Preliminary Official Statement Dated November 24, 2015

PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER 24, 2015

NEW ISSUE: Book Entry Only Rating: S&P: “___” (See “RATING” herein) In the opinion of Squire Patton Boggs (US) LLP, Bond Counsel, under existing law, INTEREST ON THE SERIES 2015 BONDS IS NOT EXCLUDED FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES. For a more complete discussion of the tax aspects, see “TAX MATTERS” herein.

$8,000,000 PUBLIC FINANCE AUTHORITY REVENUE BONDS (NEW YORK STATE ASSOCIATION OF COUNTIES QUALIFIED ENERGY CONSERVATION BOND FINANCING PROGRAM), SERIES 2015A (FEDERALLY TAXABLE) Dated: Date of Delivery Due: December 15, as shown below liminary Official Statement constitute an liminary Officialconstitute Statement This Official Statement has been prepared in connection with the issuance and delivery by the Public Finance Authority (the “Authority”) of its Revenue Bonds (New York State Association of Counties (“NYSAC”) Qualified Energy Conservation Bond Financing Program), Series 2015A (Federally Taxable) (the “Series

unlawful prior to registration or qualification qualification or to registration prior unlawful 2015 Bonds”). Simultaneously with the issuance of the Series 2015 Bonds, proceeds of the Series 2015 Bonds will be loaned to the Counties of Oneida, Onondaga and Wayne of the State of New York (each a “New York County” or a “County”) pursuant to separate loan agreements to be executed by the Authority and each New York County, dated as of November 1, 2015 (each, a “Loan Agreement” and collectively, the “Loan Agreements”) and each New York County will deliver to the Authority its General Obligation Bonds, Series 2015 (Qualified Energy Conservation Bonds) (collectively, the “New York County Bonds”). Each County is issuing its New York County Bonds to finance energy efficient projects eligible for subsidies in whole or in part under the Qualified Energy Conservation Bond Program authorized under the American Recovery and Reinvestment Act of 2009 but no portion of such subsidy shall be pledged to the repayment of the Series 2015 Bonds. The Series 2015 Bonds, however, are not qualified energy conservation bonds. Each County is required to pledge its faith and credit to the payment of principal of and interest on its New York County Bonds that it delivers to the Authority and is required under the laws of the State of New York, subject to certain statutory limitations described herein, to levy and collect ad valorem taxes on all taxable real property in such County for such payment. As more fully set forth in this Official Statement, payments of principal and interest on the New York County Bonds received by the Authority are scheduled to be sufficient to pay, when due, and to be applied by the Authority to pay, principal of and interest on the Series 2015 Bonds. The beneficiaries of the Series 2015 Bonds are: ONEIDA COUNTY ONONDAGA COUNTY WAYNE COUNTY Under no circumstances shall this Pre The Series 2015 Bonds will be special obligations of the Authority payable solely from and secured by a pledge of certain payments to be made by each County pursuant to the Loan Agreement between the Authority and such County and by all funds and accounts established under the Trust Indenture (as herein defined). Each County is required under its Loan Agreement to deliver its New York County Bonds to the Authority to provide for the repayment of the Loan to be

hich such offer, solicitation, or sale would be solicitation, hich such offer, made to the County by the Authority from the proceeds of the Series 2015 Bonds. No County is required to make payments on behalf of any other County. A default by any County under its New York County Bond could result in a default on the Series 2015 Bonds. (See “SECURITY FOR THE BONDS” herein.) The Series 2015 Bonds will be issued in fully registered form only, without coupons, in denominations of $5,000 or any integral multiple thereof. Interest (due on each June 15 and December 15, commencing June 15, 2016) on the Series 2015 Bonds will be payable by The Bank of New York Mellon, as trustee (the “Trustee”), by check or draft mailed to the registered owners of the Series 2015 Bonds at their addresses as shown on the registration books held by the Trustee or, at the option of a registered owner of at least $1,000,000 in principal amount of the Series 2015 Bonds, by wire transfer to such owner, not less than five (5) days prior to the Record Date immediately preceding an interest payment date. The principal of and redemption premium of the Series 2015 Bonds will be payable upon presentation and surrender at the principal corporate trust office of the Trustee. The Series 2015 Bonds will be issued initially under a Book-Entry Only System registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”). Purchasers of the Series 2015 Bonds will not receive certificates representing their interest in the Series 2015 Bonds purchased. So long as DTC or its nominee is the registered owner of the Series 2015 Bonds, payments of principal

