion of Michigan’s lower peninsula. The School District covers an area of approximately 101 square miles in Branch and Calhoun Counties. The School District is comprised of all of the Village of Union City in Branch and Calhoun Counties, all of the Village of Sherwood and portions of Batavia Township, Girard Township, Matteson Township, Sherwood Township and Union Township in Branch County and all of the Village of Burlington and portions of Athens Township, Burlington Township, Fredonia Township, Newton Township and Tekonsha Township in Calhoun County.

Existing school facilities include one elementary school, a middle school, a high school and a community learning center.

Population

The School District’s estimated 1980, 1990, 2000 and 2006 populations within its boundaries are as follows:

Sources: School District figures: 1980 - Wayne State University, Michigan Metropolitan Information Center, 1990 – Michigan Department of Management and Budget, 2000 – Northwest Michigan Council of Governments, 2006 – School District. Municipal unit figures: U.S. Census of Population.

Board of Education

The School District is governed by seven elected Board of Education members who serve staggered four-year terms.

Enrollments

The following table shows total School District full time equivalent enrollments as of the Fall pupil count day, including special education, for the past ten years.

School District Facilities

School Employees

GENERAL FINANCIAL INFORMATION

Assessed Valuations

Taxable property in the School District is assessed by the respective municipal assessors and is subject to review by the County Equalization Departments. Tax levies on property in Michigan are applied against the taxable value of all property on the ad valorem tax roll as finally equalized by the State of Michigan.

In accordance with Act 539, Public Acts of Michigan, 1982, as amended, and Article IX, Section 3, of the 1963 Michigan Constitution, the ad valorem state equalized valuation ("SEV") represents 50 percent of true cash value. SEV does not include any value of tax exempt property (e.g. churches, governmental property and public schools) or property granted tax abatements under Act 198, Public Acts of Michigan, 1974, as amended. The assessed values of Industrial Facilities Tax (IFT) properties are maintained on a separate tax roll. Beginning in 1994, ad valorem property taxes are levied on the basis of taxable value, which is subject, in the case of some property, to assessment caps.

The following tables show a history of the taxable valuation for the School District and an analysis of the 2006 taxable value by class and by municipal unit.

Sources: County Equalization Departments.

Tax Levies and Collections

The School District's fiscal year begins July 1. School District property taxes are levied on December 1 of each fiscal year and are payable without penalty or interest on or before the following February 14.

State Aid Payments

The School District’s primary source of funding for operating costs is the State aid foundation allowance per pupil. The foundation allowance for all school districts in the State of Michigan is from $6,875 to $8,175 per pupil for the fiscal year 2005/06. In future years, this allowance may be adjusted by an index based upon the change in revenues to the State school aid fund and the change in the total number of pupils statewide.

The following table shows a history and 2005/06 estimate of the School District’s State Aid Membership, Foundation Allowance Per Pupil and Total State Aid Payments including categoricals.

The 2002/03 and 2003/04 Foundation Allowance Per Pupil was reduced by $95 and $74, respectively, due to State revenue shortfalls.

School District Tax Rates (Per $1,000 of Valuation)

The extra voted millage is levied on Non-Homestead property only. The extra voted millage levy expires with the December 2008 tax levy. The 3.5 mills Sinking Fund millage expires with the December 2010 tax levy and 0.9747 mills Sinking Fund millage expires with the December 2007 tax levy. The extra voted millage in years 2003 - 2006 and the Sinking Fund millage in 2002 – 2006 were reduced as a result of Article IX, Section 31 of the Michigan Constitution. See “Constitutional Millage Rollback” below.

Constitutional Millage Rollback

Article IX, Section 31 of the Michigan Constitution requires that if the total value of existing taxable property in a local taxing unit, exclusive of new construction and improvements, increases faster than the U.S. Consumer Price Index from one year to the next, the maximum authorized tax rate for that local taxing unit must be permanently reduced through a Millage Reduction Fraction unless the levy of new millage is authorized by a vote of the electorate of the local taxing unit.

Debt History and Future Borrowing

The School District has no record of default on its obligations and does not anticipate issuing additional capital financing bonds in the next twelve months.

General Fund Borrowing

The School District currently has a $1,500,000 State Aid Note, dated August 18, 2006 at 3.68% that matures August 20, 2007. The School District also has a computer lease agreement dated June 28, 2006 that matures July 10, 2008 and an installment purchase agreement for the purchase of two buses that is dated August 10, 2006 at 4.425% and matures August 1, 2010. For Other General Fund Obligations, see the School District’s audited financial statements.

ECONOMIC PROFILE

The School District is located in the south-central of Michigan’s lower peninsula. The area is primarily residential and agricultural with some commercial and industrial properties.

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

• 16 miles northwest of Coldwater
• 21 miles south of Battle Creek
• 39 miles southeast of Kalamazoo
• 64 miles southwest of Lansing
• 93 miles southeast of Grand Rapids
• 130 miles east of Detroit

Major Employers

Sources: 2006 Harris Michigan Industrial and Services Directories, 2006 Michigan Manufacturers Directory, Battle Creek Chamber of Commerce, School District and individual employers.

Unemployment

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

Source: State of Michigan Office of Labor Market Information.

Higher Education

Residents of the School District have access to many institutions of higher learning including Kellogg Community College and Battle Creek Career Center of Davenport University in Battle Creek and Albion College in Albion. Western Michigan University, Davenport University, Cornerstone University,
Kalamazoo College, Spring Arbor University and Kalamazoo Valley Community College are located in Kalamazoo.

Health Facilities

Health care needs of School District residents are served primarily by Community Health Center of Branch County with 88 beds located in Coldwater. Other facilities located nearby in Battle Creek include Battle Creek Health System with 208 beds, Southwest Regional Rehabilitation Center with 30 beds and Select Specialty Hospital - Battle Creek with 32 beds and Oaklawn Hospital in Marshall with 77 beds. A VA Medical Center is also located in Battle Creek.

Source: American Hospital Directory.

Transportation

State Route 60 passes through the School District. Interstate 69 is located east of the School District and Interstate 94 is located north of the School District providing easy access to other areas of Michigan. Commercial and airfreight services are available from Kalamazoo-Battle Creek International Airport in Kalamazoo.

Banking

The following banks have branches in the School District:

Source: Michigan Bankers Association 2006 Registry of Michigan Financial Institutions.