The URL can be used to link to this page

2017 Chesterfield Annual Town Report TOWN OF CHESTERFIELD ANNUAL REPORT 2017 ,QGH[ 'HSDUWPHQW 3DJH 'HGLFDWLRQ %RDUGVDQG0HHWLQJ6FKHGXOH (OHFWHG7RZQ2IILFLDOV $SSRLQWHG7RZQ2IILFLDOV $SSRLQWHG6SHFLDO&RPPLWWHHV $QQXDO7RZQ0HHWLQJ $VVHVVRUV %XLOGLQJ'HSDUWPHQW+DPSVKLUH,QVSHFWLRQ3URJUDP &DSLWDO,PSURYHPHQW3ODQQLQJ&RPPLWWHH &HPHWHU\&RPPLVVLRQ &RPPXQLW\&HQWHU2YHUVLJKW &RQVHUYDWLRQ&RPPLVVLRQ &RXQFLORQ$JLQJ &XOWXUDO&RXQFLO (PHUJHQF\0DQDJHPHQW'HSDUWPHQW )LQDQFH&RPPLWWHH )LUH'HSDUWPHQW +DPSVKLUH&RXQFLORI*RYHUQPHQWV +LJKODQG$PEXODQFH(06 +LJKZD\'HSDUWPHQW +LOOWRZQ&RPPXQLW\'HYHORSPHQW&RUSRUDWLRQ +LOOWRZQ5HVRXUFH0DQDJHPHQW&RRSHUDWLYH +LVWRULFDO&RPPLVVLRQ /LEUDU\7UXVWHHV&RPPLWWHH 0XQLFLSDO/LJKWLQJ3ODQW 3ODQQLQJ%RDUG 3ROLFH'HSDUWPHQW 5HFUHDWLRQ&RPPLWWHH ,QGH[&RQW¶G 'HSDUWPHQW 3DJH 6FKRRO'HSDUWPHQWV +DPSVKLUH5HJLRQDO6XSHULQWHQGHQW +DPSVKLUH5HJLRQDO0LGGOH+LJK6FKRRO +DPSVKLUH5HJLRQDO$WKOHWLFV 1HZ+LQJKDP5HJLRQDO(OHPHQWDU\6FKRRO 6HOHFW%RDUG 6HQLRUDQG'LVDEOHG7D[5HOLHI&RPPLWWHH 6HQLRU+RXVLQJ&RPPLWWHH 7D[&ROOHFWRU V5HSRUW 7RZQ$FFRXQWDQW¶V5HSRUW 7RZQ&OHUN¶V5HSRUW 7UHDVXUHU¶V5HSRUW 7UHH:DUGHQ 9HWHUDQV¶6HUYLFH$JHQW 9HWHUDQV¶0HPRULDO3DUN :HVWILHOG5LYHU:LOGDQG6FHQLF&RPPLWWHH =RQLQJ%RDUGRI$SSHDOV 'HGLFDWLRQ 7KH$QQXDO7RZQ5HSRUWLVGHGLFDWHGWR 7RZQ&OHUN6DQG\:LFNODQG6DQG\LVWKH 7RZQ¶VORQJHVWVHUYLQJHOHFWHGRIILFLDODV PDUNVKHUWK\HDUDV7RZQ&OHUN$VVXFK 6DQG\LVWKHRIILFLDOUHFRUGNHHSHURIWKH7RZQ ZLWKUHVSRQVLELOLWLHVWKDWLQFOXGHUHFRUGLQJDOO WKH³YLWDOV´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¶VJUDQGIDWKHUZKHUHWKH\UDLVHGWKHLU WZRGDXJKWHUV'HQLVHDQG$P\:KLOHKHUGDXJKWHUVZHUH\RXQJ6DQG\ VWD\HGKRPHWRFDUHIRUWKHPDQGDOVRUDQDGD\FDUHFHQWHUIRURWKHUDUHD FKLOGUHQ6LQFHWKHQVKHKDVZRUNHGIRUWKH'DLO\+DPSVKLUH*D]HWWHDQG WKH5HJLVWU\RI0RWRU9HKLFOHV6DQG\DOVRZRUNHGIRU)DPLO\)XQ0DJD ]LQHDVDVVLVWDQWPDQDJLQJHGLWRUXQWLOWKH\FORVHGWKHLU1RUWKDPSWRQ2I ILFH6KHFXUUHQWO\ZRUNVIRU+HQVKDZ:HOO'ULOOLQJLQ&KHVWHUILHOG $IWHUPRYLQJWR&KHVWHUILHOG6DQG\UHPDLQHGDFWLYHLQKHUFRPPXQLW\6KH ZDVDPHPEHURIWKH&KHVWHUILHOG0RWKHUV¶&OXE)RXUWKRI-XO\3DUDGH &RPPLWWHH7RZQ%XLOGLQJ&RPPLWWHH5HFRUGV3UHVHUYDWLRQ&RPPLWWHH DQGPRVWUHFHQWO\DFWLYHO\SDUWLFLSDWHGLQWKH'DYHQSRUW6LWH)HDVLELOLW\ 6WXG\IRUDQHZ3XEOLF6DIHW\&RPSOH[DQG7RZQ2IILFHV6DQG\HQMR\V VSHQGLQJKHUIUHHWLPHZLWKKHUIRXUEHORYHGJUDQGFKLOGUHQ 7KDQN\RX6DQG\IRUJRLQJDERYHDQGEH\RQGDQGIRUVHUYLQJ&KHVWHUILHOG ZLWKVXFKFDULQJFRPPLWPHQWDQGGHGLFDWLRQ&RQJUDWXODWLRQVRQEHLQJWKH 7RZQ¶VORQJHVWVHUYLQJHOHFWHGRIILFLDO &KHVWHUILHOG%RDUGVDQG0HHWLQJV6FKHGXOH $VVHVVRUV 0RQGD\V –SP - $VVLVWDQW$VVHVVRU :HGQHVGD\V –SP - %RDUGRI+HDOWK QGDQGWK0RQGD\V SP - %RDUGRI6HOHFWPHQ (YHU\RWKHU0RQGD\ SP - %XLOGLQJ,QVSHFWRU 0RQGD\V –SP - &KHVWHUILHOG*RVKHQ VW:HGQHVGD\ SPDW1HZ 6FKRRO&RPPLWWHH +LQJKDP(OHPHQWDU\ &RQVHUYDWLRQ&RPPLVVLRQ - UG0RQGD\ SP &RXQFLORQ$JLQJ WK0RQGD\ DPDWWKH - &RPPXQLW\&HQWHU )LQDQFH&RPPLWWHH :HGVGXULQJEXGJHW SP VHDVRQDVQHHGHG +DPSVKLUH5HJLRQDO VW0RQGD\ SPDW +LJK6FKRRO +DPSVKLUH5HJLRQDO /LEUDU\7UXVWHHV QG0RQGD\ SPDWWKH - /LEUDU\ 3ROLFH'HSDUWPHQW 0RQGD\V –SP - 3ODQQLQJ%RDUG VW0RQGD\ SP - 5HFUHDWLRQ&RPPLWWHH VW7KXUVGD\ SP 7D[&ROOHFWRU 0RQGD\V –SP - 7RZQ$GPLQLVWUDWRU 0RQGD\–7KXUVGD\ –SP - 7RZQ&OHUN 0RQGD\V –SP - VWDQGUG6DWXUGD\V –DP 0HHWLQJVDUHKHOGDWWKH'DYHQSRUW2IILFHEXLOGLQJXQOHVVQRWHGDQGWLPHVDQG GD\VDUHVXEMHFWWRFKDQJHHVSHFLDOO\LQWKHVXPPHU&KHFNWKHFDOHQGDUDW WRZQRIFKHVWHUILHOGPDFRPRUWKH7RZQ&OHUN¶V2IILFHIRUWKHPRVWFXUUHQW VFKHGXOHDQGDJHQGDV $GGLWLRQDO'HSDUWPHQWV $QLPDODQG'RJ&RQWURO%HWW\0ROOLVRQ -RU- %XLOGLQJ&RPPLVVLRQHU3DXO7DF\ - 3OXPELQJ,QVSHFWRU'RQDOG/DZWRQ - 9HWHUDQ¶V$JHQW7RP*HU\N - :LULQJ,QVSHFWRU*DU\*UDYHV - 0D\(OHFWHG7RZQ2IILFLDOV 2IILFLDO3RVLWLRQ ([SLUDWLRQ 6HOHFWPHQ-PHPEHUV\HDUWHUPV 5RJHU)XOOHU-&OHUN 5REHUW5HFRV—9LFH&KDLU 3DWULFLD&ROVRQ0RQWJRPHU\-&OHUN $VVHVVRUV-PHPEHUV\HDUWHUPV &U\VWDO$PHV (GZDUG6HYHUDQFH-&KDLU 0DU\$QQH6HYHUDQFH 0RGHUDWRU–PHPEHU\HDUWHUP 5XVVHOO3HRWWHUIRUUHPDLQGHURI\HDUWHUP 7RZQ&OHUN–PHPEHU\HDUWHUP 6DQGUD:LFNODQG 7UHDVXUHU–PHPEHU\HDUWHUP 0HJ0F:KHUWHU 7D[&ROOHFWRU–PHPEHU\HDUWHUP /HQRUH3LWWVLQJHU %RDUGRI+HDOWK–PHPEHUV\HDUWHUPV -RKQ&KDQGOHU-&KDLU .LUNH+HQVKDZ +DQN%DGQHU &KHVWHUILHOG*RVKHQ6FKRRO&RPPLWWHH–PHPEHUV\HDUWHUPV -DQ*LEHDX &\QWKLD.DVVHOOUHVLJQHG *HRII*RXJHRQDSSRLQWHGXQWLO0D\HOHFWLRQ 'RQDOG:LOODUG +DPSVKLUH5HJLRQDO6FKRRO&RPPLWWHH–PHPEHUV\HDUWHUPV -HVVH0F0LOODQ /HVOLH.HOORJJ &RQVWDEOHV–PHPEHUV\HDUWHUPV *DU\::LFNODQG 9DFDQW 5REHUW-XGG-U /LEUDU\7UXVWHHV–PHPEHUV\HDUWHUPV 5LWD+DUULV (LOOHHQ00F*RZDQ %HWV\7RGG 2IILFLDO3RVLWLRQ ([SLUDWLRQ 3ODQQLQJ%RDUG–PHPEHUV\HDUWHUPV $VVRFLDWHPHPEHUVIRU\HDUWHUPVDSSRLQWHGE\WKH0RGHUDWRU 0DUN.OLW]NH *HRUJH6WXUWHYDQW &KDUOHV9DOHQFLN-&KDLU 9DFDQW 0DXUHHQ%RUJ 'DQ+HQVKDZ -XGLWK7HUU\ $SSRLQWHG$VVRFLDWHPHPEHUVIRU\HDUWHUP 3LHUUH%ULVVRQ$VVRFLDWH &DURO-ROO\$VVRFLDWH 7UHH:DUGHQ–PHPEHU\HDUWHUP -RKQ/\QFK +DPSVKLUH&RXQW\RI*RYHUQPHQWV&RXQVHORU–PHPEHU\HDU WHUP 5XVVHOO3HRWWHU -XO\$SSRLQWHG7RZQ2IILFLDOV 2IILFLDO3RVLWLRQ ([SLUDWLRQ %RDUGRI5HJLVWUDUV–PHPEHUV\HDUWHUPV .DWKOHHQ%ULVERLV 7KHUHVH%ULJOH\ (OHDQRU6PLWK &DSLWDO,PSURYHPHQW3ODQQLQJ&RPPLWWHH-PHPEHUV\HDUWHUPV RQH\HDUPHPEHUVIURP6HOHFW%RDUGDQG)LQDQFH&RPPLWWHH 5RJHU)XOOHU6HOHFW%RDUG &DURO-ROO\)LQDQFH&RPPLWWHH 0DWW6PLWK 9DFDQF\ 9DFDQF\ &HPHWHU\&RPPLVVLRQ–PHPEHUVWKUHH\HDUWHUPV 5LFN5REHUWV ('HH&LQQHU -HUHP\%ULVERLV &RQVHUYDWLRQ&RPPLVVLRQ–PHPEHUV\HDUWHUPV 'RXJ)UDVHU -XOLD)UHHGJRRG -RKQ)ROOHW-&KDLU $QQ3LFNUHOO 6KHULOO5HGPRQ &RXQFLORQ$JLQJ–WRPHPEHUV\HDUWHUPV %DUEDUD%DN7UHDVXUHU 0LOHQQD&XUWLV )UDQFLQH)UHQLHU 0DU\-DQH0LOOHU9LFH&KDLU %HYHUO\3RPHUR\ -XG\3UHVV /LOOLDQ%LVEHH&KDLU -DPHV%ULVERLV 0DULO\Q'DYLGVRQ &XOWXUDO&RXQFLO–PHPEHUV\HDUWHUPVOLPLWRIFRQVHFXWLYH\HDUV .HVWHU:DUORZ-+DUU\&KDLU (OLJLEOHXQWLO 0\U/HDNH (OLJLEOHXQWLO 'HQLVH&RUPLHU (OLJLEOHXQWLO 6DVNLD'HPHONHU (OLJLEOHXQWLO /\QQ+LFNV (OLJLEOHXQWLO (LOHHQ0F*RZDQ (OLJLEOHXQWLO 6DUDK3ULQFH (OLJLEOHXQWLO 2IILFLDO3RVLWLRQ ([SLUDWLRQ (QHUJ\&RPPLWWHH–WRPHPEHUV\HDUWHUPV 'HQLVH&RUPLHU -RH*D]LOOR-&KDLU 7RP2ERUQH &KDUOHQH%DLDUGL 0DUN.OLW]NH )DUP )RUHVW&RPPLVVLRQ–\HDUWHUPV $OH[DQGUD³%RR´&KHUDX$OWHUQDWH .LP6DUDILQ /DUU\)XOOHU-U -HQQLIHU3HRWWHU .DUO:LFNODQG 7HYLV5REHUWVRQ-*ROGEHUJ )LQDQFH&RPPLWWHH–PHPEHUV\HDUWHUPV–DSSRLQWHGE\WKH0RGHUDWRU /DZUHQFH&HUYHOOL-&R-&KDLU /HH0DQFKHVWHU-&R-&KDLU -DQLFH*LEHDX -XVWLQ:HVW 0DULDQQH'UDNH -RKQ)ROOHW &DURO-ROO\ +LVWRULFDO&RPPLVVLRQ–PHPEHUV\HDUWHUPV ('HH&LQQHU-&KDLU (LOHHQ0F*RZDQ 9DFDQF\ 9DFDQF\ 9DFDQF\ 7RZQ$FFRXQWDQW–\HDUWHUP (ULN.LQVKHUI&3$ =RQLQJ%RDUGRI$SSHDOV–PHPEHUVDQGDVVRFLDWHV\HDUWHUPV /HH0DQFKHVWHU -&KDLU 0\U/HDNH -DFN/\RQV$VVRFLDWH ,DQ6WRQH—&KDLU 9DFDQF\-$VVRFLDWH $SSRLQWHG7RZQ2IILFLDOV2QH\HDUWHUPV &RPPXQLW\&HQWHU2YHUVLJKW&RPPLWWHH 0DU\DQQ&ROHPDQ 5REHUW5HFRV 1DQF\%UD[WRQ-DQ*LEHDXDSSRLQWHG-XO\ &RXQFLORQ$JLQJ'LUHFWRU 1DQF\%UD[WRQ-DQ*LEHDXDSSRLQWHG-XO\ &XVWRGLDQ 7KHUHVH%ULJOH\–&RPPXQLW\&HQWHU7RZQ+DOODQG7RZQ2IILFH 'RJ2IILFHU (OL]DEHWK0ROOLVRQ 0D\-$SULO (OHFWLRQ2IILFHU6SHFLDO3ROLFHIRU(OHFWLRQ %DUEDUD&XUUDQ (OHFWLRQ2IILFHUV–\HDUWHUP–DSSRLQWHGLQ$XJXVWSHU0*/ (PHUJHQF\0DQDJHPHQW'LUHFWRU /DUU\+ROPEHUJ (PHUJHQF\5HVSRQVH&RRUGLQDWRU /DUU\+ROPEHUJ (PHUJHQF\3ODQQLQJ&RPPLWWHH–DSSRLQWHGDVDJURXSE\SRVLWLRQRUWKHLUGHVLJQHH (GZDUG0XUUD\–3ROLFH'HSW /DUU\+ROPEHUJ-(0' 5RJHU)XOOHU–6HOHFW%RDUG 0DWWKHZ6PLWK–+LJKZD\'HSW -RKQ&KDQGOHU–%RDUGRI+HDOWK 'DYLG+HZHV-)LUH'HSW )HQFH9LHZHUV 5REHUW5HFRV )LUH&KLHIDQG:DUGHQ 'DYLG$+HZHV 'HSXW\)LUH&KLHI–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—\HDUWHUP /RFDO%XLOGLQJ,QVSHFWRU - 5REHUW:DOGHQ —\HDUWHUP *DV3OXPELQJ - 'RQDOG/DZWRQ :LULQJ - *DU\*UDYHV 'HSXW\:LULQJ - -DFN/\RQV .HHSHURIWKH&DQQRQ **LOPDQ6PLWK /LEUDULDQ–DSSRLQWHGE\/LEUDU\7UXVWHHV &\QWKLD6TXLHU-.OHLQ 0HPRULDO'D\3DUDGH&RPPLWWHH—PHPEHUV\HDUWHUP 7KRPDV*HU\N -RVHSK5XVVR 9DFDQF\ 0RWK6XSHULQWHQGHQW 5REHUW5HFRV 0XQLFLSDO/LJKW3ODQW0DQDJHU 0DUN.OLW]NH 3DUNLQJ&OHUN 9DFDQF\ 3LRQHHU9DOOH\3ODQQLQJ&RPPLVVLRQ -XGLWK7HUU\–&RPPLVVLRQHU 'DQ+HQVKDZ–$OWHUQDWH $SSRLQWHG7RZQ2IILFLDOV2QH\HDUWHUPV&RQW¶G 3ROLFH&KLHI (GZDUG0XUUD\ 3ROLFH2IILFHUV -HIIUH\)LVK—6HUJHDQW -XVWLQ+ROPHV *UHJ6PLWK -DVRQ6RXNXS &KDUOHV9DOHQFLN $LPHH:DOODFH 5HVHUYH3ROLFH2IILFHUV 1RQH3UHVHQWO\ 5HFUHDWLRQ&RPPLWWHH–PHPEHUV -RVHSK&OLFKp %REEL--R&OLFKp 'RQ:LOODUG 0HJDQ6KHLOV-:LOODUG &KULV6WURQJ 9DFDQF\ 9DFDQF\ 5LJKW7R.QRZ&RRUGLQDWRU **LOPDQ6PLWK 6HQLRUDQG'LVDEOHG7D[5HOLHI)XQG&RPPLWWHH 1DQF\%UD[WRQ&2$'LUHFWRU-DQ*LEHDXDSSRLQWHG-XO\ 0HJ0F:KHUWHU 0DU\$QQ6HYHUDQFH -XG\3UHVV (GZDUG6HYHUDQFH 6XSHULQWHQGHQWRI&HPHWHULHVDSSRLQWHGE\WKH&HPHWHU\&RPPLVVLRQ )UHGHULFD&KLFN $VVLVWDQW6XSHULQWHQGHQWRI&HPHWHULHVDSSRLQWHGE\WKH&HPHWHU\&RPPLVVLRQ 9DFDQW 7RZQ&RXQVHO .RSHOPDQ 3DLJH3& :HVWILHOG5LYHU:LOGDQG6FHQLF&RPPLWWHH 1DQF\5LFK 'HQLVH&RUPLHU$OWHUQDWH 9HWHUDQ¶V6HUYLFH$JHQW 'LVWULFW-7KRPDV*HU\N $SSRLQWHG6SHFLDO&RPPLWWHHV $'$&RPSOLDQFH–XQWLOFRPSOHWH ,DQ6WRQH %URDGEDQG&RPPLWWHH–XQWLOFRPSOHWH 0DUN.OLW]NH 6XVDQ/DEULH7RZQ$GPLQLVWUDWRU 'DYLG0DUVKDOO -DPHV6DFFHQWR -XVWLQ:HVW—&KDLU *UHHQ&RPPXQLWLHV$FWLRQ3ODQ&RPPLWWHH–XQWLOFRPSOHWH -RH*D]LOOR &DURO-ROO\ 7RP2ERUQH 1DQF\5LFK 3XEOLF6DIHW\%XLOGLQJ&RPPLWWHH–XQWLOFRPSOHWH :LQVWRQ%DQFURIW 3HWHU%DQLVWHU 'DYLG+HZHV /DZUHQFH+ROPEHUJ (GZDUG0XUUD\ **LOPDQ6PLWK 5REHUW5HFRV 6HQLRU+RXVLQJ&RPPLWWHH–PHPEHUVXQWLOFRPSOHWH 1DQF\%UD[WRQ -DQ*LEHDXDSSRLQWHG-XO\ 1DQF\+HZHV -XGLWK7HUU\ %DUEDUD7RGG -HDQ:HOOHU 9HWHUDQV¶3DUN&RPPLWWHH—XQWLOFRPSOHWH **LOPDQ6PLWK 'HH&LQQHU 5RELQ%DN &KDUOHV9DOHQFLN %RQQLH6PLWK :LUHG:HVW5HSUHVHQWDWLYHV–XQWLOFRPSOHWH 0DUN.OLW]NH–9RWLQJPHPEHU &DURO5KLQH–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¶3DUNDQGPDLQWDLQLW WKURXJKWKHILUVW\HDU 1RWH7KHQHZ9HWHUDQV¶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¶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¶V$QLPDO&RQWURO2I ILFHU¶VVDODU\DQGIRUOLFHQVHV VXSSOLHVDQGRWKHUGRJFRQ WUROUHODWHGH[SHQGLWXUHV :HWODQGV 3URWHFWLRQ &RQVHUYD WLRQ&RP PLVVLRQ 5HFHLSWVIURPIHHV 3D\PHQWVIRUH[SHQVHVDV VRFLDWHGZLWKDGPLQLVWUDWLRQ RIWKH:HWODQGV3URWHFWLRQ $FW ([SHQGLWXUHVIURPHDFKUHYROYLQJIXQGVKDOOEHVXEMHFWWRWKHDQQXDO OLPLWDWLRQHVWDEOLVKHGE\7RZQ0HHWLQJDQGWRDQ\DGGLWLRQDOOLPLWD WLRQVDVRWKHUZLVHVHWIRUWKLQ0DVVDFKXVHWWV*HQHUDO/DZV6HFWLRQ (RI&KDSWHU $QQXDO7RZQ0HHWLQJ&RQW¶G $57,&/(9RWHGXQDQLPRXVO\SXUVXDQWWR6HFWLRQ(RI&KDSWHU RIWKH0DVVDFKXVHWWV*HQHUDO/DZVDVPRVWUHFHQWO\DPHQGHGE\6HF WLRQRI&KDSWHURIWKH$FWVRIWRHVWDEOLVKOLPLWDWLRQVRQH[ SHQGLWXUHVIURPWKHUHYROYLQJIXQGVHVWDEOLVKHGE\$UWLFOHRIWKH*HQHUDO %\ODZVHQWLWOHG³5HYROYLQJ)XQGV´DQGWKHYRWHWDNHQXQGHU$UWLFOHDW WKLV7RZQ0HHWLQJDVIROORZV $57,&/(-DQ*LEHDXVSRNHWRUHFRJQL]H'HH&LQQHUIRUDOOVKHKDV GRQHIRUWKH7RZQDQGWUXO\DSSUHFLDWHVKHUGHGLFDWLRQWRWKH7RZQ 7KRVHLQDWWHQGDQFHVKRZHGWKHLUDJUHHPHQWWRKHUZLWKDVWDQGLQJRYD WLRQ 9RWHGWRDGMRXUQWKHPHHWLQJDW30YRWHUVDWWHQGHGWKHPHHWLQJ ZKLFKLVRIWKHUHJLVWHUHGYRWHUV $WUXHFRS\RIWKHYRWHVWDNHQ 6DQGUD/:LFNODQG &KHVWHUILHOG7RZQ&OHUN )<¶6SHQGLQJ/LPLW EXWLQQRHYHQWPD\LWH[FHHGWKHFXUUHQW EDODQFH EXWLQQRHYHQWPD\LWH[FHHGWKHFXUUHQW EDODQFH EXWLQQRHYHQWPD\LWH[FHHGWKHFXUUHQW EDODQFH EXWLQQRHYHQWPD\LWH[FHHGWKHFXUUHQW EDODQFH EXWLQQRHYHQWPD\LWH[FHHGWKHFXUUHQW EDODQFH 5HYROYLQJ$FFRXQW %RDUGRI+HDOWK%2+ 3ODQQLQJ%RDUG =RQLQJ%RDUGRI$SSHDOV 'RJ&RQWURO5HYROYLQJ )XQG :HWODQGV3URWHFWLRQ 6HOHFW%RDUG 7KHELJJHVWDFFRPSOLVKPHQWWR UHSRUWWKLV\HDULVWKDW&KHVWHUILHOG LVILQDOO\PDNLQJKHDGZD\RQWKH ORQJDQWLFLSDWHG)LEHUWRWKH+RPH %URDGEDQG3URMHFW7KH7RZQZDV DZDUGHGDQ6WDWH/DVW 0LOH,QIUDVWUXFWXUH*UDQWDQG VLJQHGDFRQWUDFWZLWK:HVWILHOG *DVDQG(OHFWULF:* (WRHQJL QHHUDQGFRQVWUXFWWKH7RZQ¶VQHW ZRUN&UHZVKLUHGE\:* ( FRXOGEHVHHQLQWKHIDOOWKURXJKRXW WKH7RZQPDSSLQJXWLOLW\SROHVLQSUHSDUDWLRQIRUWKHQHWZRUNGHVLJQDQG HQJLQHHULQJ&XUUHQWHVWLPDWHVKDYHWKHQHZEURDGEDQGV\VWHPXSDQG UXQQLQJLQWKHODWWHUSDUWRI0U-XVWLQ:HVWZDVDSSRLQWHGDVWKH 0XQLFLSDO/LJKW3ODQW0DQDJHUZLWKWKHWDVNRIRYHUVHHLQJWKHQHWZRUN 0U0DUN.OLW]NHUHPDLQVWKH7RZQ¶VGLOLJHQW:LUHG:HVWGHOHJDWH:LUHG :HVWLVVWLOOZRUNLQJWRZDUGDUHJLRQDOPDQDJHPHQWVROXWLRQRIWKHWRZQV¶ QHWZRUNVWRVDYHWKURXJKHFRQRPLHVRIVFDOH 7KH6HOHFW%RDUGFRQWLQXHGWKHLUHIIRUWVWRPDLQWDLQDQGLPSURYHWKH 7RZQ¶VLQIUDVWUXFWXUHEXLOGLQJVURDGVDQGYHKLFOHV7RZQEXLOGLQJV UHFHLYHGDWWHQWLRQDVIXQGVDOORZHG7KHIROORZLQJEXLOGLQJLPSURYHPHQW SURMHFWVZHUHXQGHUWDNHQWKLV\HDU · 7KH/LEUDU\KDGPROGUHPHGLDWLRQFRPSOHWHGLQWKHEDVHPHQWDQGD QHZGHKXPLGLILHUZDVSXUFKDVHGDQGLQVWDOOHGWRKHOSSUHYHQWIXWXUH PROGJURZWK · 7KH'DYHQSRUW7RZQ2IILFHVKDGPROGUHPHGLDWLRQFRPSOHWHGLQWKH EDVHPHQWIRUWKHVHFRQGWLPHLQ\HDUV:DWHUDQGPRLVWXUHLQWKH EDVHPHQWFRQWLQXHWRFDXVHLVVXHVHYHQZLWKDFRPPHUFLDOVL]HG GHKXPLGLILHURSHUDWLQJ7KH0HHWLQJ5RRPIORRUFDUSHWZDV UHPRYHGDQGWKHXQGHUO\LQJIORRUZDVVWULSSHGDQGUHILQLVKHG OHDYLQJWKHURRPVPHOOLQJDQGORRNLQJPXFKEHWWHU · $FRXVWLFDOSDQHOVZHUHLQVWDOOHGLQWKH&RPPXQLW\&HQWHU¶VPDLQ PHHWLQJKDOO7KH&2$UHSRUWHGWKDWVRXQGLQWKHURRPKDVEHHQ JUHDWO\LPSURYHGE\WKHQHZSDQHOV1HZOLJKWZHLJKWEDQTXHWWDEOHV DQGIROGLQJFKDLUVWRUDJHFDUWVZHUHSXUFKDVHGWRHDVHWKHEXUGHQ RIVHWWLQJXSDQGWDNLQJGRZQRIWKHVHLWHPVIRUHYHQWVLQWKH&HQ WHU · $)HDVLELOLW\6WXG\IRUDQHZ3XEOLF6DIHW\&RPSOH[7RZQ2IILFH %XLOGLQJZDVFRQWUDFWHG7KH)HDVLELOLW\6WXG\*URXSPHWVHYHUDO WLPHVZLWKDUFKLWHFW5R\%URZQWRGLVFXVVDQGUHVHDUFKRSWLRQVIRU EXLOGLQJRQWKH'DYHQSRUWVLWH0U%URZQDGYLVHGERWKWKH'DYHQ SRUW7RZQ2IILFH%XLOGLQJDQGWKH)LUH6WDWLRQZHUHQRWVXLWDEOHIRU UHQRYDWLRQ6RLOERULQJVZHUHFRPSOHWHGDQGDQDO\VLVGHWHUPLQHG 6HOHFW%RDUG&RQW¶G WKDWWKH'DYHQSRUWVLWHFRXOGVXSSRUWQHZVWUXFWXUHV0U%URZQ SUHVHQWHGVHYHUDODUFKLWHFWXUDOGUDZLQJVIRUFRQVLGHUDWLRQ+HPHW ZLWKWKH&RQVHUYDWLRQ&RPPLVVLRQWRGHWHUPLQHZKHUHZHWODQGV H[LVWHGDQGKRZWKH\FRXOGLPSDFWWKHVLWH$ZHWODQGVGHOLQHDWLRQ ZLOOWDNHSODFHLQWKHVSULQJRI0U%URZQZDVDVNHGWRSUH SDUHDVXPPDU\UHSRUWRIKLVILQGLQJVDQGLWVKRXOGEHDYDLODEOHDI WHUWKHZHWODQGGHOLQHDWLRQLVFRPSOHWH ·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¶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¶VRIILFLDOZHE VLWHZZZWRZQRIFKHVWHUILHOGPDFRPDQG&RGH5HGRXUSKRQHDQGHPDLO RXWUHDFKV\VWHPWKHUHLVDOLQNIURPWKH7RZQ¶VZHEVLWH+RPHSDJHWR XSGDWH\RXU&RGH5HGFRQWDFWLQIRUPDWLRQ–KRPHSKRQHFHOOSKRQHDQG HPDLODGGUHVV,QDGGLWLRQWRWKHVLJQLQIURQWRIWKH7RZQ+DOODQGPDVV PDLOLQJVSOHDVHEHVXUHWRFKHFNWKHZHEVLWHRIWHQWRNHHSLQIRUPHGRI WKHKDSSHQLQJVLQ7RZQ ,QDGGLWLRQWRDOOWKHLQIUDVWUXFWXUHSURMHFWVWKH6HOHFW%RDUGZRUNHGRQ QXPEHURIRWKHUSURMHFWV3DSHUZRUNDQGYRWHVZHUHFRPSOHWHGWRKDYH &KHVWHUILHOGSURFODLPHGDVD3XUSOH+HDUW&RPPXQLW\KRQRULQJWKRVHWKDW VHUYHGDQGVDFULILFHGIRUWKHLUFRXQW\6LJQVRQHLWKHUHQGRI0DLQ5RDG DQQRXQFHRXU3XUSOH+HDUW&RPPXQLW\GHVLJQDWLRQ7KH6HOHFW%RDUG DOVRZRUNHGGLOLJHQWO\WRUHYLHZDQGXSGDWHWKH7RZQ¶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¶V5HSRUW 1XPEHURIWRZQUHVLGHQWV 1XPEHURIUHJLVWHUHGYRWHUV %LUWKVUHFRUGHGWKUHHER\VIRXUJLUOV 'HDWKV 0DUFK–0LFKDHO6WHSKHQ6\VNR–DJH $SULO–&\QWKLD+DUGLVW\0D\–DJH 0D\–%HUQDUG-%HUXEH–DJH -XQH–(WKHO3DWULFLD5REHUWVRQ–DJH -XO\–$OLFH%LVEHH–DJH $XJ–*DU\*HUDUG*R\HWWH–DJH 1RY–0DU\6/DIRJJ–DJH 'HF–-RKQ&DPURQ5REHUWVRQ-DJH 'HF–$QWKRQ\+DUULV–DJH 0DUULDJHV -XO\-6DUDK$/DURFKHDQG3HWHU*LOPDQ6PLWK $XJXVW–-RVKXD0LFKDHO%HFNHUDQG3DXO7HHOLQJ 1RYHPEHU–7DPDUD%ULWW5RVHQEHUJDQG3HWHU1LFKRODV'RQDWHOOL-U %XVLQHVV&HUWLILFDWHVGED¶VLVVXHG *RRGQRZ&RQVWUXFWLRQ 'RXJODV(*RRGQRZ 2OG&KHVWHUILHOG5G 7RP%R\OH+RPH5HSDLU 7KRPDV-%R\OH 'DPRQ3RQG5G %RIDW+LOO6DOHV 'HQQLV&3LWWVLQJHU %RIDW+LOO5G %XVLQHVV&HUWLILFDWHV&RQW¶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· 0RWRUYHKLFOHVWRSVUHVXOWLQJLQWUDIILFFLWDWLRQVZDUQLQJV · LQFLGHQWVUHTXLULQJLQYHVWLJDWLRQV · DUUHVWVRUFULPLQDOVXPPRQVHV ·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–6FRWW'DXSKLQLDV &DSWDLQ–$OH[.DVVHOO /LHXWHQDQW–6FRWW+DVNLQV /LHXWHQDQW–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¶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¶VVWDWLRQLQ*RVKHQIURP$0XQWLO PLGQLJKWVHYHQGD\VDZHHN'XULQJWKHPLGQLJKWWR$0WLPHSHULRG +LJKODQG(07¶VDUHDVVLVWHGE\3DUDPHGLFVIURPRWKHUDPEXODQFH FRPSDQLHVZKHQWKHVHUYLFHRID3DUDPHGLFLVUHTXLUHG+LJKODQG¶VDF WLYHURVWHUDVRI-XQHFRQVLVWHGRIPHPEHUVLQFOXGLQJ 3DUDPHGLFVDQG(07¶V 'U5D\PRQG&RQZD\RXUORQJWHUP0HGLFDO'LUHFWRUUHWLUHGDQGLV UHSODFHGE\'U3HWHU0RUVH0' 0LVVLRQ7KHPLVVLRQRI +LJKODQG$PEXODQFH(06,QF LVWRSURYLGH WKHIXOOUDQJHRIHPHUJHQF\PHGLFDOVHUYLFHVWRWKHPHPEHUFRPPXQL WLHV7KHVHVHUYLFHVLQFOXGH · 3URYLGLQJWUDLQLQJDQGFHUWLILFDWLRQWHVWLQJIRUDOOILUVWUHVSRQGHUV · 3URYLGLQJPDQGDWRU\LQRFXODWLRQVIRUDOOILUVWUHVSRQGHUV · 5XQQLQJEORRGSUHVVXUHFOLQLFVIRUUHVLGHQWVRIWKHVL[WRZQV · 'HYHORSLQJDQGSUDFWLFLQJHPHUJHQF\UHVSRQVHSODQVZLWKWKH VFKRROVDQGFDPSVLQWKHPHPEHUWRZQV · &RQGXFWLQJKHDOWKDQGVDIHW\FODVVHVIRUWKHVFKRROV · :RUNLQJZLWKWKH0DVVDFKXVHWWV(PHUJHQF\0DQDJHPHQW$JHQF\ 0(0$)HGHUDO(PHUJHQF\0DQDJHPHQW$JHQF\)(0$DQG +RPHODQG6HFXULW\WRGHYHORSHPHUJHQF\UHVSRQVHSODQVIRUWKH PHPEHUWRZQV · 3URYLGLQJPXWXDODLGDQGSDUDPHGLFLQWHUFHSWVHUYLFHVWRWKHQHLJK ERULQJFRPPXQLWLHV · 3URYLGLQJWUDQVSRUWVHUYLFHV · 3URYLGLQJVWDQGE\VHUYLFHIRUPDMRUHPHUJHQF\VLWXDWLRQVHJ KRXVHILUH · 3URYLGLQJVWDQGE\VHUYLFHIRUPDMRUFRPPXQLW\HYHQWVVXFKDVWKH &KHVWHUILHOG3DUDGHWKH$VKILHOG)DOO)HVWLYDODQGWKH&XPPLQJWRQ )DLU · 5HVSRQGLQJWRDOOFDOOVWKDWPD\UHTXLUHHPHUJHQF\PHGLFDO VHUYLFHV +LJKODQG$PEXODQFH(06&RQW¶G (PHUJHQF\5HVSRQVHV'XULQJ)<+LJKODQGUHVSRQGHGWRHPHU JHQF\FDOOVRIZKLFKZHUHQRVHUYLFH7KHVHDUHEURNHQGRZQE\7RZQ DVIROORZV $VKILHOG &KHVWHUILHOG &XPPLQJWRQ *RVKHQ3ODLQILHOG :LOOLDPVEXUJ 2WKHU 7UDLQLQJ7KHIROORZLQJLVDSDUWLDOOLVWRIVSHFLDOWUDLQLQJHYHQWVKHOG · &35WUDLQLQJVIRU(PHUJHQF\6HUYLFH3HUVRQQHO3ROLFH ILUHILJKWHUV · 3HGLDWULF$GYDQFHG/LIH6XSSRUW3$/6 · 0HGLFDO0DQDJHPHQW&ODVVHV · $/6%/6LQWHUIDFHFODVVHVIRUDUHD(07V · 6HYHUDO3DUDPHGLFVKDGWKHRSSRUWXQLW\WRSDUWLFLSDWHLQDFDGDYHUODE WRSUDFWLFHERQHLQMHFWLRQVDQGDGYDQFHGDLUZD\V · 0DVV&DVXDOW\,QFLGHQWWUDLQLQJFODVVIRUDOODUHD(07¶VDQGVW5H VSRQGHUV · %DVLF(07UHIUHVKHUFRXUVHV · 3DUDPHGLFUHIUHVKHUFRXUVHV &RPPXQLW\,QYROYHPHQW+LJKODQGSURYLGHGVXSSRUWWRRXUFRPPXQLWLHV LQFOXGLQJ · $PEXODQFH&RYHUDJHIRU&RPPXQLW\HYHQWVLQFOXGLQJWKH&KHVWHUILHOG WKRI-XO\3DUDGHWKH&XPPLQJWRQ)DLUWKH$VKILHOG)DOO)HVWLYDO +LOOWRZQ-XQLRU2O\PSLFV · (YDFXDWLRQGULOODWWKH6DQGHUVRQ$FDGHP\LQ$VKILHOG · 2Q$SULOWK+LJKODQGKRVWHGD%RDUG )LQDQFHFRPPLWWHHPHHW LQJZLWKDOORIRXUSDUWLFLSDWLQJWRZQV · 0HWZLWKWKHDGPLQLVWUDWRUVRIWKHQHZ6ZLIW5LYHU$GGLFWLRQ&HQWHULQ 3ODLQILHOGWRGLVFXVVUHVSRQVHV · +LJKODQGKRVWHGD5HG&URVVEORRGGULYHKHUHDWRXUVWDWLRQ ·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¶WKDYHVXFKD FRPPHUFLDOFRPSOH[ZHGRKDYHODUJHHYHQWVHJWKHWKRI-XO\ZKHUH WKLVWUDLQLQJZRXOGEHXWLOL]HG $JRRGGHDORIP\WLPHLVVSHQWRQWKH³ZKDWLI´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³*R-.LW´FRQWDLQLQJLWHPVVXFKDVIRRGFORWKLQJ PHGLFDWLRQVFRSLHVRILPSRUWDQWGRFXPHQWVSHWVXSSOLHVHWF3OHDVH FRQWDFWPHLI\RXZRXOGOLNHPRUHLQIRUPDWLRQDERXWFUHDWLQJDIDPLO\ HPHUJHQF\SODQRUD³*R-.LW´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¶VOHJDOUHVSRQVLELOLW\WRRE WDLQWKHSHUPLWDQGFDOOIRUWKHLQVSHFWLRQ)DLOLQJWRKDYH\RXUVWRYHLQ VSHFWHGLQFOXGLQJH[LVWLQJVWRYHVLVSXWWLQJOLYHVLQGDQJHU,I\RXKDYHD VWRYHDOUHDG\LQVWDOOHGSOHDVHFDOOXVIRUDTXLFNLQVSHFWLRQ ,ZLVKWRWKDQNDOOWKHWRZQERDUGVDQGGHSDUWPHQWVIRUWKHLUFRRSHUDWLRQ 7KHTXLFNUHVSRQVHDQGSURIHVVLRQDODWWLWXGHH[KLELWHGE\&KHVWHUILHOG¶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¶VILYHVFKRROVFRQWLQXHVWRVXSSRUWRXUPLVVLRQWRFRQWLQX DOO\LPSURYHVWXGHQWSHUIRUPDQFHDQGZHOIDUHSURIHVVLRQDOGHYHORSPHQW DQGLQVWUXFWLRQDOVWUDWHJLHVWRDGGUHVVWKHQHHGVRIDOOOHDUQHUV$VD'LV WULFWDQGZRUNLQJLQSDUWQHUVKLSZLWKWKHVWDIIRI5+&RQZHOO6FKRROLQ :RUWKLQJWRQDOORIRXUVFKRROVWDIIZRUNFRQVFLHQWLRXVO\ZLWKFRPPLWPHQW DQGSXUSRVHWRXSKROGRXUUHVSRQVLELOLW\WRWHDFKVWXGHQWVWRUHDGZULWH VSHDNZHOODQGFDOFXODWH:HDUHDOVRDFWLYHO\HPEUDFLQJRXUREOLJDWLRQWR DGGUHVV³VW&HQWXU\/HDUQLQJ6NLOOV´LQFOXGLQJFULWLFDOWKLQNLQJFUHDWLYLW\ FRPPXQLFDWLRQDQGFROODERUDWLRQSDLUHGZLWKDQLQWHJUDWLRQRIHPHUJLQJ WHFKQRORJLHV7KHIROORZLQJUHSRUWKLJKOLJKWVISURJUDPVHYHQWVDQGDFWLYL WLHVXQGHUWDNHQWRSURPRWHH[FHOOHQFHLQDFKLHYHPHQWDQGWRVXSSRUWRXU VWXGHQWV¶VXFFHVVDVOLIHORQJOHDUQHUVDQGUHVSRQVLEOHSDUWLFLSDQWVLQRXU VRFLHW\ 2XU'LVWULFWLVH[SDQVLYHDQGFRPSOH[:HKDYHWZRUHJLRQDOVFKRROGLVWULFWV DQGIRXUPXQLFLSDOVFKRROVHDFKDOVREHLQJLWVRZQGLVWULFW7KH'LVWULFW FRYHUVRYHUVTXDUHPLOHVDQGKDVDQHOHYDWLRQGLIIHUHQFHRIIHHW EHWZHHQ6RXWKDPSWRQDQG*RVKHQ–DWWULEXWHVWKDWVLJQLILFDQWO\LPSDFWGH FLVLRQVWRGHOD\RUFDQFHOVFKRROGXHWRLQFOHPHQWZHDWKHU(YHU\GD\YDQV IURP1RUULVDQG+5+6DVZHOODVEXVHVIURP'XUKDP6FKRRO6HUYLFHV /HFUHQVNL¶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³VWFHQWXU\OHDUQHUV´ZLWKWKH SURPLVHRIPDNLQJWKHP³IXWXUHUHDG\´OLIHORQJOHDUQHUV:HDUHRIWHQUH PLQGHGWKDWZHDUHSUHSDULQJVWXGHQWVIRUMREVDQGFDUHHUVWKDWGRQ¶WH[LVW +DPSVKLUH5HJLRQDO6XSHULQWHQGHQWRI6FKRROV&RQW¶G \HWLQVRPHFDVHVMREVWKDWKDYHQ¶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¶VJUDQWVPDQDJHU.DWHKDVDULFKZHOO- WUDYHOHGDQGYDULHGEDFNJURXQG6LQFHVKHKDVEHHQDQ(QJOLVK WHDFKHUDQG'HSDUWPHQW&KDLUSHUVRQDW+5+6:LWKWKHGHSDUWXUHRIWKH 'LVWULFW¶VVSHFLDOHGXFDWLRQDGPLQLVWUDWRULQ$XJXVWWKH-VFKRRO \HDUVWDUWHGZLWK3DWWL6]XOERUVNLDVWKHLQWHULP'LUHFWRURI3XSLO6HUYLFHV :KHQ3DWWLOHIWLQOHIWLQ1RYHPEHU+56'¶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³+DPSVKLUH5HJLRQDO&RPPXQLW\´DQGHQJDJLQJLQDVKDUHGDQGFRRUGLQDW HGFRPPLWPHQWIRULPSURYLQJWKHHGXFDWLRQZHSURYLGHWRRXUFKLOGUHQ,DP YHU\SURXGRIWKHZRUNRXUWHDFKHUVVXSSRUWVWDIIDQGDGPLQLVWUDWRUVKDYH GRQHWRHQKDQFHOHDUQLQJRSSRUWXQLWLHVDQGDFKLHYHPHQWRXWFRPHVIRUDOO VWXGHQWV,HQFRXUDJH\RXWRYLVLWWKHLQGLYLGXDOVFKRRO¶VRU6XSHULQWHQGHQW¶V ZHEVLWHZZZKU-NRUJIRUFXUUHQWQHZVDQGLQIRUPDWLRQDERXWRXUVWX GHQWVDQG'LVWULFWDFWLYLWLHVDVZHOODVDGHWDLOHGH[SODQDWLRQRIVFKRROEXGJ HWGHYHORSPHQW6FKRRO&RPPLWWHHPHHWLQJDJHQGDVDQGPLQXWHVFDQDOVR EHIRXQGKHUH7KHZHEVLWHZLOODOVRSURYLGH\RXZLWKOLQNVWRLQGLYLGXDO VFKRROZHEVLWHVDQGWRXVHIXOLQIRUPDWLRQIURPQXPHURXVUHVRXUFHV,DOVR UHFRPPHQGWKH'HSDUWPHQWRI(OHPHQWDU\DQG6HFRQGDU\(GXFDWLRQ¶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³0RWLYDWLRQWKH /LPELF6\VWHPDQG/HDUQLQJ´7KLVWRSLFLQLWLDWHGFRQYHUVDWLRQVRQKRZ VWXGHQWVOHDUQEHVWZKHQWKH\IHHOVDIHDQGZKHQWKH\VHHDPHDQLQJIXO FRQQHFWLRQEHWZHHQWKHOHVVRQDQGWKHLUOLYHV%HFDXVHRIWKLVWHDFKHUV SXVKHGIRUDGGLWLRQDOFROODERUDWLRQWLPHWRFUHDWHHQJDJLQJOHVVRQVDQGWR GHYHORSPHDQLQJIXOXQLWVIRUWKHVWXGHQWV7KLVWKHPHZDVEULGJHGWRWKH IROORZLQJ\HDU¶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¶V)RXQGDWLRQRQ0D\7KHVFUHHQLQJ JDYHVWXGHQWVWKHFKDQFHWRFRQVXOWZLWKDFDUGLRORJLVWDQGSURYLGHGWKHP KDQGV-RQ&35WUDLQLQJDQGUHOHYDQWHGXFDWLRQRQWKHVLJQVDQGV\PS WRPVRIVXGGHQFDUGLDFDUUHVWLQ\RXWK 7KHVSULQJEURXJKWRQRXUXVXDOURXQGRIVWDQGDUGL]HGWHVWVLQFOXGLQJ 0&$6DQG$3WHVWLQJ6HYHQWKJUDGHVWXGHQWVVFRUHGKLJKHUWKDQWKH VWDWHDYHUDJHLQERWK(QJOLVKDQGPDWKHPDWLFVDQGGHPRQVWUDWHGJUHDW LPSURYHPHQWVLQPDWKHPDWLFVZLWKDKLJKHUWKDQDYHUDJHJURZWKSHUFHQ WLOHLQFOXGLQJVXEJURXSRIVWXGHQWVVXFKDVVWXGHQWVZLWKGLVDELOLWLHVDQG KLJK-ULVNVWXGHQWV)RUWKHILUVWWLPHHLJKWKJUDGHWRRNWKH0&$6WHVW RQOLQHDVWKHVWDWHUROOVRXWDQHZFRPSXWHU-EDVHGV\VWHPRIWHVWLQJ $JDLQVWDWHLGHQWLILHGVXEJURXSVRIVWXGHQWVRXWSHUIRUPHGWKHLUSHHUV DFURVV0DVVDFKXVHWWV,QWHQWKJUDGHVWXGHQWVGHPRQVWUDWHGWUHPHQ GRXVJURZWKLQ(QJOLVKDQGPDWKZLWKDJURZWKSHUFHQWLOHZHOODERYHWKHLU SHHUVDFURVVWKHVWDWH6WXGHQWVDUHUHTXLUHGWRSDVVWKH0&$6H[DPLQ RUGHUWRHDUQWKHLUKLJKVFKRROGLSORPDDQGWKHUHKDVQHYHUEHHQD +DPSVKLUHVWXGHQWXQDEOHWRHDUQKLVRUKHUGLSORPDEHFDXVHRIWKLVUH TXLUHPHQW+DPSVKLUHVWXGHQWVDOVRWRRN$3H[DPVLQVXEMHFWV 6WXGHQWVZKRHDUQDRUKLJKHURQWKLVH[DPPD\EHDEOHWRJHWFROOHJH FUHGLWDQGE\SDVVFRXUVHZRUNLQFROOHJH6WXGHQWVDSSUHFLDWHEHLQJDEOHWR WDNHDGYDQWDJHRIWKLVRSSRUWXQLW\DQGHQMR\WKHFKDOOHQJHRIWKHFRXUVH ZRUN 6HYHQWKJUDGHJHRJUDSK\WHDFKHU7UDFH\3LQNKDPZDVDZDUGHGWKH *ULQVSRRQ7HDFKHURI([FHOOHQFH$ZDUGIRU+DPSVKLUH5HJLRQDO+HUFRO ODERUDWLYHQDWXUHVWURQJLQVWUXFWLRQDOVNLOOVOHDGHUVKLSRQKHUPLGGOH VFKRROWHDPDQGZRUNWREXLOGVROLGIDPLO\DQGFRPPXQLW\UHODWLRQVKLSV PDGHKHUDQLGHDOFDQGLGDWHIRUWKLVDFFRODGH$GGLWLRQDOO\WKH0DVVDFKX VHWWV6FKRRO/LEUDU\$VVRFLDWLRQ06/$DZDUGHG$QGUHD%HODQJHUWKH 6XSHU/LEUDULDQ$ZDUG (OHYHQ+DPSVKLUH5HJLRQDOPLGGOHVFKRROVWXGHQWVUHFHLYHGUHFRJQLWLRQDW WKH6WDWH6FLHQFH)DLURQ-XQH6WXGHQWVZKRUHFHLYHGUHFRJQLWLRQZHUH 6DJH$QWRQLR$ELJDLO%XVFKLQL.DOD*DUULGR1RUD*LDQHWWL 1DWKDQLHO3LFDUG3HWHU7VH-LOOLDQ6FRWW-HVVLH3DUDGLV6WHUQ 0LFKDHOD5RFN6DUD5XVVHOODQG.DWDU\]QD:LVQDXFNDV +DPSVKLUH5HJLRQDO+LJK6FKRROJUDGXDWHGVWXGHQWVRQ-XQH DIWHUDQH[FLWLQJZHHNRIVHQLRUDFWLYLWLHV$GYLVRUV/DXUD3RPSHLDQG 7RGG%U\DQWRUJDQL]HGIXQDQGHQJDJLQJHYHQWVIRUDOOWKHVHQLRUVWRSDUWLF LSDWHLQOHDGLQJXSWRWKHHYHQLQJ7KRPDV%LVEHHZDVUHPHPEHUHGDWWKH EHJLQQLQJRIWKHHYHQLQJDQGJUDGXDWHVUHFHLYHGWKHLUGLSORPDVDIWHUEHDX WLIXOPXVLFDQGPHPRUDEOHVSHHFKHVIURPFODVVYDOHGLFWRULDQ,GD:HLVVRI :HVWKDPSWRQFODVVVDOXWDWRULDQ%URG\'HDQRI6RXWKDPSWRQDQGFODVV RIILFHUV3H\WRQ%LQQHQNDGH/DXUHQ%UDDVWDG0DWWKHZ%DE\DNDQG%URG\ 'HDQ)RXUVHQLRUVGLGQRWPHHWWKH+5+6JUDGXDWLRQUHTXLUHPHQWVEXW DOOPHWWKHJUDGXDWLRQUHTXLUHPHQWVDIWHUDGGLWLRQDOFRXUVHZRUNE\WKHHQG RIWKHIDOORI $WWKHHQGRIWKH\HDU5HEHFFD3KHOSVUHWLUHGIURPKHUSRVLWLRQDV&KRUDO 'LUHFWRU:HVWKDPSWRQUHVLGHQWDQG+5+6JUDGXDWH/XDQQH&ODUNZKR ZDVWKHRIILFHPDQDJHUDOVRSXWLQKHUQRWLFHIRUUHWLUHPHQWLQ1RYHPEHU %RWK/XDQQHDQG5HEHFFDOHIWDOHJDF\DW+DPSVKLUH5HJLRQDOWKDWZLOO DOZD\VEHUHPHPEHUHGDQGGHHSO\DSSUHFLDWHG 2YHUWKHVXPPHUWKHDGPLQLVWUDWLYHWHDPZDVTXLWHEXV\KLULQJQHZVWDII *DU\3HUULHUZDVKLUHGLQ)HEUXDU\DVWKHKHDGFXVWRGLDQDIWHU 0LNH-XUNRZVNLUHVLJQHG$LGDQ7DOERWUHSODFHG5HEHFFD3KHOSVDQG $OHVLD(VWDEURRNUHSODFHG/XDQQH&ODUN.DWH0HVVPHUZDVWDSSHGDV WKHLQWHULP'LUHFWRURI&XUULFXOXPVR-DPHV%HOFDVWURZDVKLUHGWRWHDFK KLJKVFKRRO(QJOLVK.DUD:LOOPRYHGWR*HRUJLDDQG6\GQH\&ORXWLHU ILOOHGKHUSRVLWLRQLQWKH:HOOQHVV'HSDUWPHQW$P\$GDPVNLDQG3DWULFLD +DPSVKLUH5HJLRQDO0LGGOH+LJK6FKRRO&RQW¶G .HDQHMRLQHGWKHPDWKGHSDUWPHQWZKLOH6XVDQQDK%UDQFKDQG+D OH\5LFKDUGWRRNSRVLWLRQVLQWKHIRUHLJQODQJXDJHGHSDUWPHQW-HVVH 3RUWHU-+HQU\UHWXUQHGWR+DPSVKLUHDVDPLGGOHVFKRROVFLHQFHWHDFKHU EHFDXVH$OL)XUPDQUHVLJQHGDQG$P\%XVK-HIIUH\&DUULHUR'D\QD'ROLW WOH$OLFMD6WU\FKDU]/\QGVH\2SSHQKHLPHU.DWHO\Q+DQORQ$ELJDLO5LYDUG $P\%XUJHVVDQG%DUU\3HUVRQ-XQLRUMRLQHGWKH6SHFLDO(GXFDWLRQGHSDUW PHQWDIWHUDQXPEHURISDUDHGXFDWRUVDQGVSHFLDOHGXFDWLRQWHDFKHUV FKDQJHGSRVLWLRQVRUPRYHGRQ-XG\7KUDVKHUZDVKLUHGDV+DPSVKLUH¶V SHUPDQHQWVXEVWLWXWH7KUHHQHZFRDFKHVZHUHDOVRKLUHG*DUHWK)OLWFURIW EHFDPHWKHJLUOVYDUVLW\VRFFHUFRDFK6WHYH&URIWZDVDSSRLQWHGWKHER\V -9VRFFHUFRDFKDQG/HH0ROOLVRQZDVKLUHGDVWKHER\VYDUVLW\EDVNHWEDOO FRDFK 7KH-VFKRRO\HDUZHOFRPHGVWXGHQWVWR+DPSVKLUH5HJLRQDO $VHQUROOPHQWGHFUHDVHVLWLVLPSRUWDQWWRFRQWLQXHWRPDLQWDLQVWURQJSUR JUDPVDQGUHWDLQVROLGVWDIILQJWRHQVXUHWKDWJUDGXDWHVKDYHWKHVDPHRS SRUWXQLWLHVDVWKHLUSHHUVDFURVVWKHQDWLRQDQGWRHQVXUHZHDUHDEOHWR DWWUDFWVFKRROFKRLFHVWXGHQWV2YHUVFKRROFKRLFHVWXGHQWVPDNHXS +DPSVKLUH¶VFXUUHQWSRSXODWLRQDQGWKH\EULQJLQDGGLWLRQDOUHYHQXHWRRXU VFKRROV\VWHP 7KH6FKRRO&RXQFLOLGHQWLILHGILYHJRDOVIRU+DPSVKLUH5HJLRQDO¶V- VFKRRO\HDULQFOXGLQJJRDOVUHODWHGWRVXSSRUWLQJWKHZKROHFKLOGFRP PXQLFDWLRQFROOHJHDQGFDUHHUUHDGLQHVVFXUULFXOXPDQGLQVWUXFWLRQVFKRRO VDIHW\DQGWKHKHDOWKFXUULFXOXP2QHVSHFLILFUHFRPPHQGDWLRQZDVWRH[ SORUHWKHLGHDRIDVXSSRUWSURJUDPIRUVWXGHQWVZKRDUHVWUXJJOLQJZLWK PHQWDOKHDOWK$YHU\VXFFHVVIXOPRGHORXWRI%URRNOLQH0DVVDFKXVHWWV UHFHLYHGDJUDQWWRVXSSRUWRWKHUVFKRROVWRGHYHORSVLPLODUSURJUDPV *UDGH 1XPEHURI6WXGHQWV ϳ ϭϮϮ ϴ ϭϲϮ ϵ ϭϬϱ ϭϬ ϭϭϵ ϭϭ ϵϯ ϭϮн ϭϬϳ dŽƚĂů ϳϭϰ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¶V*3$LQVWHDGRIWHQVWDUWLQJZLWKWKHFODVVRI $3FODVVHVVWLOOFRXQWIRUWHQSRLQWV$GGLWLRQDOO\DOOFODVVHVZLWKD PRGLILHGFXUULFXOXPZLOOKDYHDZHLJKWRILQVWHDGRI7KLVDOORZVIRUD IDLUHUDVVHVVPHQWRIVWXGHQWOHDUQLQJDQGDPRUHDFFXUDWH*3$ ,Q6HSWHPEHUWKH+DPSVKLUHFRPPXQLW\OHDUQHGWKHVDGQHZVWKDW+5+6 JUDGXDWH0LWFK2XLPHWWHIURPWKHFODVVRIGLHGRIDQRSLRLGRYHUGRVH $V0LWFKZDVDQDWKOHWHPDQ\VWXGHQWVNQHZ0LWFKDQGZHUHVKRFNHGDQG VDGGHQHGE\KLVGHDWK6WXGHQWVRUJDQL]HGDFKDULW\EDVNHWEDOOHYHQWLQ 0LWFK¶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¶&RQQRU.DWHO\Q3LFNXQND&KDUORWWH5H\QROGV 1LFROH6DQVRXFL6HFUHWDU\6\GQH\6KXPZD\$EE\7RELQ7UHDVXUHU /\GLD7RXFKHWWH&R-3UHVLGHQW1LFROH7ULSS'-:LOODUGDQG5LYHU:LOOLDPV +DPSVKLUH5HJLRQDO0LGGOH+LJK6FKRRO&RQW¶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¶QHHGVDWWKHFHQWHU RIDOORIRXUFROOHFWLYHHIIRUWVDVWKH\WUXO\DUHRXUIXWXUH,KRSHWKDWWKHFRO OHJLDODQGFROODERUDWLYHDWPRVSKHUHDW+DPSVKLUHFRQWLQXHVWREHDEHQFK PDUNRIWKLVVFKRRODQGGLVWULFWIRU\HDUVWRFRPH 5HVSHFWIXOO\VXEPLWWHG .ULVWHQ6PLG\ 3ULQFLSDO +DPSVKLUH5HJLRQDO$WKOHWLFV ,WZDVDQRWKHUH[FLWLQJDQGVXFFHVVIXO\HDUIRUDWKOHWLFVDW+DPSVKLUH5H JLRQDO,QWKHZLQWHU7KH%R\V¶DQG*LUOV%DVNHWEDOO7HDPVERWKPDGH SOD\RIIV7KH%R\V¶WHDPIHOOLQWKHILUVWURXQGWR3DOPHUZKLOHWKHJLUOV¶WHDP GHIHDWHG6DELV,QWHUQDWLRQDO&KDUWHU6FKRROEHIRUHIDOOLQJWR6RXWK+DGOH\ LQWKH:HVWHUQ0DVV6HPL)LQDOVDWWKH&XUU\+LFNV&DJH%R\V¶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¶6RIWEDOO 7HDPZRQWKHLUWKFRQVHFXWLYH/HDJXH&KDPSLRQVKLSHQURXWHWRWKHWKHLU IRXUWKFRQVHFXWLYH:HVWHUQ0DVV&KDPSLRQVKLS.DW\2¶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¶VZLQQLQJZD\VFRQWLQXHG7KH %R\V¶DQG*LUOV¶&URVV&RXQWU\7HDPVERWKZRQ/HDJXH&KDPSLRQVKLSV WKLVSDVWIDOO7KH*LUOVILQLVKHGWKHUHJXODUVHDVRQXQGHIHDWHGFDSWXULQJ WKHLUWKFRQVHFXWLYHOHDJXHWLWOHDQGDOVRSODFHGUGLQWKH:HVWHUQ0DVV &KDPSLRQVKLSVTXDOLI\LQJWKHPIRUWKH6WDWH&KDPSLRQVKLSVZKHUHWKH\ SODFHGWKLQ'LYLVLRQ7KH%R\V¶WHDPZRQDOHDJXHWLWOHIRUWKHILUVW WLPHVLQFH*\PQDVW&DWULQD7RXFKHWWHSODFHGWKDOO-DURXQGDWWKH :HVWHUQ0DVV*\PQDVWLFV&KDPSLRQVKLSV7KH%R\V¶DQG*LUOV¶6RFFHU 7HDPVHDFKTXDOLILHGIRUWKH:HVWHUQ0DVV7RXUQDPHQWZKHUHWKH%R\V IHOOWR0RQXPHQW0RXQWDLQZKLOHWKH*LUOVEHDW+RRVDF9DOOH\EHIRUHHYHQ WXDOO\IDOOLQJWR6RXWK+DGOH\LQWKHTXDUWHUILQDOV+DPSVKLUH*ROISODFHG WKLQWKH'LYLVLRQ:HVWHUQ0DVV&KDPSLRQVKLSVDV*DUUHWW$QWRV]WLHG IRUQLQWKSODFHLQWKH,QGLYLGXDO7RXUQDPHQW +DPSVKLUH5HJLRQDO$WKOHWLFV&RQW¶G FDPHWRDQHQGDQGZHDUHOHIWZLWKPHPRULHVDQGH[DPSOHVRI+DPS VKLUH¶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¶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¶DELOLW\ WRGHFRGHZRUGV ,Q1+5(6KRVWHGPDQ\HQULFKPHQWDFWLYLWLHVIRUVWXGHQWVDQGIDPL OLHV,WZRXOGEHLPSRVVLEOHWROLVWDOORIWKHVSHFLDOHYHQWVDQGHQULFKPHQW RSSRUWXQLWLHVKRVWHGE\FODVVURRPWHDFKHUVEXWDIHZDUHDVIROORZV3UH- VFKRRO&KLQHVH1HZ<HDU3DUDGH*UDGHV-:LQWHU'DQFH*UDGH 6RFLDO+5+6*UDGXDWH3DUDGHDQGHQULFKPHQWILHOGWULSVLQDOOJUDGHV 7KHWK*UDGHHQGRI\HDUFHOHEUDWLRQDQGILHOGWULSZDVWR1DWXUH¶V &ODVVURRPLQ%HFNHWIRUWKUHHGD\VLQ0D\7KLVZDVDUHZDUGLQJH[SHUL HQFHIRUDOOVWXGHQWVDQGLWJDYHWKHPWKHRSSRUWXQLW\WRFRQQHFWDVD FODVVDQGWRFUHDWHPHPRULHVIRUWKH\HDUVWKH\VSHQWDW1HZ+LQJKDP 7KURXJKWKHVXSSRUWRIWKH3721HZ+LQJKDPRIIHUHGDYDULHW\RIDIWHU- VFKRROSURJUDPVWKDWSURPRWHHQULFKPHQWDQGFRQWLQXRXVOHDUQLQJ 7KHVHLQFOXGH&35DQGDEDE\VLWWLQJFRXUVH,QDGGLWLRQWRWKHHQULFK PHQWSURJUDPVWKH372VXSSRUWHGDQDVVHPEO\ZLWK7RP5LFDUGLDQG %LUGVRI3UH\FRIIHHVRFLDOVRQWKHILUVWGD\RIVFKRROIRU*UDGH.- 1HZ+LQJKDP5HJLRQDO(OHPHQWDU\6FKRRO&RQW¶G SDUHQWVDQGDJDLQWKHIROORZLQJZHHNIRULQFRPLQJSUH-VFKRROSDUHQWV 2WKHUHYHQWVDQGWUDGLWLRQVWKDWDUHIXQGHGLQZKROHRUSDUWE\WKH372 LQFOXGHFRIIHHVRFLDODWWKH+DOORZHHQ3DUDGH7KDQNVJLYLQJ6KDUH+ROL GD\%D]DDU/LWHUDF\1LJKWDQGWKH6SULQJ&RQFHUWDQG$UW6KRZ 7KH1HZ+LQJKDP6FKRRO&RXQFLO&KHVWHUILHOG)LUH'HSDUWPHQWDQG 372RQFHDJDLQNLFNHGRII7KH%DFNWR6FKRRO%%4RQ$XJXVWVW 7KH&DELQ)HYHU'LQQHU'DQFHDFRPPXQLW\HYHQWWRRNSODFHLQ-DQX DU\RI7KLVZDVKRVWHGE\WKH1+5(66FKRRO&RXQFLODQGIXQGHG LQSDUWE\DPXOWLJHQHUDWLRQDOJUDQWIURP+LJKODQG9DOOH$OGHU6HUYLFHV WRWKH&KHVWHUILHOGDQG:HVWKDPSWRQ&2$V&KHVWHUILHOG3XEOLF/LEUDU\ &)&(VRI:HVWKDPSWRQDQG&KHVWHUILHOG'DYHQSRUW&KLOGFDUHDQGWKH 1HZ+LQJKDP3727RSURPRWHZHOOQHVV1XUVH%URZQKRVWHGWZR- ZHHNEHIRUHVFKRROSURJUDPVIRUVWXGHQWVWROHDUQDQGYDOXHWKHLP SRUWDQFHRIDKHDOWK\OLIHVW\OHWKURXJKRXU-XPS8SDQG*RSURJUDP ZKLFKZDVVXSSRUWHGWKURXJKWKH&RPPXQLW$RXQGDWLRQRI:HVWHUQ 0DVVDFKXVHWWV*UDQW3URJUDP7KH6WXGHQW$ZDUHQHVVRI)LUH(GXFD WLRQSURJUDP6$)(IRUDOOJUDGHVFRQWLQXHVDW1+5(6XQGHUWKHVX SHUYLVLRQRI6XH/DEULH*RVKHQ)LUH&KLHI2XUPXVLFSURJUDPXQGHU WKHGLUHFWLRQRI0V+DWILHOGVKRZFDVHGRXUVWXGHQWV¶WDOHQWVE\SHUIRUP LQJGD\DQGHYHQLQJFRQFHUWVDORQJZLWKSDUWLFLSDWLRQLQRWKHUWUDGLWLRQDO SURJUDPVVXFKDV3LQZKHHOVIRU3HDFH7KDQNVJLYLQJ6KDUHDQGWKH 6SULQJ$UWDQG0XVLF)HVWLYDO 7KHVFKRRO\HDUEURXJKWVHYHUDOQHZWDOHQWHGVWDIIPHPEHUVWR 1+5(6:HZHOFRPHG6KDQQRQ0DUWLQDVIRXUWKJUDGHWHDFKHUUHSODF LQJ6DUDK%HQWZKRLVRQD\HDU¶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¶VVXFFHVV 5HVSHFWIXOO\6XEPLWWHG 7LP/XFH ,QWHULP3ULQFLSDO *UDGH/HYHO 2I6WXGHQWV 2I6FKRRO&KRLFH 3. . 