ities, in any jurisdiction in w ities, in any jurisdiction of and interest on such Series 2015 Bonds will be made directly to DTC or its nominee, which will in turn remit such principal and interest, to its Participants (as defined herein), which will in turn remit such principal and interest, to the Beneficial Owners (as defined herein) of the Series 2015 Bonds. The Series 2015 Bonds will bear interest from their dated date to their maturity at the applicable rate set forth below. AMOUNTS, INTEREST RATES, MATURITIES, PRICES OR YIELDS AND CUSIPS (See Inside Cover) The Series 2015 Bonds are subject to optional redemption prior to maturity as set forth in this Official Statement. THE SERIES 2015 BONDS ARE NOT AN OBLIGATION OR DEBT OF NYSAC, AND EXCEPT AS OTHERWISE PROVIDED HEREIN WITH RESPECT TO THE OBLIGATIONS OF EACH NEW YORK COUNTY UNDER ITS OWN NEW YORK COUNTY BONDS: (I) THE SERIES 2015 BONDS ARE d herein are subject to completion without notice. are amendment d herein or SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM PLEDGED REVENUES AND, IF ANY, SUCH OTHER FUNDS AND AMOUNTS PLEDGED FOR THEIR PAYMENT PURSUANT TO THE INDENTURE AND EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY,

ere be these secur ere any sale of ANY MEMBER, ANY SPONSOR, ANY AUTHORITY INDEMNIFIED PERSON, THE STATE OF WISCONSIN OR THE STATE OF NEW YORK OR ANY POLITICAL SUBDIVISION OR AGENCY OF EITHER STATE OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2015 BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO; (II) THE SERIES 2015 BONDS DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE IN ANY MANNER, ANY MEMBER, THE STATE OF WISCONSIN OR THE STATE OF NEW YORK OR ANY POLITICAL SUBDIVISION OF EITHER STATE OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2015 BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2015 BONDS OR ANY COSTS INCIDENTAL THERETO; AND (III) NEITHER THE FAITH AND CREDIT OR TAXING POWER OF ANY MEMBER, THE STATE OF WISCONSIN OR THE STATE OF NEW YORK OR ANY POLITICAL SUBDIVISION OF EITHER STATE OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2015 BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY OR OF ANY SPONSOR OR AUTHORITY INDEMNIFIED PERSON, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2015 BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER. The Series 2015 Bonds are offered when, as and if issued and accepted by the underwriter listed below (the “Underwriter”), subject to prior sale, to withdrawal or modification of the offer without notice, and to the approval of legality by Squire Patton Boggs (US) LLP, New York, New York, Bond Counsel to the Authority and to certain other conditions. Certain legal matters will be passed upon by Orrick, Herrington & Sutcliffe LLP (as local bond counsel to Oneida County and Onondaga County) and Harris Beach PLLC (as local bond counsel to Wayne County). Certain legal matters will be passed upon for the Underwriter by its counsel, Hawkins Delafield & Wood LLP, New York, New York and for the Authority by its counsel, von Briesen & Roper, s.c., Milwaukee, Wisconsin. It is expected that the Series 2015 Bonds in definitive form will be available for delivery to DTC in New York, New York on or about December ___, 2015. FTN Financial Capital Markets Dated: December __, 2015 This Preliminary Official Statement Statement containe and the information Official Preliminary This offer to sell or the solicitation of an offer to buy, nor shall th nor to buy, the an offer to sell or solicitation of offer under the securities laws of such jurisdiction.  Preliminary, subject to change.

$______, ___%, Term Bonds due December 15, 2023 – Price/Yield ____% – CUSIP ______† $______, ___%, Term Bonds due December 15, 2025 – Price/Yield ____% – CUSIP ______†

† “CUSIP” is a copyright of American Bankers Association. The CUSIP numbers listed above are being provided solely for the convenience of Bondholders only at the time of issuance of the Series 2015 Bonds and none of the Authority, the New York Counties or the Underwriter makes any representation with respect to such numbers or undertakes any responsibility for their accuracy now or at any time in the future.

 Preliminary, subject to change.

No dealer, broker, salesman or other person has been authorized by the Authority, the New York Counties (as defined herein) or the Underwriter to give any information or to make any representations with respect to the Series 2015 Bonds, 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 any of the foregoing. The information contained herein under the heading “The Authority” has been furnished by the Authority. All other information contained herein has been obtained from other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness by, and is not to be construed to be the representation of, the Authority or the Underwriter. Neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the parties referred to above since the date hereof. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, and there shall not be any sale of, the Series 2015 Bonds in any state in which it is unlawful to make such offer, solicitation or sale.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER- ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2015 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

References to web site addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise, such web sites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement for purposes of, and as that term is defined in, SEC Rule 15c2-12.

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TABLE OF CONTENTS

Page INTRODUCTORY STATEMENT ...... 1 THE AUTHORITY ...... 4 THE SERIES 2015 BONDS ...... 7 SECURITY FOR THE BONDS ...... 12 PLAN OF FINANCE ...... 16 ESTIMATED SOURCES AND USES OF FUNDS ...... 16 THE NEW YORK COUNTIES ...... 17 RATING ...... 18 LITIGATION ...... 18 SERIES 2015 BONDS NOT LIABILITY OF WISCONSIN OR NEW YORK ...... 19 LEGAL MATTERS ...... 19 TAX MATTERS ...... 19 FINANCIAL STATEMENTS ...... 21 SECONDARY MARKET DISCLOSURE/CONTINUING DISCLOSURE ...... 22 FINANCIAL ADVISOR ...... 23 UNDERWRITING ...... 23 MISCELLANEOUS ...... 24 Appendix A – The New York Counties………………………………………………………………………...... A-1 Appendix B – Certain Definitions and Summary of Principal Documents ...... B-1 Appendix C – Form of Opinion of Bond Counsel ...... C-1

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PUBLIC FINANCE AUTHORITY

______

OFFICIAL STATEMENT

Relating to

$8,000,000 Public Finance Authority Revenue Bonds (New York State Association of Counties Qualified Energy Conservation Bond Financing Program), Series 2015A (Federally Taxable)

INTRODUCTORY STATEMENT

The descriptions and summaries of various documents set forth herein do not purport to be comprehensive or definitive, and reference is made to each document for the complete details of all terms and conditions. All statements herein are qualified in their entirety by reference to each document. See Appendix B for a summary of the principal documents and for definitions of certain capitalized words and terms used but not defined elsewhere in this Official Statement.

Purpose

The purpose of this Official Statement, including the cover page, inside cover page and appendices hereto, is to set forth certain information concerning the Public Finance Authority (the “Authority”) and its $8,000,000* Revenue Bonds (New York State Association of Counties Qualified Energy Conservation Bond Financing Program), Series 2015A (Federally Taxable) (the “Series 2015 Bonds”), consisting of $2,430,000* loaned to Oneida County, New York, $2,650,000* loaned to Onondaga County, New York and $2,920,000* loaned to Wayne County, New York, under the respective Loan Agreement (as defined herein), and issued pursuant to a Master Trust Indenture, dated as of November 1, 2015 (the “Master Trust Indenture”), as supplemented by a Supplemental Indenture No. 1, dated as of November 1, 2015 (the “Series Supplement” and, together with the Master Trust Indenture, the “Trust Indenture”), between the Authority and The Bank of New York Mellon, as trustee (the “Trustee”), and authorized by the resolution adopted by the Authority’s Board of Directors on June 3, 2015 (the “Bond Resolution”). The Series 2015 Bonds are issued and secured under the Trust Indenture in accordance with Sections 66.0301, 66.303 and 66.304 of the Wisconsin Statutes, as from time to time amended and supplemented (the “Act”). The Series 2015 Bonds, and any additional bonds that may be issued pursuant to the Trust Indenture, are referred to collectively as the “Bonds.”