7RWDO 3ODQQLQJ%RDUG 7KH3ODQQLQJ%RDUGKDVSULPDU\UHVSRQVLELOLW\IRUSODQQLQJDQGPDQDJLQJ JURZWKDQGGHYHORSPHQWLQ&KHVWHUILHOG 7KLVLVGRQHWKURXJKWKH7RZQ =RQLQJ%\ODZVDQGVXEGLYLVLRQFRQWUROUHJXODWLRQVLQFRQMXQFWLRQZLWKWKH 6WDWH¶V]RQLQJDFW ,QWKH3ODQQLQJ%RDUGZDVLQYROYHGLQDODZVXLWIRULWVDSSHDORID GHFLVLRQE\WKH%XLOGLQJ,QVSHFWRUWRLVVXHDEXLOGLQJSHUPLWIRUDORWRQ )DUPKRXVH5RDGGXHWRWKHVHTXHQFHRIDFWLRQVWDNHQE\WKHRZQHUDV PHQWLRQHGLQRXU$QQXDO5HSRUW$VRI\HDU¶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· 7RKHDUDQGGHFLGHDQDSSHDOWDNHQE\TXDOLI\LQJ DJJULHYHGSHU VRQV DVGHILQHGE\WKHUHOHYDQWVWDWXWHZLWKUHVSHFWWRLQDELOLW\WRRE WDLQDSHUPLWIRUFHUWDLQHQIRUFHPHQWDFWLRQVRUZLWKUHVSHFWWRDQRUGHU RUGHFLVLRQRIWKH%XLOGLQJ,QVSHFWRURURWKHUDGPLQLVWUDWLYHRIILFLDOLQ DOOHJHGYLRODWLRQRIDQ\SURYLVLRQRI&KDSWHU$RIWKH*HQHUDO/DZVRU RIWKLV7RZQ%\-/DZ ·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¶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¶VREMHFWLYH LVWRLQWURGXFHFKLOGUHQWREDVHEDOODQGHPSKDVL]HVVNLOOGHYHORSPHQWDQG VSRUWVPDQVKLSRYHUZLQQLQJ&KLOGUHQDUHH[SHFWHGWRWUDQVLWLRQIURPKLWWLQJ RIIRIDWHHWRKLWWLQJDFRDFKSLWFKHGEDOOE\WKHHQGRIWKHVHDVRQ0LQRU¶V REMHFWLYHLVWRH[SDQGH[LVWLQJDELOLWLHVDQGLQWURGXFHQHZVNLOOV7KLVOHYHO RISOD\LQFUHDVHVFRPSHWLWLRQE\LQWURGXFLQJVFRUHNHHSLQJDQGUHVXOWVLQ VWDQGLQJVGXULQJWKHVHDVRQDQGSOD\RIIJDPHVDWWKHHQGRIWKHVHDVRQ 0DMRU¶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p %REEL--R&OLFKp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¶VSUHOLPLQDU\DVVHVVPHQWDQGSURMHFW HGFRVWIRUUHSDLULQJWKH(GZDUGV0XVHXP:HFRPPXQLFDWHGWRWKH DUFKLWHFWDQGWKH6HOHFW%RDUGWKDWLWLVQHFHVVDU\WRFRPSO\ZLWKWKHJXLGH OLQHVIURPWKH6HFUHWDU\RIWKH,QWHULRUIRUKLVWRULFUHVWRUDWLRQ7KH0XVHXP LVDFRQWULEXWLQJKLVWRULFVWUXFWXUHLQD1DWLRQDO+LVWRULF'LVWULFWDQGPXVW FRPSO\LIWKH7RZQLVWRPDLQWDLQLWVDELOLW\WRDSSO\IRUJUDQWVIURP0DVV +LVWRULFDO&RPPLVVLRQ $Q\RQHZDQWLQJWRGRQDWHROGGRFXPHQWVRUSKRWRVSHUWLQHQWWR&KHVWHU ILHOG¶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¶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–FDQVHUYHXQWLO 1RUD%ODNHPHPEHU–FDQVHUYHXQWLO 'HQLVH&RUPLHUPHPEHU–FDQVHUYHXQWLO 0\U/HDNHPHPEHU–FDQVHUYHXQWLO .DWH3DUURWPHPEHU–FDQVHUYHXQWLO $P\6FXOO\PHPEHU–FDQVHUYHXQWLO &\QG\6SHUU\PHPEHU–FDQVHUYHXQWLO &RXQFLORQ$JLQJ 7KH&RXQFLORQ$JLQJ&2$VHUYHV&KHVWHUILHOGUHVLGHQWV\HDUVRIDJH DQGROGHU2IWKHFXUUHQWSRSXODWLRQRISHRSOHRYHU\HDUVRIDJH DUHRYHUWKHDJHRI7KUHHRXWRIRIWKH7RZQ¶VUHVLGHQWVDUH\HDUV RIDJHRUROGHU7KH&2$¶VFRUHUHVSRQVLELOLWLHVDUHWRLGHQWLI\WKHQHHGVRI WKHFRPPXQLW\¶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· )LWQHVVIXQDQGGH[WHULW\ * :HHNO\7¶DL&KLDGYDQFHG EHJLQQHUVFKDLU\RJD)HOGHQNUDLV * :HHNO\0DK-RQJJ * &2$DFWLYLWLHVLQLQFOXGHG %DVNHWDQGJRXUG-PDNLQJFODVVHV 6TXDUHGDQFHVWLPHV\HDU 0DK-RQJJWUDLQLQJFODVV · )RRGDQGRWKHUDVVLVWDQFH * 0RQWKO\IRRGGLVWULEXWLRQWRHOLJLEOHVHQLRUVWKURXJK)RRG%DQNRI :HVWHUQ0$ * 6XPPHU&,6$DQGIDUPHUVPDUNHWGLVWULEXWLRQIRRGSURJUDPVWRHOL JLEOHVHQLRUV * 2YHUVHHLQJIXHODVVLVWDQFHDSSOLFDWLRQV * 61$3IRRGVWDPSDSSOLFDWLRQHGXFDWLRQDQGRYHUVLJKW * +(1+LOOWRZQ(OGHUV1HWZRUNSURJUDPZLWK&KHVWHUILHOG+(1 ZRUNHU * $-DQXDU\SURJUDPIHDWXULQJ-DPHV.LWFKHQDQG)ULHQGVIRU WKH+LOOWRZQ)RRG3DQWU\DQG6XUYLYDO&HQWHU · +HDOWKSURJUDPV * $QQXDO0HGLFDUH6+,1(ZRUNVKRSDQQXDOIOXFOLQLF * %L-PRQWKO\IRRWFOLQLF * +LOOWRZQ&RPPXQLW\+HDOWK&DUH&RPPXQLW\2XWUHDFK:RUNHU OLDLVRQ * 0RQWKO\EORRGSUHVVXUHVHUYLFHV * (TXLSPHQWDYDLODEOHRQDVLJQ-RXWEDVLVZKHHOFKDLUZDONHUV FRPPRGHVHWF * 0DJQLI\LQJXQLWIRUYLVXDOO\LPSDLUHG · (GXFDWLRQDOUHFUHDWLRQDOPXVLFDODUWVRFLDORIIHULQJV * 6XQGD\DIWHUQRRQSURJUDPVHJFRQFHUWVHQYLURQPHQWDOWDONV PXVLFVWRU\WHOOLQJ * /LEUDU\ERRNH[FKDQJH * 9ROXQWHHUDSSUHFLDWLRQ * &KULVWPDVPXVLFSURJUDPDW1HZ+LQJKDP6FKRRO * 6FLHQFH0XVHXPRI&WSUHVHQWDWLRQZLWK1HZ+LQJKDP372 * /LEUDU\DQG,QWHUQHW-FRQQHFWHGFRPSXWHUQRRN * &2$&RPPXQLW\&HQWHU2SHQ+RXVHVL[WK\HDU * 0HQ¶V%UHDNIDVW*URXSRQFHPRQWK * $QQXDO+LOOWRZQ6HQLRU3LFQLFLQ-XQH(ONVKDPEXUJHUVDQG +RUVH0WQ-D]]%DQG * 2QJRLQJURWDWLQJVKRZVE\ORFDODUWLVWVDWWKHDUWJDOOHU\LQ&&& FRPPLWWHHURRP * &RIIHHDQG&KDWRIIHUVVHQLRUVD:HGQHVGD\PRUQLQJVRFLDOWLPH * 1XPHURXVRXWLQJVIRUPXVLFDODQGFXOWXUDOHYHQWVDQGOXQFKHRQV LQLWLDWHGE\WKH&2$7ULS&RPPLWWHH · 3DUWQHUVKLSVDIILOLDWLRQV * 'DYHQSRUW'D\&DUH&HQWHUDQQXDOSURJUDPFR-VSRQVRUHGZLWK &2$ * 0RQWKO\1RUWKHUQ+LOOWRZQ&RXQFLOVRQ$JLQJ&RQVRUWLXPPHHW LQJVZLWK&2$VKHOGLQ&&& * &KHVWHUILHOG5HFUHDWLRQ&RPPLWWHH * :RUWKLQJWRQ5HFUHDWLRQ&RPPLWWHH &RXQFLORQ$JLQJ&RQW¶G * -WRZQ&2$VDQGPXOWLJHQHUDWLRQDOSDUWQHUVVHH5HJLRQDO ,QLWLDWLYHV · 7UDQVSRUWDWLRQ&2$UHSUHVHQWDWLRQRQ+LOOWRZQ&'&7UDQVSRUWD WLRQ&RPPLWWHH · 1HZVOHWWHU'LVWULEXWHGPRQWKO\WRDOOROGHUDGXOWVLQ&KHVWHUILHOG DQGPDQ\VXUURXQGLQJKLOOWRZQV8QGHUDJUDQWIXQGHGE\WKH0$ ([HFXWLYH2IILFHRI(OGHU$IIDLUVDZDUGHGWRWKH&RQVRUWLXPDQG PDQDJHGE\WKH&KHVWHUILHOG&2$WKHQHZVOHWWHULVDPDMRUYHKLFOH SURPRWLQJ&2$DFWLYLWLHVDQGSURJUDPVWKURXJKRXWWKHUHJLRQ 5HJLRQDOLQLWLDWLYHV8QGHUWZR-\HDUJUDQWVIURP+LJKODQG9DOOH\(O GHU6HUYLFHVIXUWKHUH[SDQGHG&2$ILWQHVVSURJUDPV7¶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³FRPPXQLW\FUHGLWV´ SURJUDPPDWFKLQJWKHUHTXHVWVIRUKHOSIURPROGHUDGXOWVZLWKYROXQWHHUV ZKRKDYHRIIHUHGWRSURYLGHVSHFLILFVHUYLFHV 9ROXQWHHUV7KHEDFNERQHRIWKHZRUNRIWKH&2$LVDVWURQJFRQ VWDQWDQGUHVLOLHQWFRUHRIYROXQWHHUVZKRFRQWULEXWHFRXQWOHVVKRXUVRI VHUYLFHE\DVVLVWLQJZLWKPRQWKO\EURZQEDJGHOLYHU\DQG&,6$IDUP VKDUHVUXQQLQJWKHPHQ¶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¶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³FRROLQJSODFH´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¶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¶VFOHDUWKDWWKHVXSSRUWIRU UXUDOKRXVLQJGHYHORSPHQWRQWKHSDUWRIKRXVLQJDXWKRULWLHVOHQGLQJ LQVWLWXWLRQVDQGUHJXODWRU\ERGLHVFRPSHWHVZLWKXUEDQGHYHORSPHQWV ZKLFKKRXVHDODUJHQXPEHURIXQLWVXQGHURQHURRIZLWKSXEOLFVHSWLF DQGZDWHUV\VWHPVVHHQDVPRUHFRVW-HIIHFWLYH ,QWKHLQWHULPWKH&RPPLWWHHKDVFUHDWHGDVHULHVRIFRPPXQLW\SUHVHQ WDWLRQVWKDWZLOOSURYLGHWKHFRPPXQLW\ZLWKDOORIWKHLQIRUPDWLRQQHHGHG LQRUGHUWRPDNHWKHEHVWGHFLVLRQVDERXWVWD\LQJDWKRPHVHHNLQJVHQ LRUKRXVLQJXQLWVDQGRWKHUDOWHUQDWLYHVLQFOXGLQJ · :KDWLWWDNHVWRDJHLQSODFHHVWDWHSODQQLQJWUXVWVSRZHURIDWWRU QH\DGYDQFHGGLUHFWLYHV · 2SWLRQVIRU³JRLQJJUHHQ´LQEXLOGLQJRUUHKDEELQJKRXVHVDQGEXLOG LQJVHQLRUKRXVLQJXQLWV ·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¶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¶V5HSRUW ,Q,KDYHRYHUVHHQDQGDVVLVWHGLQWKUHH&UHPDLQVLQWHUPHQWVDW &HQWHU&HPHWHU\RQHIXOOERG\EXULDODW&HQWHU&HPHWHU\DQGRQHIXOO ERG\*UHHQ%XULDODW,UHODQG6W&HPHWHU\ $QHZ%XULDOLQIRUPDWLRQIRUPZLWK&KHVWHUILHOG¶VEXULDOUHTXLUHPHQWVZDV FUHDWHGDQGVHQWWRDOOWKHDUHD)XQHUDO+RPHV %DUHVSRWVDQGGHSUHVVLRQVLQ&HQWHUDQG0RXQW&HPHWHULHVZHUHVSUHDG ZLWKWRSVRLODQGVHHGHG ,UHFHLYHGPDQ\FDOOVLQIURPRWKHU0DVVDFKXVHWWVWRZQVLQUHJDUGVWR XQGHUVWDQGLQJRXU*UHHQ%XULDOUHTXLUHPHQWVLQKRSHVRIDFFRPPRGDWLQJ WKHQRZSRSXODUUHTXHVWRID*UHHQ%XULDOLQWKHLURZQWRZQV $OORIRXU&HPHWHULHVFRQWLQXHWREHEHDXWLIXOO\PDLQWDLQHG )UHGHULFD&KLFN&HPHWHU\6XSHULQWHQGHQW &HQWUDO+DPSVKLUH9HWHUDQV¶6HUYLFHV · 7KH9HWHUDQV¶6HUYLFHV'LUHFWRUFRQWLQXHVWRZRUNZLWKWKH0DVVDFKX VHWWV,QWHUDJHQF\&RXQFLORQ+RXVLQJDQG+RPHOHVVQHVVRQWKHLPSOH PHQWDWLRQRIWKH,QWHJUDWHG3ODQWR3UHYHQWDQG(QG+RPHOHVVQHVV $PRQJ9HWHUDQV2XURIILFHLVZRUNLQJGLOLJHQWO\WRDFKLHYHWKHJRDORI HQGLQJYHWHUDQV¶KRPHOHVVQHVVXQGHUWKHJXLGHOLQHVRIWKH86LQWHU DJHQF\&RXQFLORQ+RPHOHVVQHVV $VSDUWRIRXUFROODERUDWLYHZRUN ZLWKORFDODJHQFLHVVXFKDV&UDLJ¶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· 2XU9HWHUDQVHUYLFHVKDVFRQWLQXHGLWVSDUWLFLSDWLRQZLWKWKHDGYLVRU\ FRPPLWWHHRIWKH7KH -RKQ 3 0XVDQWH +HDOWK&HQWHUEHLQJFRQVWUXFWHG DWWKH%DQJVFRPPXQLW\FHQWHULQ$PKHUVW2XURIILFHFROODERUDWHG ZLWK&RROH\'LFNLQVRQKRVSLWDOLQRQHIDFHWRIWKHLUFRPPXQLW\KHDOWK QHHGVDVVHVVPHQWWKHFRQGLWLRQRIYHWHUDQVLQRXUORFDOFRPPXQLWLHV :HDVVLVWHGLQWKHGHYHORSPHQWDQGLPSOHPHQWDWLRQRIDUHJLRQDOVXU YH\DQGIRFXVJURXSVFRQVLVWLQJRIERWKYHWHUDQVDQGDQRWKHUFRQVLVW LQJRIYHWHUDQIDPLO\PHPEHUV 7KLVFRQILUPHGRXUEHOLHYHGH[SHFWDWLRQ RIXVHRIWKLVIDFLOLW\E\WKHFRPPXQLWLHV¶LQGLJHQWYHWHUDQSRSXODWLRQZH VHUYH7KH+LOOWRZQ&RPPXQLW\+HDOWK&HQWHULQ:RUWKLQJWRQDQG +XQWLQJWRQDUHRIWHQXVHGE\RXUYHWHUDQFOLHQWHOHUHVLGLQJLQWKDWDUHD RIRXUGLVWULFW2XUHQJDJHPHQWZLWKWKHSODQQLQJSURFHVVLVWRHQVXUH WKDWERWKWKHVHUYLFHVSURYLGHGDQGWKHV\VWHPVGHVLJQHGIRUEXLOGLQJ ZLOOPHHWWKHQHHGRIRXUYHWHUDQV:HORRNIRUZDUGWRLWVRSHQLQJLQ · 2XUGLVWULFWRIILFHKDVFRQWLQXHGLWVLQYROYHPHQWZLWKWKH9HWHUDQV-XV WLFH3DUWQHUVKLSKWWSVZZZZHVROGLHURQRUJYHWHUDQ-MXVWLFH- SDUWQHUVKLSDFROODERUDWLYHHIIRUWZLWKWKH1RUWKZHVW'LVWULFW$WWRUQH\¶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¶MXV WLFHRIILFHUDWWKH9$PHGLFDOFHQWHULQ/HHGV6ROGLHU2QDQGWKH'LV WULFW$WWRUQH\¶V2IILFHLQFROODERUDWLRQZLWKWKLVWUHDWPHQWFRXUW · 2YHUWKHODVW\HDU9HWHUDQV¶6HUYLFHVKDV SOD\HGDPRUHDFWLYHUROHLQ VXSSRUWRIWKH&KHVWHUILHOG9HWHUDQV¶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¶VRXWUHDFKHIIRUWVKDYHSURYHG WREHVXFFHVVIXODWYDULRXVORFDOHYHQWV$FRXSOHRIWKHPRUHQRWDEOH HYHQWVLQFOXGHWKH &KHVWHUILHOG WK RI-XO\SDUDGHDQGWKH&XPPLQJWRQ )DLU(YHU\\HDUZHVHHPWREHDEOHWRDVVLVWVHYHUDOYHWHUDQVDV D UHVXOWRISDUWLFLSDWLQJDWWKHVH HYHQWV7KLV\HDU¶V 9HWHUDQV'LQQHU &HQWUDO+DPSVKLUH9HWHUDQV¶6HUYLFHV&RQW¶G KRVWHGE\WKH&KHVWHUILHOG*UDQJHZDVDKLJKOLJKWLQRXUGLV WULFW GHOLYHULQJDGHOLFLRXVPHDOLQKRQRURIRXUYHWHUDQV 7KLVGLQQHU KDV VHUYHGDVD IRUXPIRUXVWRSURYLGHXSGDWHVRQYHWHUDQV¶ EHQHILWVSUR JUDPVDQGVHUYLFHV · 9HWHUDQV¶6HUYLFHV GHYRWHV DVLJQLILFDQWDPRXQWRIWLPHDGPLQLVWHULQJ 0*/&+YHWHUDQV¶EHQHILWVDQGVXEPLWWLQJ9$FODLPV7KLV\HDU IRXUIDPLOLHVUHFHLYHG&+EHQHILWVWRKHOSPHHWWKHLUEDVLFQHHGV 7KHWRWDODPRXQWRI&+EHQHILWVLVVXHGLQZDV:H DOVRVXEPLWWHGIRXUQHZ9$FODLPVDVZHOODVIROORZHGXS RQSUHYLRXVO\ VXEPLWWHGFODLPV%DVHGRQWKH9$¶VFXUUHQWILJXUHVYHWHUDQVDQGIDPL OLHVRI&KHVWHUILHOGUHFHLYH RQDQDQQXDOEDVLV )RUDQ\TXHVWLRQVRUWRVFKHGXOHDQDSSRLQWPHQWSOHDVHFDOO-- $VDOZD\VIHHOIUHHWRVWRSE\UHJXODUO\VFKHGXOHG+LOOWRZQKRXUV 5HVSHFWIXOO\<RXUV 7RP*HU\N9HWHUDQV¶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¶V%URDGEDQG1HWZRUN 7KH0/3ERDUGFRQVLVWVRI5RJHU)XOOHU3DWULFLD&ROVRQ-0RQWJRPHU\DQG 5REHUW5HFRV7KH0/30DQDJHULV-XVWLQ:HVWDQGWKH0/3:RUNLQJ *URXSFRQVLVWVRI/HH0DQFKHVWHU0DULDQQH'UDNH-DPHV6DFFHQWRDQG 'DYLG0DUVKDOO 2QFHFRQVWUXFWLRQLVFRPSOHWHDQ,QWHUQHW6HUYLFH3URYLGHU,63ZLOOSUR YLGHVXEVFULEHUVZLWKLQWHUQHWVHUYLFHZLWKVSHHGVLQWKHUDQJHRIJLJDELW $WWKLVSRLQWWKHUHLVQRFOHDUHVWLPDWHRIPRQWKO\VXEVFULSWLRQFRVWV :LUHG:HVWZLOOEHDFRQWHQGHUIRU,QWHUQHW6HUYLFH3URYLGHU7KH0/3UH PDLQVLQFRQWDFWZLWK:LUHG:HVWWKURXJKWKH7RZQ¶V:LUHG:HVWUHSUH VHQWDWLYH0DUN.OLW]NH7KHIROORZLQJLVKLVUHSRUW :LUHG:HVWFUHDWHGDQRQ-ELQGLQJPHPRUDQGXPRIXQGHUVWDQG LQJ028ZKLFKGHPRQVWUDWHVD7RZQ¶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¶VVHFWLRQRIWKH:HVWILHOG5LYHU OLHVDORQJWKH(DVW%UDQFKIURP&XPPLQJWRQWKURXJKWKH&KHVWHUILHOG *RUJHWR+XQWLQJWRQ 3URMHFWIXQGLQJLVSURYLGHGWKURXJKWKH1DWLRQDO3DUN6HUYLFH¶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¶3DUN&RPPLWWHH 7KH9HWHUDQV¶3DUN&RPPLWWHHVWDUWHGLQZLWK-LP0F6ZHHQ\DV FKDLU-LPDVNHGODQGVFDSHDUFKLWHFW1LFN'LQHVLIKHZRXOGGHVLJQWKH SDUN1LFNGHVLJQHG:LOOLDPVEXUJ&HQWHU$QJHO3DUNDQGWKH:LOOLDPV EXUJ9HWHUDQV¶0HPRULDO1LFNJUDFLRXVO\GRQDWHGKLVVHUYLFHVDQGFDPH XSZLWKDIHZRSWLRQV7KH&RPPLWWHHFKRVHDGHVLJQIRUWKHVLWHLPPHGL DWHO\HDVWRIWKH7RZQ+DOOEXLOGLQJDQGWKHSODQVZHUHGLVSOD\HGDWWKH -XO\WK3DUDGH -LPUHVLJQHGLQWKHVSULQJRIDQG'HH&LQQHUZDVHOHFWHGFKDLU 9HWHUDQV¶$JHQW7RP*HU\NKDVEHHQDWWHQGLQJPHHWLQJVUHJXODUO\DQG FRQWULEXWHGYDOXDEOHLQSXWDVKDVWKH7RZQ¶VFOHULFDODVVLVWDQW.ULV =GDQLHZLF]7KH&RPPLWWHHDSSURYHGRI7RP¶VLGHDRIVHOOLQJDFKLO GUHQ¶VERRNWLWOHG9HWHUDQV+HURHVLQRXU1HLJKERUKRRGDVDIXQG-UDLVHU VRPHDUHVWLOODYDLODEOH7KH&RPPLWWHHKDGDWDEOHDWWKLV\HDU¶V-XO\ WK3DUDGHDQGVKDUHGWKH&HQWUDO+DPSVKLUH9HWHUDQV¶6HUYLFHV¶WHQWDW WKH&XPPLQJWRQ)DLU$QLQIRUPDWLRQDOPHHWLQJZDVKHOG6HSWHPEHU DWWKH&RPPXQLW\&HQWHUWRH[SODLQWKHSODQV 1LFN'LQHVFRQWLQXHVWRZRUNZLWKXVDQGKDVSURYLGHGDGHWDLOHGFRVW DQDO\VLV8VLQJWKLVDVDEDVLVIRUDEXGJHW'HHDQG7RZQ$GPLQLVWUDWRU 6XH/DEULHDSSOLHGIRUDJUDQWIURPWKH0DVVDFKXVHWWV6WDWH+LV WRULFDO5HFRUGV$GYLVRU\%RDUG7KHJUDQWZDVDSSOLHGIRULQFROODERUDWLRQ ZLWK&HQWUDO+DPSVKLUH9HWHUDQV¶6HUYLFHV )UDQDQG/LQGD-XGGRI2ULJLQDO*RVKHQ6WRQHKDYHRIIHUHGWRGRQDWHDOO RIWKHSDYHPHQWVWRQH*DU\:DUQHURI*RVKHQ6WRQHKDVRIIHUHGWRGR QDWHDOORIWKHZDOOVWRQH5LFN5REHUWVLVGRQDWLQJDQDV\HWXQVSHFLILHG DPRXQWRIVLWHSUHSDUDWLRQZRUN%RRNVDOHVDQGFDVKGRQDWLRQVWKXVIDU WRWDO7KH&RPPLWWHHLVVWLOOVHHNLQJGRQDWLRQVRIFDVKYROXQWHHU WLPHDQGVHUYLFHV&KHFNVVKRXOGEHPDGHSD\DEOHWRWKH7RZQRI &KHVWHUILHOG9HWHUDQV¶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· /LDLVRQEHWZHHQ7RZQVDQG0DVV'(3RQFRPSOLDQFHPDWWHUV · ([HFXWLRQRIDQDQQXDO+RXVHKROG+D]DUGRXV:DVWH&ROOHFWLRQHYHQW · 3URJUDPPDQDJHPHQWRI7UDQVIHU6WDWLRQ5HF\FODEOHVLQFOXGLQJFRO OHFWLRQKDXOLQJDQGUHF\FOLQJRIWLUHVHOHFWURQLFZDVWHXQLYHUVDO ZDVWHLQFOXGLQJIUHHUHF\FOLQJRIPHUFXU\WKHUPRVWDWVDQGUH- FKDUJHDEOHEDWWHULHVDQG)UHRQUHPRYDOIURPDSSOLDQFHV · 7UDQVIHU6WDWLRQRSHUDWLRQVDQGFRPSOLDQFHPRQLWRULQJLQFOXGLQJLQIRU PDO+50&VLWHYLVLWVDVZHOODVWKHIRUPDODQQXDO'(3UG3DUW\,Q VSHFWLRQDQG5HSRUWLQJ · 3UHSDUDWLRQDQGVXEPLWWDORI'(3DQQXDOVXUYH\VDQGUHSRUWV ·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¶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¶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³LPSURYHWKHTXDOLW\RIOLIHIRUKLOOWRZQUHV LGHQWVE\DGGUHVVLQJHFRQRPLFKRXVLQJHGXFDWLRQDOVRFLDODQGFRPPXQL W\QHHGVZKLOHSUHVHUYLQJWKHUXUDOFKDUDFWHURIWKHDUHD´,WVFRUHVHUYLFH DUHDLQFOXGHVWKHWHQWRZQVRI&KHVWHU&KHVWHUILHOG&XPPLQJWRQ *RVKHQ+XQWLQJWRQ0LGGOHILHOG3ODLQILHOG:HVWKDPSWRQ:LOOLDPVEXUJ DQG:RUWKLQJWRQ,QUHFHQW\HDUVLWVVPDOOEXVLQHVVDVVLVWDQFHSURJUDP KDVH[SDQGHGWRVHUYH+LOOWRZQV +LOOWRZQ&'&¶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¶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· 7KH+HDOWK2XWUHDFK3URJUDPIRU(OGHUV+23(DGPLQLVWHUHGE\ +LOOWRZQ&RPPXQLW\+HDOWK&HQWHUV+&+&SURYLGHGIUHHLQ-KRPH QXUVLQJFDUHDQGSRGLDWULFVHUYLFHVWRKRPHERXQGHOGHUV · 7KH+LOOWRZQ)RRG3DQWU\ GLVWULEXWHGIRRGWRKLOOWRZQLQGLYLGXDOV7KH 3DQWU\LVDGPLQLVWHUHGE\WKH1RUWKDPSWRQ6XUYLYDO&HQWHU DWWKH *RVKHQ7RZQ+DOO · &KLOG&DUH6XEVLGLHVKLOOWRZQIDPLOLHVZHUHSURYLGHGVXEVLGLHV WKURXJKWKLVSURJUDPWRDVVLVWWKHPZLWKFKLOGFDUHH[SHQVHV (FRQRPLF'HYHORSPHQW6PDOO%XVLQHVV$VVLVWDQFH · 3URYLGHGLQGLYLGXDOL]HGEXVLQHVVFRQVXOWLQJDQGRUWUDLQLQJWRKLOOWRZQ EXVLQHVVHVUDQJLQJIURPRQHKRXUWRKRXUVSHUEXVLQHVV · 3XEOLVKHGWKH+LOOWRZQ%XVLQHVV'LUHFWRU\GLVWULEXWHGWR KLOOWRZQKRXVHKROGVLQWRZQVZLWKFRQWDFWLQIRUPDWLRQDQGGHVFULS WLRQVRIKLOOWRZQEXVLQHVVHVLQFDWHJRULHV7KH'LUHFWRU\LVDOVR RQ-OLQHDWZZZKLOOWRZQFGFRUJ $IIRUGDEOH+RXVLQJ:HDFWLYHO\SXUVXHRSSRUWXQLWLHVWRSUHVHUYHDQG FUHDWHDIIRUGDEOHKRXVLQJWRPHHWWKHQHHGVRIORZDQGPRGHUDWHLQFRPH +LOOWRZQUHVLGHQWV · :HVWKDPSWRQ:RRGV6HQLRU+RXVLQJ+LOOWRZQ&'&RZQVDQGRS HUDWHV:HVWKDPSWRQ:RRGV6HQLRU+RXVLQJZKLFKSURYLGHVDSDUW PHQWVIRUORZ-WR-PRGHUDWHLQFRPHVHQLRUVRYHU\HDUVROG · 5HQWDO+RXVLQJ+LOOWRZQ&'&FRPSOHWHGWKHUHQRYDWLRQRIXQLWVRI VFDWWHUHGDIIRUGDEOHUHQWDOKRXVLQJLQVL[SURSHUWLHVORFDWHGLQ :LOOLDPVEXUJ:HVWKDPSWRQDQG&KHVWHUILHOGLQ+LOOWRZQ&'& KLUHGDORFDOFRQWUDFWRUWRFRPSOHWHWKLVSURMHFW ·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· +LOOWRZQ&'&UHKDELOLWDWHGKRPHVLQWKH7RZQVRI:LOOLDPVEXUJ &XPPLQJWRQ&KHVWHUILHOG:HVWKDPSWRQ:LOOLDPVEXUJ3HUXDQG 3ODLQILHOG +LOOWRZQ&RPPXQLW\'HYHORSPHQW&RUSRUDWLRQ&RQW¶G &RPPXQLW\3ODQQLQJ:HDOVRZRUNFORVHO\ZLWKPXQLFLSDOLWLHVDQGFRPPX QLW\JURXSVLQRXUVHUYLFHDUHDWRSODQIRUUDLVHIXQGVIRUDQGRUPDQDJHD UDQJHRISURMHFWV'XULQJ+&'& · 7KURXJKH[WHQVLYHFRPPXQLW\HQJDJHPHQWDQGSODQQLQJ+LOOWRZQ&'& EHJDQRSHUDWLQJWKH)57$6HQLRU9DQLQSURYLGLQJHVVHQWLDOWUDQV SRUWDWLRQVHUYLFHVWRVHQLRUVLQWKHQRUWKHUQ+LOOWRZQV ·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¶V+DPSVKLUH3RZHUSURYLGHVHOHFWULFLW\VHUYLFHVLQFOXGLQJJUHHQDQG ORFDOO\SURGXFHGHOHFWULFLW\7KH+&*3XUFKDVLQJ&R-RSPDNHVLWHDV\IRU WRZQVFLWLHVDQGQRQSURILWVWRVDYHPRQH\WLPHDQGHIIRUWRQPDMRUDQG HYHU\GD\SXUFKDVHV+&*¶V*URXS,QVXUDQFH7UXVWKHOSVFRPPXQLWLHV NHHSKHDOWKLQVXUDQFHFRVWVORZ$QG+&*VXSSRUWVFRPPXQLWLHVZLWK XQLTXHO\HIIHFWLYHVHUYLFHSURJUDPV5693RIWKH3LRQHHU9DOOH\DQGWKH +DPSVKLUH-)UDQNOLQ7REDFFR-)UHH&RPPXQLW\3DUWQHUVKLS(YHU\FHQW +&*HDUQVJRHVEDFNWRVXSSRUWLQJWKHFRPPXQLWLHVRI:HVWHUQ0DVVD FKXVHWWV+&*LVIXQGHGE\LWVRZQUHYHQXHDQGJUDQWV )<—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¶G +&*3XUFKDVLQJ&R-RS 7KH3XUFKDVLQJ&R-RSDJJUHJDWHVEX\LQJSRZHUWRVDYHPRQH\WLPHDQG HIIRUW 'XULQJ)<WKH3XUFKDVLQJ&R-RSODXQFKHGWKUHHQHZELGVIRU+LJKZD\ -UHODWHGVHUYLFHVDQGSURGXFWV$QHZ7UHH6HUYLFHVELGZDVDOVRGHYHORSHG IRUXVHE\DUHDWRZQV:HFROODERUDWHGRQDSURJUDPWRDGGIUR]HQORFDO YHJHWDEOHVDVSDUWRIRXUDQQXDO6FKRRODQG&DIHWHULDELGDQGFRQGXFWHG UHVHDUFKLQWKHDUHDVRI+XPDQ5HVRXUFH6HUYLFHVDVZHOODV&XVWRGLDO 6XSSOLHVQHHGV1HZFXVWRPHUVDGGHGLQ)<LQFOXGHGVFKRROVWRZQV FRXQFLOVRQDJLQJDQGRWKHUQRQSURILWV7KH3XUFKDVLQJ&R-RSILQLVKHGLQ WKHEODFNIRUWKHILUVWWLPHHYHULQ)<DQGFRQWLQXHGWRJURZLQWHUPVRI WRWDOYDOXHRIJRRGVDQGVHUYLFHVVROG 7RWDOYDOXHRIJRRGVDQGVHUYLFHVVROG )<QHWUHVXOWV +&**URXS,QVXUDQFH7UXVW 7KH+DPSVKLUH&RXQW\*URXS,QVXUDQFH7UXVW*,7GHOLYHUVWKHKLJKHVW SRVVLEOHOHYHORIKHDOWKLQVXUDQFHEHQHILWVDWWKHORZHVWFRQVLVWHQWSULFH *,7SURYLGHVKHDOWKDQGOLIHLQVXUDQFHWRRYHULQGLYLGXDOV7KH*,7¶V UHYHQXHLQFUHDVHGIURPWRRYHUWKHSDVWILVFDO \HDUDLQFUHDVHRXWRI-PHPEHUWRZQVXVHWKH*,7LQSODFHRI WKHVWDWHSODQ0HPEHUWRZQVVHFXUHGPLOOLRQLQVDYLQJVWKURXJKWKH *,7 +DPSVKLUH,7 7KH+DPSVKLUH,7SURJUDPRIIHUV:HVWHUQ0DVVDFKXVHWWVWKHEHVWLQIRU PDWLRQWHFKQRORJ\VHUYLFHDWKLJKO\FRPSHWLWLYHUDWHV+DPSVKLUH,7LVD SDUWQHUVKLSZLWKWKHUHJLRQ¶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¶FDSDFLW\WRGR JUHDWZRUNWKURXJKIXQGUDLVLQJDQGSURJUDPVXSSRUW 3DUWQHU2UJDQL]DWLRQV9ROXQWHHUV9ROXQWHHU+RXUV6HUYHG 5693WUDLQHGYROXQWHHUVOHDGIUHHZHHNO\+HDOWK\%RQHV %DODQFHH[HU FLVHFODVVHVGHVLJQHGWRLQFUHDVHSDUWLFLSDQWV¶VWUHQJWKPRELOLW\IOH[LELOLW\ DQGEDODQFH +DPSVKLUH-)UDQNOLQ7REDFFR-)UHH&RPPXQLW\3DUWQHUVKLS 7KH+DPSVKLUH-)UDQNOLQ7REDFFR-)UHH&RPPXQLW\3DUWQHUVKLSKDVDPLV VLRQWRHQFRXUDJHDQGVXSSRUWVPRNHUVLQ)UDQNOLQDQG+DPSVKLUH&RXQW\ WRTXLW,WDOVRDLPVWRFUHDWHDZDUHQHVVRIKDUPIXOVPRNHOHVVWREDFFR SURGXFWVWKDWDUHRIWHQPDUNHWHGWRZDUGV\RXQJSHRSOH 1HZ6PRNH)UHH8QLWV 5HJLRQDO$FFRXQWLQJ $VSDUWRI+&*¶VPLVVLRQWRVHUYHRXUVPDOOHUFRPPXQLWLHVZHSURYLGHD UHJLRQDODFFRXQWLQJVHUYLFHWRWRZQVZLWKRXWPXQLFLSDODFFRXQWDQWV7KHVH ILQDQFLDOVHUYLFHVLQFOXGHWRZQDFFRXQWDQWVHUYLFHVERRNNHHSLQJDQGSD\D EOHV &RPPXQLW\ +&*DOVRVXSSRUWVWKHFRPPXQLW\E\SDUWLFLSDWLQJLQ · 7KH'RZQWRZQ1RUWKDPSWRQ$VVRFLDWLRQ · 7KH$ZHVRPH)RXQGDWLRQ · /HJLVODWLYH6XPPLW &KHVWHUILHOG &KHVWHUILHOGLVUHSUHVHQWHGE\&RXQFLORU5XVVHOO3HRWWHU %RDUGRI$VVHVVRUV ,QWKHVHFRQG\HDURIRXUF\FOLFDOUHLQVSHFWLRQZDVDEXV\\HDU $FRQ FHUWHGHIIRUWE\VWDWHRIILFLDOVRXUQHZDFFRXQWLQJWHDPHOHFWHGRIILFLDOVDQG WKHH[SHUWDVVLVWDQFHRIRXUFRQVXOWDQWV3DXO6.DSLQRV $VVRFLDWHVDO ORZHGXVWRKDYHRXUYDOXHVDQGWD[UDWHFHUWLILHGE\WKH6WDWHLQODWH1RYHP EHUZHOODKHDGRISDVW\HDUV 6DOHVSLFNHGXSDELWLQZLWK³DUPV-OHQJWK´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¶VSDJHRQWKH7RZQZHEVLWHZZZWRZQRIFKHVWHUILHOGPDFRP SURYLGHVXSWRGDWHDFFHVVWRSURSHUW\DVVHVVPHQWGDWDDVZHOODVPDSV DQGLQIRUPDWLRQDERXWOLQNVWRDSSOLFDWLRQVIRUDEDWHPHQWH[HPSWLRQVDQG FKDSWHUODQG 3URSHUW\UHFRUGFDUGVKDYHEHHQXSGDWHGWRUHIOHFW)< YDOXHV 2YHUWKLVSDVW\HDU&KHVWHUILHOG¶VUHDOSURSHUW\YDOXHVVDZOLWWOHFKDQJHRYHU DOO7KLVUHVXOWHGLQDVPDOOLQFUHDVHLQWKHDQQXDOWD[UDWHZKLFKZDVVHWDW IRU)<1HZJURZWKLQFUHDVHGWKH7RZQ¶VUHYHQXHVE\ $F\FOLFDOUHLQVSHFWLRQEHJDQLQVSULQJDVRXUILHOGDJHQWVEHJDQDUH TXLUHG\HDUF\FOLFDOYLVLWWRHDFKSURSHUW\LQWRZQ0DQ\SURSHUWLHVDUHYLV LWHGHDFK\HDUIRUSHUPLWFRPSOHWLRQLQVSHFWLRQVRUDVSDUWRIWKHDEDWHPHQW SURFHVV'XULQJWKHQH[W\HDUUHSUHVHQWDWLYHVIURPWKHDVVHVVRU¶VRIILFHZLOO EHYLVLWLQJHYHU\RWKHUSURSHUW\LQWRZQZKLFKKDVQRWEHHQVHHQZLWKLQWKH SULRU\HDUV 7KH%RDUGZRUNVKDUGWRSURYLGHIDLUDQGHTXLWDEOHYDOXDWLRQDQGSROLFLHVIRU DOORI&KHVWHUILHOG¶VWD[SD\HUV:HIHHOWKDWZHKDYHEHHQVXFFHVVIXOLQ PHHWLQJRXUUHVSRQVLELOLWLHVDQGLQSURYLGLQJWLPHO\VHUYLFHVWRRXUWD[SD\HUV EXWDOZD\VZHOFRPHWKHLQSXWRIRXUFRQVWLWXHQWV:HZLVKWRWKDQNHYHU\ RQHZKRKHOSHGDQGFRRSHUDWHGZLWKXVLQWKHFRPSOHWLRQRIRXUGXWLHV 5HVSHFWIXOO\<RXUV (GZDUG6HYHUDQFH&KDLU 0DU\$QQH6HYHUDQFH5\V&OHUN &U\VWDO$PHV$VVHVVRU .HOOH\+RSNLQV$GPLQLVWUDWLYH$VVLVWDQW &DSLWDO,PSURYHPHQW3ODQQLQJ&RPPLWWHH 7KH&DSLWDO,PSURYHPHQW3ODQQLQJ&RPPLWWHHPHWVHYHUDOWLPHVWRSUH SDUHWKH)<¶FDSLWDOEXGJHWDQGRXUHQVXLQJ-\HDUSURJUDP7KH&RP PLWWHHUHFHLYHGUHTXHVWVIRU)<¶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¶ 7KHDWWDFKHGVSUHDGVKHHWVKRZVWKHGHWDLOVRIWKH)<¶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¶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ucket Loader2006153%$130,000IIIII$3,900PP$17,000P$17,000P$17,000P$17,000F-550201253%5$85,000II$2,550I$2,040I$1,530I$1,020P$20,000P$20,000P$20,000P$20,000P$20,0002nd- 10 Wheel Dump Truck2007103%10$200,000I$6,000I$5,400I$4,800I$4,200I$3,600P$14,000P$14,000P$14,000P$14,000PBackhoe2016103%5$70,000I$1,680I$1,260I$840I$420IP$15,732P$15,732P$15,732P$15,732P$15,732Rep. 1st- 10 Wheel Dump Truck2012103%10$157,315I$2,360I$1,888I$1,416I$944I$472PPPPPYork Rake199825$8,000IIIIIPPPPPGrader2003203%10$250,000IIIIIP$8,310P$8,310PPPChipper2013153%5$41,548I$499I$249IIIPPP$8,000P$8,000P$8,000Highway Pick-up Truck201373%5$32,500III$1,200I$960I$720FIRE DEPARTMENTPPPPPFire Engine(E3)199030$225,000IIIIIP$15,677P$15,677P$15,677P$15,677P$15,677Midi Pumper (E1)2010203%15$250,000I$3,762I$3,292I$2,822I$2,352I$1,881P$13,586P$13,586P$13,586P$13,586P$13,586Fire Truck Pumper/Tanker(E2)2013203%15$135,980I$2,447I$2,040I$1,633I$1,226I$819PPPPPRescue 12004203%10$150,000IIIIIPPPPPChief's Vehicle2013103%10$39,405IIIIIFY2022FY2018FY2019FY2020FY20215 YEAR CAPITAL PLAN FY 2018 LENGTHMODELYEARS OFINTERESTOFTOTALYEARSERVICERATELOANCOSTPOLICE DEPARTMENTPPPP P$8,000Cruiser Crown Vic2011103%5$40,000IIII I$1,200P$9,000P$9,000P$9,000P$9,000P$9,0004 x 4 Cruiser2008103%5$45,000I$1,350I$1,080I$810I$540I$270BUILDINGSP$14,666P$14,666P$14,666P$14,666P$14,666Replacement Salt Shed303%15$220,000I$5,720I$5,280I$4,840I$4,400I$3,960P P P$60,000P$60,000P$60,000Fire Station 150'x40' = 6000sqft @ $300 psf403%30$1,800,000I I I$54,000I$52,200I$50,400PPPP$64,000P$64,000Town Office 160'x60' =9600sqft @ $200psf403%30$1,920,000IIII$57,600I$55,680PPPPPIIIIISCHOOL BUILDINGS MAINTENANCE STABILIZATION FUND (HRHS & NHRES)Prior Balance $25,008$32,000$20,000$10,000$5,000$5,000CAPITAL PROJECTS STABILIZATION FUNDprior balance $198,073$80,000$90,000$30,000$20,000$15,000FUTURE LAND ACQUISITION STABILIZATION FUNDPrior Balance $65,225$30,000$30,000$30,000$10,000$10,000SUB TOTAL:$5,799,748$276,789$291,010$332,062$413,033$412,583Free Cash $579,816Capital Projects Stabilization FundStabilization $249,572Regular Budget$276,789$291,010$332,062$413,033$412,583Hampshire Regional Building Renovations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¶V5HSRUW )LVFDO TaxTax Tax Type of Tax7/1/2016Tax LeviesPaymentsAbatementsTax LiensRefunds6/30/2017Real Estate201702,740,236$ -$2,611,504-$14,624-$26,35518,461$ $106,2132016$124,778-$66,779-$405$57,5952015$40,208-$23,270-$1,215$15,7232014$13,381-$8,121-$389$4,8712013$4,897-$4,481-$416$0 Total Real Estate$183,264$2,740,236-$2,714,156-$14,624-$28,780$18,461$184,401Personal Property2017$70,022-$69,868-$3,337$3,326$1432016$152-$110$422015$0$02014$19$192013$0$02012$9$9 Total Personal Property$180$70,022-$69,978-$3,337$0$3,326$213OutstandingOutstanding TaxTax Tax Type of Tax7/1/2016Tax LeviesPaymentsAbatementsTax LiensRefunds6/30/2017Motor Vehicle Excise2017$154,995-$128,497-$1,875$912$25,5342016$12,165$19,633-$29,473-$1,344$1,081$2,0622015$2,249$31-$1,497$7832014$1,592-$387-$295$9092013$385$3852012$267-$40$2272011$386$14-$94-$306$0 Total Motor Vehicle $17,044$174,673-$159,988-$3,821$0$1,993$29,901 2017Septic Betterments15,993.04$ -$15,501.23491.81$ Interest and penalties collected 27,936$ Respectfully submitted,Lenore PittsingerOutstandingOutstanding 7UHDVXUHU¶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iduciaryAccountGovernmental Fund TypesFund TypeGroupTotalsGeneral Fund Special Revenue FundsStabilization FundsCapital ProjectsTrust & Agency FundsLong Term DebtMemorandum OnlyASSETS:Cash & Investments916,443.79$ 482,291.34$ 538,759.93$ 41,590.35$ 203,265.44$ 2,182,350.85$ Personal Property Taxes211.57$ 211.57$ Real Estate Taxes184,402.71$ 184,402.71$ Allowance for Abate & Exemptions(64,160.06)$ (64,160.06)$ Tax Liens Receivable225,785.62$ 225,785.62$ Tax ForclosuresMotor Vehicle Excise29,902.41$ 29,902.41$ Assessments-Added to Taxes491.81$ 491.81$ Assessments-Not Yet Due56,346.67$ 56,346.67$ Notes Rec. Def. Pmnt. Loans1,613,095.08$ 1,613,095.08$ Due From Comm. Of Mass.16,892.94$ 16,892.94$ Amounts Prov for Pay of Bonds135,729.11$ 135,729.11$ TOTAL ASSETS1,309,478.98$ 2,152,224.90$ 538,759.93$ 41,590.35$ 203,265.44$ 135,729.11$ 4,381,048.71$ TOWN OF CHESTERFIELD, MASSACHUSETTSCOMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPJune 30, 2017 FiduciaryAccountGovernmental Fund TypesFund TypeGroupTotalsGeneral Fund Special Revenue FundsStabilization FundsCapital ProjectsTrust & Agency FundsLong Term DebtMemorandum OnlyLIABILITIES:Employee Withholdings9,626.37$ 9,626.37$ Notes & Bans Payable790,575.00$ 790,575.00$ Other Liabilities4,900.92$ 4,900.92$ Bonds Payable135,729.11$ 135,729.11$ Deferred Revenue:Property Tax120,454.22$ 120,454.22$ Tax Liens & Foreclosures225,785.62$ 225,785.62$ Motor Vehicle Excise29,902.41$ 29,902.41$ Assessments1,669,933.56$ 1,669,933.56$ Other Receivables16,892.94$ 16,892.94$ TOTAL LIABILITIES402,661.56$ 1,669,933.56$ -$ 790,575.00$ 4,900.92$ 135,729.11$ 3,003,800.15$ FUND BALANCES:Reserved for Encumbrances8,786.48$ 8,786.48$ Reserved for Expenditures42,030.00$ 42,030.00$ Reserved for Cont. Appropriations154,932.57$ 154,932.57$ Designated482,291.34$ 538,759.93$ (748,984.65)$ 198,364.52$ 470,431.14$ Undesignated701,068.37$ 701,068.37$ Undesignated-Deficits-$ TOTAL FUND BALANCES906,817.42$ 482,291.34$ 538,759.93$ (748,984.65)$ 198,364.52$ -$ 1,377,248.56$ TOTAL LIAB. & FUND BALANCES1,309,478.98$ 2,152,224.90$ 538,759.93$ 41,590.35$ 203,265.44$ 135,729.11$ 4,381,048.71$ TOWN OF CHESTERFIELD, MASSACHUSETTSSTATEMENT OF REVENUES AND EXPENDITURES -BUDGETARY BASIS - (NON-GAAP) -BUDGET AND ACTUAL - GENERAL FUNDFOR THE YEAR ENDED JUNE 30, 2017 ActualAmountsVariance withCarriedFinal Budget CarryOriginalFinalBudgetaryForwardPositive ForwardBudgetBudgetBasisto Next Year(Negative)Revenues: Property Taxes-$ 2,794,779.10$ 2,794,779.10$ 2,768,302.86$ -$ (26,476.24)$ Sale of Tax Foreclosure-$ -$ -$ 20,853.44$ -$ 20,853.44$ Excise & Other Taxes-$ 160,000.00$ 160,000.00$ 158,043.00$ -$ (1,957.00)$ Interest on Delinquent Taxes-$ 20,000.00$ 20,000.00$ 44,462.86$ -$ 24,462.86$ Charges for Services - Trash Disposal-$ 25,000.00$ 25,000.00$ 22,647.61$ -$ (2,352.39)$ Licenses, Permits & Fees-$ 26,000.00$ 26,000.00$ 16,271.06$ -$ (9,728.94)$ Other-$ 9,000.00$ 9,000.00$ 20,320.37$ -$ 11,320.37$ Fines & Forfeits-$ 500.00$ 500.00$ 3,212.50$ -$ 2,712.50$ Interest from Investments-$ 1,000.00$ 1,000.00$ 3,535.96$ -$ 2,535.96$ Intergovernmental-Comm. of Mass.-$ 337,808.00$ 337,808.00$ 330,783.27$ -$ (7,024.73)$ Total Revenues -$ 3,374,087.10$ 3,374,087.10$ 3,388,432.93$ -$ 14,345.83$ Expenditures: Current Fiscal Year: General Goverment-$ 344,667.00$ 337,314.08$ 304,487.50$ 3,439.99$ 29,386.59$ Protection of Persons & Property-$ 199,355.00$ 203,445.00$ 160,200.73$ 2,162.61$ 41,081.66$ Education-$ 1,871,683.00$ 1,871,683.00$ 1,851,268.92$ -$ 20,414.08$ Public Works-$ 458,978.00$ 473,167.96$ 452,277.52$ 2,457.05$ 18,433.39$ Health & Human Services-$ 40,026.00$ 42,716.97$ 40,521.31$ -$ 2,195.66$ Culture & Recreation-$ 29,961.00$ 30,057.95$ 29,343.04$ -$ 714.91$ State & Other Assessments-$ 18,428.00$ 18,428.00$ 9,279.28$ -$ 9,148.72$ Employee Benefits-$ 142,036.00$ 142,036.00$ 129,174.73$ 100.86$ 12,760.41$ General Insurance-$ 48,000.00$ 48,000.00$ 44,779.37$ -$ 3,220.63$ Budgeted Amounts ActualAmountsVariance withCarriedFinal Budget CarryOriginalFinalBudgetaryForwardPositive ForwardBudgetBudgetBasisto Next Year(Negative) Debt Service: Principal-$ 137,352.00$ 137,827.00$ 137,040.73$ -$ 786.27$ Interest and Fiscal Charges-$ 12,050.00$ 12,050.00$ 5,096.46$ -$ 6,953.54$ Special Articles-$ 67,350.00$ 119,360.00$ 42,580.00$ 76,767.36$ 12.64$ Total Current Fiscal Year Expenditures -$ 3,369,886.00$ 3,436,085.96$ 3,206,049.59$ 84,927.87$ 145,108.50$ Other Expenditures: Prior Year Articles114,448.56$ 1,000.00$ 1,000.00$ 36,392.35$ 78,165.21$ 891.00$ Prior Year Encumbrances49,749.18$ -$ -$ 49,122.76$ 625.97$ 0.45$ Total Other Expenditures164,197.74$ 1,000.00$ 1,000.00$ 85,515.11$ 78,791.18$ 891.45$ Total Expenditures164,197.74$ 3,370,886.00$ 3,437,085.96$ 3,291,564.70$ 163,719.05$ 145,999.95$ Excess of Revenues Over (Under) Expenditures(164,197.74)$ 3,201.10$ (62,998.86)$ 96,868.23$ (163,719.05)$ 160,345.78$ Other Financing Sources (Uses): Operating Transfers In-$ 31,226.00$ 31,226.00$ 31,658.63$ -$ 432.63$ Operating Transfers (Out)-$ 105,000.00$ 105,000.00$ 106,145.97$ -$ (1,145.97)$ Total Other Financing Sources (Uses)-$ (73,774.00)$ (73,774.00)$ (74,487.34)$ -$ (713.34)$ Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing Uses(164,197.74)$ (70,572.90)$ (136,772.86)$ 22,380.89$ (163,719.05)$ 159,632.44$ Audit Adjustments(9.14)$ Fund Balances, Beginning of Year884,445.67$ 884,445.67$ 884,445.67$ -$ -$ Fund Balances, End of Year(164,197.74)$ 813,872.77$ 747,672.81$ 906,817.42$ (163,719.05)$ 159,632.44$ Budgeted Amounts Fund BalancesJune 30, 2017Opening BalanceRevExpBalance/EntrySpecial Revenue:Federal Grants:Asst to Firefighter-$ -$ 16,512.00$ 16,512.00$ -$ Police Traffic Enforcement-$ 432.00$ -$ 432.00$ -$ NACCHO Grant11,433.86$ 9,787.20$ 3,500.00$ 1,853.34$ 11,433.86$ Police Bullet Proof Vests-$ (2,291.94)$ 2,291.94$ -$ -$ EMPG Grant2,807.21$ 2,807.21$ 2,460.00$ 2,460.00$ 2,807.21$ DHCD EDF Grant(100.00)$ 900.00$ 1,051,835.00$ 1,052,835.00$ (100.00)$ BOH Grant721.47$ 721.47$ -$ -$ 721.47$ COA HVES223.40$ 1.36$ 14,259.00$ 14,036.96$ 223.40$ State Grants: Chapter 90-$ 0.63$ 289,407.09$ 289,407.72$ -$ Elections560.00$ -$ 810.00$ 250.00$ 560.00$ Fire Safety Grant723.35$ 2,853.86$ -$ 2,130.51$ 723.35$ Yellow Bus-$ 200.00$ -$ 200.00$ -$ COA Formula Grant31.05$ 31.05$ 4,968.95$ 4,968.95$ 31.05$ COA HVES Caring Connect(510.00)$ (1,392.67)$ 8,536.82$ 7,654.15$ (510.00)$ COA Sig Grant(17,022.79)$ (35,646.48)$ 131,063.72$ 112,440.03$ (17,022.79)$ Arts Cultural Council4,045.40$ 3,750.40$ 4,400.00$ 4,105.00$ 4,045.40$ Library16,948.03$ 16,158.80$ 2,312.99$ 1,523.76$ 16,948.03$ Veterans Park Grant10,000.00$ -$ 10,000.00$ -$ 10,000.00$ BOH Recycling Program4,178.00$ -$ 4,400.00$ 222.00$ 4,178.00$ Solarization1,636.02$ 1,636.02$ -$ -$ 1,636.02$ DHCD EDF Admin330.75$ 330.75$ -$ -$ 330.75$ TOWN OF CHESTERFIELD, MASSACHUSETTSSCHEDULE OF SPECIAL REVENUEFOR THE YEAR ENDED JUNE 30, 2017 Fund BalancesJune 30, 2017Opening BalanceRevExpBalance/Entry Revolving Funds:Recreation 9,637.54$ 7,714.37$ 2,761.00$ 837.83$ 9,637.54$ BOH Revolving 741.60$ 1,079.37$ 337.77$ 675.54$ 741.60$ Planning Board93.50$ 58.50$ 195.00$ 160.00$ 93.50$ Dog Control2,684.31$ 3,618.80$ 2,161.00$ 3,095.49$ 2,684.31$ Zoning Board of Appeals268.38$ 251.02$ 341.70$ 324.34$ 268.38$ Conservation Wetland120.19$ 567.69$ 67.50$ 515.00$ 120.19$ Cemetery-Right to Bury31,053.37$ 30,453.37$ 600.00$ -$ 31,053.37$ Arts Lottery0.11$ -$ 0.11$ -$ 0.11$ Tax Title Collector5,146.56$ -$ 5,146.56$ -$ 5,146.56$ Law Enf. Trust972.50$ 972.50$ -$ -$ 972.50$ Cemetery6,692.30$ 6,133.36$ 1,875.00$ 1,316.06$ 6,692.30$ Police Detail(856.77)$ 406.63$ 10,202.00$ 11,465.40$ (856.77)$ Other Special Revenue:Septic Betterments III24,344.65$ 24,344.65$ -$ -$ 24,344.65$ WPAT Loan Repayment94,431.63$ 94,293.46$ 31,364.17$ 31,226.00$ 94,431.63$ Septic Repair Fund92,676.51$ 92,663.52$ 12.99$ -$ 92,676.51$ WPAT Interest42,680.43$ 42,346.30$ 334.13$ -$ 42,680.43$ Veterans Park Donations3,951.50$ -$ 3,951.50$ -$ 3,951.50$ Tree-Priority Needs-$ 260.39$ -$ 260.39$ -$ COA Gifts (Local)12,468.18$ 7,775.37$ 6,137.14$ 1,444.33$ 12,468.18$ Library Gift Fund702.76$ 652.76$ 50.00$ -$ 702.76$ Selectmen Gifts319.29$ -$ 1,000.00$ 680.71$ 319.29$ Senior Housing3,500.50$ 50.00$ 3,500.00$ 49.50$ 3,500.50$ MIIA Highway Equipment-$ -$ 2,500.00$ 2,500.00$ -$ DHCD Other Income51,835.55$ 61,536.61$ -$ 9,701.06$ 51,835.55$ DHCD Program Income62,821.00$ 59,541.31$ 11,095.19$ 7,815.50$ 62,821.00$ Stabilization Accounts:Stabilization250,034.69$ 249,259.32$ 775.37$ -$ 250,034.69$ Land Acquisition65,327.31$ 35,180.85$ 30,146.46$ -$ 65,327.31$ Capital Purchase Stabilization198,350.82$ 147,887.52$ 50,463.30$ -$ 198,350.82$ School Maintenance Stabilization25,047.11$ 