Use of Proceeds

Proceeds of the Series 2015 Bonds will be applied to acquire general obligation bonds (the “New York County Bonds”) to be issued by Oneida County, New York, Onondaga County, New York and Wayne County, New York (each a “County” or a “New York County” and collectively, the “Counties” or the “New York Counties”). The New York Counties shall use their respective portions of the proceeds of the Series 2015 Bonds to finance a portion of the costs of certain projects and to pay a portion of the costs of issuance of the Series 2015 Bonds as described herein.

The payment of principal of and interest on the New York County Bonds will be applied to pay the principal of and interest on the Series 2015 Bonds. Each of the New York Counties will enter into a

 Preliminary, subject to change.

separate Loan Agreement (each, a “Loan Agreement” and collectively, the “Loan Agreements”) with the Authority, pursuant to which the Authority will loan a portion of the proceeds of the Series 2015 Bonds to such New York County and each New York County will agree to issue its respective New York County Bonds, the principal of and interest on which will be sufficient to repay its loan from the Authority and will further agree to make certain other payments (each, a “Loan”). The Loan Agreements will constitute several, and not joint, obligations of the New York Counties. A default by any New York County on its New York County Bonds could cause a default on the Series 2015 Bonds. See Appendix B – “Certain Definitions and Summary of Principal Documents – Summary of the Agreements.”

Each of the New York County Bonds shall be a general obligation of the County that issued such bond backed by its faith and credit and each County has the power and, subject to certain statutory limitations described herein under “SECURITY FOR THE BONDS—Tax Levy Limit Law”, is required to levy and collect ad valorem taxes on all property within the County for the purpose of paying the principal, sinking fund installments and interest on such New York County Bonds. Each of the New York County Bonds is being issued as sinking fund bonds in compliance with the laws of the State of New York and each County shall be required to establish a Sinking Fund with the Comptroller of the State of New York. Amounts paid by each County into its Sinking Fund are required to be in accordance with its Required Balance Certificate, as the same may be amended pursuant to such County’s Sinking Fund Agreement (as defined herein) and to be applied to the payment of the principal amounts due on the respective New York County Bonds. No New York County is required to make payments on behalf of any other New York County. A default by any New York County on its New York County Bonds could result in a default on the Series 2015 Bonds. See ”SECURITY FOR THE BONDS” herein.

The New York State Association of Counties (“NYSAC”) has developed a NYSAC Qualified Energy Conservation Bond Program (the “QECB Program”) whereby participating State of New York counties (each a “Participant”) will issue Qualified Energy Conservation Bonds (“QECBs”) as general obligation bonds to the Authority under the authority of the State of New York Local Finance Law to finance certain energy efficiency projects. Each of the New York Counties is a Participant under the QECB Program, and each of the New York Counties has determined that the financing of certain energy efficiency capital expenditures in public buildings located in each of the New York Counties will (i) provide energy efficiency facilities for each of the New York Counties to reduce costs of operating government services, (ii) improve and enhance the “green” quality of county facilities, and (iii) provide employment opportunities and enhance the general economy and welfare of each of the New York Counties. The proceeds of the Series 2015 Bonds, together with other available funds, will be used to finance the Project (as defined herein) and pay the costs of issuance of the Series 2015 Bonds. See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF FUNDS” herein. For a brief description of the New York Counties, see “NEW YORK COUNTIES”. For the approximate amounts of the loans to each of the individual New York Counties, see Appendix A hereto.

Each New York County will make an irrevocable election to treat its New York County Bonds as “qualified energy conservation bonds” under Section 54D of the Internal Revenue Code of 1986, as amended (the “Code”) for which it will receive pursuant to Section 6431 of the Code, a cash subsidy payment from the United States Treasury equal to the lesser of (i) the interest paid by such New York County on its New York County Bonds, and (ii) 70% of the interest which would have been payable on such New York County if such interest were determined at the applicable credit rate determination under Section 54A(b)(3) of the Code. It is expected that such cash subsidy payments will be deposited upon receipt to the credit of the applicable New York County. Such subsidy payments, when received, will become part of the general funds of the respective Counties and will not be separately pledged as security for the New York County Bonds or the Series 2015 Bonds. The Series 2015 Bonds, however, are not qualified energy conservation bonds.