5,002.50$ 20,044.61$ -$ 25,047.11$ Total Special Revenues1,063,967.27$ 872,329.83$ 1,731,820.01$ 1,583,098.57$ 1,021,051.27$ Fund BalancesJune 30, 2017Opening BalanceRevExpBalance/EntryCapital Projects: U/F/B-ATM 5/16 A4 10 Wheel Demp Truck(199,116.65)$ -$ -$ (199,116.65)$ (199,116.65)$ U/F/B-Highway Salt Shed(190,668.00)$ (205,334.00)$ 14,666.00$ -$ (190,668.00)$ U/F/B-Fire Midi Pumper(125,413.00)$ (141,090.00)$ 15,677.00$ -$ (125,413.00)$ U/F/B-Highway 10 Wheel Dump Truck(78,655.00)$ (94,387.00)$ 15,732.00$ -$ (78,655.00)$ U/F/B-Highway 1 Ton Truck-$ (10,333.00)$ 10,333.00$ -$ -$ U/F/B-Highway Pickup Truck-$ (5,600.00)$ 5,600.00$ -$ -$ U/F/B-Backhoe(56,000.00)$ (70,000.00)$ 14,000.00$ -$ (56,000.00)$ U/F/B-Fire Truck Pumper/Tanker(82,514.00)$ (96,100.00)$ 13,586.00$ -$ (82,514.00)$ U/F/B-Highway Wood Chipper(16,618.00)$ (24,928.00)$ 8,310.00$ -$ (16,618.00)$ U/F/B-FirePickup Truck-$ (7,440.00)$ 7,440.00$ -$ -$ Total Capital Projects(748,984.65)$ (655,212.00)$ 105,344.00$ (199,116.65)$ (748,984.65)$ TOWN OF CHESTERFIELD, MASSACHUSETTSCAPITAL PROJECTSFOR THE YEAR ENDED JUNE 30, 2017 Fund BalancesJune 30, 2017Opening BalanceRevExpBalance/EntryTrust Funds: Non-Expendable:Cemetery18,074.66$ 15,194.66$ 2,880.00$ -$ 18,074.66$ Dunham Tax26,206.34$ 26,206.55$ -$ 0.21$ 26,206.34$ H.P. Taylor10,000.00$ 10,000.00$ -$ -$ 10,000.00$ Olive Healy1,000.00$ 1,000.00$ -$ -$ 1,000.00$ Starkweather School500.00$ 500.00$ -$ -$ 500.00$ Whiting Street1,000.00$ 1,000.00$ -$ -$ 1,000.00$ Samuel Wright1,000.00$ 1,000.00$ -$ -$ 1,000.00$ Lucy Engram5,000.00$ 5,000.00$ -$ -$ 5,000.00$ George Baker1,586.74$ -$ 1,586.74$ -$ 1,586.74$ Expendable Trust:Cemetery2,752.86$ 4,819.24$ 380.58$ 2,446.96$ 2,752.86$ Dunham Tax15,482.74$ 15,478.53$ 4.21$ -$ 15,482.74$ H.P. Taylor9,421.33$ 9,419.30$ 2.04$ 0.01$ 9,421.33$ Olive Healy2,899.01$ 2,898.65$ 0.36$ -$ 2,899.01$ Starkweather School1,174.18$ 1,174.13$ 0.12$ 0.07$ 1,174.18$ Whiting Street9,840.72$ 9,575.31$ 265.41$ -$ 9,840.72$ Samuel Wright1,065.00$ 1,064.76$ 0.24$ -$ 1,065.00$ Lucy Engram4,089.13$ 4,088.16$ 0.97$ -$ 4,089.13$ George Baker27,848.11$ 26,418.38$ 1,429.73$ -$ 27,848.11$ Fobes - Cemetery14,188.81$ 14,170.42$ 18.39$ -$ 14,188.81$ Fobes - Library28,629.45$ 28,626.62$ 2.83$ -$ 28,629.45$ Elderly/Disabled1,252.17$ 1,662.00$ 2,690.17$ 3,100.00$ 1,252.17$ Affordable Housing Trust5,000.98$ 5,000.36$ 0.62$ -$ 5,000.98$ OPEB Trust10,352.29$ 5,000.00$ 5,352.29$ -$ 10,352.29$ Agency Funds:Firearms Overlay-FID Licenses687.50$ 750.00$ 3,050.00$ 3,112.50$ 687.50$ Due to Deputy Collector-$ (536.00)$ 3,272.00$ 2,736.00$ -$ Northern Hilltown Consortium4,213.42$ -$ 4,794.44$ 581.02$ 4,213.42$ Total Trust Funds203,265.44$ 189,511.07$ 25,731.14$ 11,976.77$ 203,265.44$ TOWN OF CHESTERFIELD, MASSACHUSETTSSCHEDULE OF TRUST FUNDS AND AGENCYFOR THE YEAR ENDED JUNE 30, 2017 Account NumberDescription Balance Forward Budget Budget RevisionsRevised BudgetExpendedBalanceClose Carry Forward GENERAL GOVERNMENT001-114-5110-0000Moderator Stipend113.00$ 113.00$ 113.00$ -$ 001-114-5700-0000Moderator Expenses200.00$ 200.00$ -$ 200.00$ 200.00$ 001-122-5110-0000Selectman Stipend6,759.00$ 6,759.00$ 6,759.00$ -$ 001-122-5240-0000Copier & Fax Expense2,000.00$ 2,000.00$ 1,110.06$ 889.94$ 889.94$ 001-122-5240-0002Major Repairs10,000.00$ 10,000.00$ 8,100.95$ 1,899.05$ 1,899.05$ 001-122-5300-0003Advertising Expense4,000.00$ 4,000.00$ 3,510.17$ 489.83$ 489.83$ 001-122-5300-0004IT Expense5,000.00$ 5,000.00$ 1,459.08$ 3,540.92$ 3,540.92$ 001-122-5340-0000Printing & Postage Expense1,200.00$ 1,200.00$ 399.63$ 800.37$ 800.37$ 001-122-5700-0000Selectmen Expense4,000.00$ 4,000.00$ 3,475.83$ 524.17$ 524.17$ 001-129-5110-0000Town Administrator Salary42,342.00$ 42,342.00$ 42,342.00$ -$ 001-129-5700-0000Town Administrator Expense1,250.00$ 1,250.00$ 1,222.52$ 27.48$ 27.48$ 001-131-5700-0000Finance Comm. Exp450.00$ 450.00$ 129.00$ 321.00$ 321.00$ 001-132-5700-0000Reserve Fund13,000.00$ (10,418.52)$ 2,581.48$ -$ 2,581.48$ 2,581.48$ 001-135-5110-0000Financial Clerk2,400.00$ 715.60$ 3,115.60$ 3,115.60$ -$ 001-135-5300-0000Audit13,500.00$ 13,500.00$ 13,500.00$ -$ 001-135-5300-0001Outsourced Accounting Services20,000.00$ 20,000.00$ 17,000.00$ 3,000.00$ 3,000.00$ 001-135-5420-0000Accountant's Expense2,896.00$ 2,896.00$ 2,895.27$ 0.73$ 0.73$ 001-141-5110-0000Assessors Stipend4,611.00$ 4,611.00$ 4,611.00$ -$ 001-141-5110-0001Asst. Assessor Salary13,784.00$ 13,784.00$ 13,784.00$ -$ 001-141-5420-0000Assessor Expense4,800.00$ 4,800.00$ 4,745.52$ 54.48$ 54.48$ 001-141-5300-0000Assessors Revaluation15,800.00$ 15,800.00$ 15,800.00$ -$ 001-145-5110-0000Treasurers Salary14,784.00$ 14,784.00$ 14,784.00$ -$ 001-145-5110-0001Assistant Treasurer Wages612.00$ 612.00$ 612.00$ -$ 001-145-5110-0002Clerical Support-Payroll4,182.00$ 4,182.00$ 4,170.24$ 11.76$ 11.76$ 001-145-5700-0000Treasurers Expenses2,000.00$ 1,000.00$ 3,000.00$ 3,000.00$ -$ 001-146-5110-0000Tax Collector Salary14,784.00$ 14,784.00$ 14,784.00$ -$ 001-146-5110-0001Assistant Tax Collector Wages1,456.00$ 1,456.00$ 1,456.00$ -$ 001-146-5700-0000Tax Collectors Expenses9,300.00$ 9,300.00$ 9,209.80$ 90.20$ 90.20$ 001-151-5300-0000Legal Services4,000.00$ 4,000.00$ 3,798.87$ 201.13$ 96.13$ 105.00$ 001-158-5300-0000Treasurer Tax Title Expense5,000.00$ 5,000.00$ 4,539.29$ 460.71$ 460.71$ 001-161-5110-0000Town Clerks Salary14,784.00$ 14,784.00$ 14,784.00$ -$ 001-161-5250-0000Town Clerk Street Listing300.00$ 300.00$ 300.00$ -$ 001-161-5700-0000Town Clerks Expenses500.00$ 500.00$ 482.66$ 17.34$ 17.34$ 001-162-5110-0000Board of Registar's Wages150.00$ 150.00$ 150.00$ -$ 001-162-5700-0000Election & Registration Expense2,100.00$ 2,100.00$ 2,080.76$ 19.24$ 19.24$ 001-171-5700-0000Conservation Expenses375.00$ 375.00$ 325.44$ 49.56$ 49.56$ 001-175-5110-0000Planning Board Stipends1,848.00$ 1,848.00$ 1,584.00$ 264.00$ 264.00$ 001-175-5700-0000Planning Board Expenses250.00$ 250.00$ 250.00$ 250.00$ 001-176-5700-0000Zoning Bd of Appeals Exp200.00$ 200.00$ -$ 200.00$ 200.00$ 001-192-5110-0000Building Inspector Salary8,532.00$ 8,532.00$ 8,532.00$ -$ 7RZQRI&KHVWHUILHOG *HQHUDO)XQG([SHQVH5HSRUW )RUWKH\HDUHQGHG-XQH 001-192-5110-0001Building Commissioner Salary8,532.00$ 8,532.00$ 8,532.00$ -$ 001-192-5110-0002Custodial Wages7,319.00$ 7,319.00$ 6,578.13$ 740.87$ 740.87$ 001-192-5110-0003General Maint. Wages4,141.00$ 4,141.00$ 1,686.85$ 2,454.15$ 2,454.15$ 001-192-5110-0004Grounds Maint. Wages2,563.00$ 2,563.00$ 801.35$ 1,761.65$ 1,761.65$ 001-192-5240-0000General Maint. Supplies4,500.00$ 4,500.00$ 3,347.25$ 1,152.75$ 1,152.75$ 001-192-5400-0000Electricity16,000.00$ 16,000.00$ 14,983.29$ 1,016.71$ 859.22$ 157.49$ 001-192-5400-0001Heat25,000.00$ 25,000.00$ 18,048.76$ 6,951.24$ 6,951.24$ 001-192-5700-0000Lawn Mowing Expense8,000.00$ 8,000.00$ 7,705.00$ 295.00$ 295.00$ 001-192-5700-0001Grounds Maint. Supplies200.00$ 200.00$ 39.59$ 160.41$ 160.41$ 001-192-5700-0002Telephone Expense7,500.00$ 7,500.00$ 7,320.26$ 179.74$ 179.74$ 001-192-5700-0003Telephone Connect-CTY1,350.00$ 1,350.00$ 1,000.00$ 350.00$ 350.00$ 001-192-5700-0004Custodial Supplies1,000.00$ 1,000.00$ 991.96$ 8.04$ 8.04$ 001-192-5700-0005Elevator Inspection Expense1,300.00$ 1,300.00$ 1,300.00$ 1,300.00$ 001-192-5700-0006Water Supply Maint.900.00$ 900.00$ 505.00$ 395.00$ 217.50$ 177.50$ 001-192-5700-0008Bldg. Comm. Expenses1,000.00$ 1,350.00$ 2,350.00$ 2,182.37$ 167.63$ 167.63$ 001-195-5700-0000Town Report Expenses1,100.00$ 1,100.00$ 1,100.00$ -$ 001-195-5700-0001Town Coord. Wages (paid as vendor)1,000.00$ 1,000.00$ 1,000.00$ -$ TOTAL GENERAL GOVERNMENT-$ 344,667.00$ (7,352.92)$ 337,314.08$ 304,487.50$ 32,826.58$ 29,386.59$ 3,439.99$ PUBLIC SAFETY001-210-5110-0000Police Chief Salary62,000.00$ 62,000.00$ 26,545.00$ 35,455.00$ 35,455.00$ 001-210-5110-0001Police Wages25,000.00$ 25,000.00$ 23,566.38$ 1,433.62$ 1,433.62$ 001-210-5300-0000Hampshire Reg. Lockup1,161.00$ 1,161.00$ 1,161.00$ -$ 001-210-5700-0000Police Expenses8,500.00$ 4,090.00$ 12,590.00$ 12,469.88$ 120.12$ 120.12$ 001-210-5700-00014th of July Police Expense1,300.00$ 1,300.00$ 1,300.00$ -$ 001-220-5110-0000Fire Chief Salary (stipend)6,120.00$ 6,120.00$ 6,120.00$ -$ 001-220-5110-0001Deputy Chief's Stipend639.00$ 639.00$ 639.00$ -$ 001-220-5110-0002Fire Dept Incentive9,000.00$ 9,000.00$ 6,850.14$ 2,149.86$ 6.13$ 2,143.73$ 001-220-5190-0000Fire Other Personal Services-$ -$ 001-220-5700-0000Fire Dept. Expenses20,000.00$ 20,000.00$ 18,290.01$ 1,709.99$ 1,709.99$ 001-231-5190-0000Ambulance Service46,940.00$ 46,940.00$ 46,553.00$ 387.00$ 387.00$ 001-243-5110-0000Plumbing Inspector Salary1,899.00$ 1,899.00$ 1,899.00$ -$ 001-243-5700-0000Plumbing Inspection Exp210.00$ 210.00$ 210.00$ -$ 001-245-5110-0000Wiring Inspectors Salary1,899.00$ 1,899.00$ 1,899.00$ -$ 001-245-5700-0000Wiring Inspectors Expenses500.00$ 500.00$ -$ 500.00$ 500.00$ 001-249-5300-0000Tree Maint & Removal Expenses8,000.00$ 8,000.00$ 8,000.00$ -$ 001-249-5700-0000Tree Warden Expense1,000.00$ 1,000.00$ 950.54$ 49.46$ 30.58$ 18.88$ 001-291-5110-0000Emergency Management Salary (stipen2,719.00$ 2,719.00$ 2,719.00$ -$ 001-291-5110-0001EOC Operations & Training500.00$ 500.00$ -$ 500.00$ 500.00$ 001-291-5240-0000Emergency Generator Management800.00$ 800.00$ 660.78$ 139.22$ 139.22$ 001-291-5300-0000Hamp. Reg. Emerg. Planning Committee150.00$ 150.00$ 150.00$ -$ 001-291-5700-0000Emergency Manage. Exp800.00$ 800.00$ 800.00$ 800.00$ 001-292-5110-0000Animal Inpsector218.00$ 218.00$ 218.00$ -$ TOTAL PUBLIC SAFETY-$ 199,355.00$ 4,090.00$ 203,445.00$ 160,200.73$ 43,244.27$ 41,081.66$ 2,162.61$ Account NumberDescription Balance Forward Budget Budget RevisionsRevised BudgetExpendedBalanceClose Carry Forward EDUCATION001-300-5110-0000School Committee Salary1,560.00$ 1,560.00$ 1,298.44$ 261.56$ 261.56$ 001-350-5700-0010Chesterfield/Goshen Regional706,470.00$ 706,470.00$ 706,470.00$ -$ 001-350-5700-0011Chesterfield/Goshen Reg. Debt Services25,808.00$ 25,808.00$ 25,808.00$ -$ 001-350-5700-0020Hampshire Regional728,191.00$ 728,191.00$ 728,191.00$ -$ 001-350-5700-0021Hamphire Reg. Debt49,233.00$ 49,233.00$ 49,233.00$ -$ 001-350-5700-0030Smith Vocation Tuition322,640.00$ 322,640.00$ 302,488.28$ 20,151.72$ 20,151.72$ 001-350-5700-0031Smith Vocational Transportation37,781.00$ 37,781.00$ 37,780.20$ 0.80$ 0.80$ TOTAL EDUCATION-$ 1,871,683.00$ -$ 1,871,683.00$ 1,851,268.92$ 20,414.08$ 20,414.08$ -$ PUBLIC WORKS001-422-5110-0000Highway Superintendent Salary61,200.00$ 61,200.00$ 61,200.00$ -$ 001-422-5110-0001Highway Wages94,489.00$ 94,489.00$ 89,284.63$ 5,204.37$ 5,204.37$ 001-422-5400-0000Highway Gas & Diesel Expense38,925.00$ 38,925.00$ 30,902.77$ 8,022.23$ 8,022.23$ 001-422-5700-0000General Highway Expense39,000.00$ 39,000.00$ 38,847.92$ 152.08$ 72.08$ 80.00$ 001-422-5240-0001Highway Machinery27,000.00$ 27,000.00$ 26,279.90$ 720.10$ 720.10$ 001-422-5240-0000Gravel Roads Expense24,000.00$ 24,000.00$ 23,909.13$ 90.87$ 90.87$ 001-422-5240-0002Road Sealing Expense50,000.00$ 50,000.00$ 49,590.31$ 409.69$ 132.64$ 277.05$ 001-422-5240-0003Road Lining Expense6,000.00$ 6,000.00$ 6,000.00$ -$ 001-423-5110-0000Highway Winter Wages16,000.00$ 16,000.00$ 15,410.93$ 589.07$ 589.07$ 001-423-5700-0000Highway Winter Expenses50,000.00$ 14,189.96$ 64,189.96$ 64,189.96$ -$ 001-424-5700-0000Street Lighting2,500.00$ 2,500.00$ 2,326.07$ 173.93$ 173.93$ 001-429-5700-0000Wired West Assessment1,000.00$ 1,000.00$ 1,000.00$ -$ 001-429-5700-0001Wired West Expenses500.00$ 500.00$ 500.00$ 500.00$ 001-430-5110-0000Transfer Station Wages8,364.00$ 8,364.00$ 8,134.84$ 229.16$ 229.16$ 001-430-5700-0000Transfer Station Expenses25,000.00$ 25,000.00$ 20,897.50$ 4,102.50$ 2,002.50$ 2,100.00$ 001-491-5110-0000Supt.of Cemeteries Wages3,000.00$ 3,000.00$ 2,463.13$ 536.87$ 536.87$ 001-491-5700-0000Cemetery Expenses12,000.00$ 12,000.00$ 11,840.43$ 159.57$ 159.57$ TOTAL PUBLIC WORKS-$ 458,978.00$ 14,189.96$ 473,167.96$ 452,277.52$ 20,890.44$ 18,433.39$ 2,457.05$ HUMAN SERVICES001-510-5110-0000Board of Health Salary1,407.00$ 1,407.00$ 1,407.00$ -$ 001-510-5300-0000Testing Monitoring Wells3,100.00$ 3,100.00$ 2,700.00$ 400.00$ 400.00$ 001-510-5300-0001Hilltown Resource Manag. Coop.3,880.00$ 3,880.00$ 3,876.70$ 3.30$ 3.30$ 001-510-5700-0000Board of Health Expenses900.00$ 900.00$ 258.00$ 642.00$ 642.00$ 001-510-5700-0001Hazardous Waste Day Expenses800.00$ 800.00$ 800.00$ 800.00$ 001-541-5110-0000Council on Aging Director6,830.00$ 1.08$ 6,831.08$ 6,830.78$ 0.30$ 0.30$ 001-541-5240-0000Council on Aging Expenses3,100.00$ 3,100.00$ 3,099.94$ 0.06$ 0.06$ 001-541-5700-0001Elderly & Disabled Tax Relief Commi600.00$ 600.00$ 600.00$ -$ 001-543-5700-0001Veterans Services District5,109.00$ 5,109.00$ 4,859.00$ 250.00$ 250.00$ 001-543-5770-0000Veterans Benefits14,200.00$ 2,689.89$ 16,889.89$ 16,889.89$ -$ 001-549-5700-0000Right to Farm Commission100.00$ 100.00$ -$ 100.00$ 100.00$ TOTAL HUMAN SERVICES-$ 40,026.00$ 2,690.97$ 42,716.97$ 40,521.31$ 2,195.66$ 2,195.66$ -$ 7RZQRI&KHVWHUILHOG *HQHUDO)XQG([SHQVH5HSRUW )RUWKH\HDUHQGHG-XQH CULTURE & RECREATION001-610-5110-0000Librarian Salary14,784.00$ 14,784.00$ 14,784.00$ -$ 001-610-5110-0001Library Aid Wages2,382.00$ 96.95$ 2,478.95$ 2,478.95$ -$ 001-610-5300-0000Library C/W Mars Affiliation2,000.00$ 2,000.00$ 1,984.97$ 15.03$ 15.03$ 001-610-5700-0000Library Expenses5,945.00$ 5,945.00$ 5,848.05$ 96.95$ 96.95$ 001-691-5700-0000Historical Commission Expenses1,000.00$ 1,000.00$ 997.69$ 2.31$ 2.31$ 001-692-5700-0000Memorial Day Expenses100.00$ 100.00$ 100.00$ 100.00$ 001-692-5700-0001Fourth of July Expenses500.00$ 500.00$ 500.00$ 500.00$ 001-699-5700-0000Recreation Commission Expenses3,250.00$ 3,250.00$ 3,249.38$ 0.62$ 0.62$ TOTAL CULTURE & RECREATION-$ 29,961.00$ 96.95$ 30,057.95$ 29,343.04$ 714.91$ 714.91$ -$ DEBT001-710-5910-0000Midi - Pumper Principal15,677.00$ 15,677.00$ 15,677.00$ -$ 001-710-5910-0004Backhoe Principal14,000.00$ 14,000.00$ 14,000.00$ -$ 001-710-5910-0006Dump Truck Principal15,732.00$ 15,732.00$ 15,732.00$ -$ 001-710-5910-0007WPAT Bonds I Principal10,868.00$ 10,868.00$ 10,868.00$ -$ 001-710-5910-0008WPAT Bonds II Principal10,829.00$ 10,829.00$ 10,828.73$ 0.27$ 0.27$ 001-710-5910-0009WPAT Bonds III Principal9,525.00$ 475.00$ 10,000.00$ 10,000.00$ -$ 001-710-5910-0010550 HWY Truck Principal10,344.00$ 10,344.00$ 10,333.00$ 11.00$ 11.00$ 001-710-5910-0011Fire Truck Pumper/Tanker Principal13,586.00$ 13,586.00$ 13,586.00$ -$ 001-710-5910-0012HWY Pickup Truck Principal5,600.00$ 5,600.00$ 5,600.00$ -$ 001-710-5910-0013HWY Salt Shed Principal14,666.00$ 14,666.00$ 14,666.00$ -$ 001-710-5910-0014HWY Chipper Principal8,310.00$ 8,310.00$ 8,310.00$ -$ 001-710-5910-0015FD Chief's Vehicle Principal7,442.00$ 7,442.00$ 7,440.00$ 2.00$ 2.00$ 001-710-5910-0017Ambulance Debt Service Principal773.00$ 773.00$ 773.00$ 773.00$ TOTAL PRINCIPAL-$ 137,352.00$ 475.00$ 137,827.00$ 137,040.73$ 786.27$ 786.27$ -$ 001-751-5915-0000Midi - Pumper Interest2,000.00$ 2,000.00$ 1,097.45$ 902.55$ 902.55$ 001-751-5915-0004Backhoe Interest1,500.00$ 1,500.00$ 544.48$ 955.52$ 955.52$ 001-751-5915-0006Dump Truck Interest1,500.00$ 1,500.00$ 734.17$ 765.83$ 765.83$ 001-751-5915-0010550 HWY Truck Interest250.00$ 250.00$ 80.37$ 169.63$ 169.63$ 001-751-5915-0011Fire Truck Pumper/Tanker Interest1,500.00$ 1,500.00$ 747.50$ 752.50$ 752.50$ 001-751-5915.0012HWY Pickup Truck Interest125.00$ 125.00$ 43.56$ 81.44$ 81.44$ 001-751-5915-0013HWY Salt Shed Interest4,000.00$ 4,000.00$ 1,597.16$ 2,402.84$ 2,402.84$ 001-751-5915-0014HWY Chipper Interest500.00$ 500.00$ 193.90$ 306.10$ 306.10$ 001-751-5915-0015FD Chief's Vehical Interest175.00$ 175.00$ 57.87$ 117.13$ 117.13$ 001-752-5925-0000Interest on Short Term500.00$ 500.00$ -$ 500.00$ 500.00$ TOTAL INTEREST-$ 12,050.00$ -$ 12,050.00$ 5,096.46$ 6,953.54$ 6,953.54$ -$ TOTAL DEBT-$ 149,402.00$ 475.00$ 149,877.00$ 142,137.19$ 7,739.81$ 7,739.81$ -$ ASSESSMENTS001-820-5640-0000Air Polution Control Distr742.00$ 742.00$ 371.00$ 371.00$ 371.00$ 001-820-5646-0000RMV Surcharge3,000.00$ 3,000.00$ 1,080.00$ 1,920.00$ 1,920.00$ 001-820-5663-0000Regional Transit Charge1,262.00$ 1,262.00$ 631.00$ 631.00$ 631.00$ 001-820-5667-0000STRAP Repayment12,000.00$ 12,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 001-830-5621-0000Hampshire Council of Governments750.00$ 750.00$ 523.69$ 226.31$ 226.31$ 001-830-5621-0001Hamp County Emergency Comm486.00$ 486.00$ 485.71$ 0.29$ 0.29$ 001-830-5690-0001Regional Planning Agency/Comm.188.00$ 188.00$ 187.88$ 0.12$ 0.12$ TOTAL ASSESSMENTS-$ 18,428.00$ -$ 18,428.00$ 9,279.28$ 9,148.72$ 9,148.72$ -$ Account NumberDescription Balance Forward Budget Budget RevisionsRevised BudgetExpendedBalanceClose Carry Forward EMPLOYEE BENEFITS001-911-5690-0001Contributory Retirement70,731.00$ 70,731.00$ 70,731.00$ -$ 001-911-5690-0002Non-Contributory Retirement385.00$ 385.00$ 384.97$ 0.03$ 0.03$ 001-913-5780-0000Unemployment Insurance1,000.00$ 1,000.00$ 278.30$ 721.70$ 620.84$ 100.86$ 001-914-5150-0000Health Insurance - Town Share63,820.00$ 63,820.00$ 52,763.04$ 11,056.96$ 11,056.96$ 001-916-5150-0000Medicare - Town Share6,100.00$ 6,100.00$ 5,017.42$ 1,082.58$ 1,082.58$ TOTAL EMPLOYEE BENEFITS-$ 142,036.00$ -$ 142,036.00$ 129,174.73$ 12,861.27$ 12,760.41$ 100.86$ OTHER INSURANCE001-945-5740-0000General Insurance & Bonds48,000.00$ 48,000.00$ 44,779.37$ 3,220.63$ 3,220.63$ TOTAL OTHER INSURANCE-$ 48,000.00$ -$ 48,000.00$ 44,779.37$ 3,220.63$ 3,220.63$ -$ TOTAL BUDGET -$ 3,302,536.00$ 14,189.96$ 3,316,725.96$ 3,163,469.59$ 153,256.37$ 145,095.86$ 8,160.51$ FY17 ARTICLES001-122-5300-9004ATM 5/16 A12 Town Complex Study20,000.00$ 20,000.00$ 5,000.00$ 15,000.00$ 15,000.00$ 001-210-5850-9000ATM 5/17 A2 2 New Safes1,400.00$ 1,400.00$ 1,399.98$ 0.02$ 0.02$ 001-210-5870-9001ATM 5/17 A3 10 Handguns5,610.00$ 5,610.00$ 438.00$ 5,172.00$ 5,172.00$ 001-220-5870-9003ATM 5/16 A11 Fire Dept Turnout Gear8,500.00$ 8,500.00$ 8,500.00$ -$ 001-422-5240-9000ATM 5/16 A8 Ireland St Guard Rails26,000.00$ 26,000.00$ 25,987.38$ 12.62$ 12.62$ 001-422-5840-9001ATM 5/17 Irland St Bridge - R-O-W Ex45,000.00$ 45,000.00$ 45,000.00$ 45,000.00$ 001-491-5240-9002ATM 5/16 A10 Cemetery Repairs10,500.00$ 10,500.00$ 754.64$ 9,745.36$ 9,745.36$ 001-491-5300-9001ATM 5/16 A9 Cem. Surv Burial Plots2,350.00$ 2,350.00$ 500.00$ 1,850.00$ 1,850.00$ TOTAL SPECIAL ARTICLES-$ 67,350.00$ 52,010.00$ 119,360.00$ 42,580.00$ 76,780.00$ 12.64$ 76,767.36$ TOTAL FY2017 BUDGET & ARTICLES-$ 3,369,886.00$ 66,199.96$ 3,436,085.96$ 3,206,049.59$ 230,036.37$ 145,108.50$ 84,927.87$ TRANSFERS TO OTHER FUNDS001-992-5962-0000Transfers to Special Reve100,000.00$ 100,000.00$ 101,145.97$ (1,145.97)$ (1,145.97)$ 001-996-5966-0000Transfers to Trust5,000.00$ 5,000.00$ 5,000.00$ -$ TOTAL TRANSFERS TO OTHER FUNDS-$ 105,000.00$ -$ 105,000.00$ 106,145.97$ (1,145.97)$ (1,145.97)$ -$ TOTAL ALL FY2017 BUDGET & ARTICLES-$ 3,474,886.00$ 66,199.96$ 3,541,085.96$ 3,312,195.56$ 228,890.40$ 143,962.53$ 84,927.87$ FY16 & PRIOR ARTICLES CARRIED FORWARD001-122-5840-9001STM 6/30/15 Art 2 Major Infras Rep32,863.61$ 32,863.61$ 19,106.83$ 13,756.78$ 13,756.78$ 001-122-5840-9000Davenport Major Repairs29,900.78$ 29,900.78$ 5,930.00$ 23,970.78$ 23,970.78$ 001-145-5300-9000ATM 5/11/15 Art 24 Bond Counsel3,500.00$ 3,500.00$ 3,500.00$ 3,500.00$ 001-161-5300-9000Pres. & Storage Documents12,607.04$ 12,607.04$ 1,056.94$ 11,550.10$ 11,550.10$ 001-220-5870-9000Fire Hydrants8,000.00$ 1,000.00$ 9,000.00$ 9,000.00$ 9,000.00$ 001-422-5820-9000ATM 5/11/15 Art 14 Hwy Garage Renov6,390.14$ 6,390.14$ 318.70$ 6,071.44$ 6,071.44$ 001-422-5840-9000Design Eng. For Rte 1434,996.87$ 4,996.87$ 1,684.49$ 3,312.38$ 3,312.38$ 001-422-5870-9000ATM 5/11/15 Art 11 Highway Sander891.00$ 891.00$ 891.00$ 891.00$ 001-491-5240-9000Cemetery Rep - Ireland/Gate5,193.63$ 5,193.63$ 5,193.63$ 5,193.63$ 001-491-5240-9001ATM 5/11/15 Art 10 Cemetery Repairs8,295.39$ 8,295.39$ 8,295.39$ -$ 001-691-5300-9000ATM 5/11/15 Art 9 Hist. Prop. Surv.1,810.10$ 1,810.10$ 1,810.10$ 1,810.10$ TOTAL FY16 & PRIOR ARTICLES114,448.56$ 1,000.00$ -$ 115,448.56$ 36,392.35$ 79,056.21$ 891.00$ 78,165.21$ 7RZQRI&KHVWHUILHOG *HQHUDO)XQG([SHQVH5HSRUW )RUWKH\HDUHQGHG-XQH FY16 ENCUMBRANCES001-122-5300-8000ENC-Scanlon & Associates13,500.00$ 13,500.00$ 13,500.00$ -$ 001-122-5700-8000ENC-First Cong. Church162.50$ 162.50$ 162.50$ -$ 001-192-5240-8000ENC - Cummington Supply58.80$ 58.80$ 58.80$ -$ 001-192-5240-8001ENC-Larochelle Construction6,942.88$ 6,942.88$ 6,942.88$ -$ 001-220-5190-8000ENC-Firefighter's Incentive7,500.00$ 7,500.00$ 6,873.58$ 626.42$ 0.45$ 625.97$ 001-220-5700-8000ENC-Gleason Fire Equipment618.00$ 618.00$ 618.00$ -$ 001-350-5700-8000ENC-Chesterfield/Goshen Regional20,967.00$ 20,967.00$ 20,967.00$ -$ TOTAL FY16 ENCUMBRANCES49,749.18$ -$ -$ 49,749.18$ 49,122.76$ 626.42$ 0.45$ 625.97$ TOTAL BUDGET, ARTICLES & ENCUMBRANCES164,197.74$ 3,475,886.00$ 66,199.96$ 3,706,283.70$ 3,397,710.67$ 308,573.03$ 144,853.98$ 163,719.05$ 7RZQRI&KHVWHUILHOG 0DLQ5RDG 32%R[ &KHVWHUILHOG0$ ZZZWRZQRIFKHVWHUILHOGPDFRP 3KRQH - )D[ - 9HWHUDQV¶0HPRULDO3DUN3ODQV