New York Counties

Each of the New York Counties is a political subdivision of the State of New York. The New York Counties are located in different areas of the State of New York and are of varying geographic and demographic size and have varying financial and indebtedness characteristics. See “THE NEW YORK COUNTIES” herein and “Appendix A – The New York Counties”. The audited financial statements as of December 31, 2014 of the New York Counties have been filed by or on behalf of the New York Counties with the Municipal Securities Rulemaking Board (“MSRB”) through the Electronic Municipal Market Access (“EMMA”) system.

Security

Each series of bonds under the Master Trust Indenture will be separately secured. None of the funds and accounts established under a supplemental indenture, including the Series Supplement, to secure a series of bonds, including the Series 2015 Bonds, shall secure any other series of bonds.

The Series 2015 Bonds will be secured by the pledge and assignment to the Trustee of Basic Debt Service Payments due under each Loan Agreement, payments due on the New York County Bonds, amounts payable to the Authority from the sinking funds established pursuant to the Sinking Fund Agreements and all funds and accounts authorized by the Master Trust Indenture and established by the Series Supplement. Each New York County will deliver its New York County Bonds to the Authority to evidence its obligations to repay its Loan, will pledge its faith and credit to the payment of the principal, sinking fund installments and interest on its New York County Bonds and, subject to certain statutory limitations described herein under “SECURITY FOR THE BONDS—Tax Levy Limit Law”, is required under New York statutes to levy and collect ad valorem taxes on all taxable property within the New York County for such payment. Pursuant to its New York County Bonds and Section 22.10 of the New York Local Finance Law, each New York County is to deposit on December 10 of each year, sinking fund installments into the Sinking Fund established pursuant to a Sinking Fund Agreement between the New York State Office of the State Comptroller (the “State Comptroller”), such New York County and a custodial bank to be selected by the State Comptroller (the “Custodial Bank”). Amounts on deposit therein are required to be applied to pay the maturing principal or redemption price thereof on the New York County Bonds, when due and each County has covenanted in its Loan Agreement to cause the payments of such amount to the Trustee for the Series 2015 Bonds. See “SECURITY FOR THE BONDS – Sinking Fund Agreements” herein.

No New York County will be responsible for the payment obligations of any other New York County. If a New York County fails to pay amounts due under its New York County Bonds or Loan Agreement, the Authority’s sole recourse will be against the defaulting New York County and no other New York County. Further, upon the occurrence of any event of default by a New York County, neither the Authority, the Trustee nor the holders of the Series 2015 Bonds will have the right to accelerate the obligation of the defaulting New York County under its Loan Agreement or New York County Bonds. A default by any New York County under its Loan Agreement could result in a default on the Series 2015 Bonds.

Special Obligations

NONE OF THE AUTHORITY, ANY MEMBER, ANY SPONSOR, ANY AUTHORITY INDEMNIFIED PERSON, THE STATE OF WISCONSIN OR THE STATE OF NEW YORK OR ANY POLITICAL SUBDIVISION OR AGENCY OF EITHER STATE OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2015 BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO; (II) THE SERIES 2015 BONDS DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE IN ANY MANNER, ANY MEMBER, THE STATE OF WISCONSIN OR THE STATE OF NEW YORK OR ANY POLITICAL SUBDIVISION OF EITHER STATE OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2015 BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2015 BONDS OR ANY COSTS INCIDENTAL THERETO; AND (III) NEITHER THE FAITH AND CREDIT OR TAXING POWER OF ANY MEMBER, THE STATE OF WISCONSIN OR THE STATE OF NEW YORK OR ANY POLITICAL SUBDIVISION OF EITHER STATE OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2015 BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY OR OF ANY SPONSOR OR AUTHORITY INDEMNIFIED PERSON, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2015 BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.

THE AUTHORITY

Formation and Governance

In early 2010, both houses of the Wisconsin Legislature passed 2009 Wisconsin Act 205 (the “Act”), which was signed into law by the Governor of Wisconsin on April 21, 2010. The Act added Section 66.0304 to the Wisconsin Statutes (the “Statute”) authorizing two or more political subdivisions to create a commission to issue bonds under that Section. Before an agreement for the creation of such a commission could take effect, the Act requires that such agreement be submitted to the Attorney General of Wisconsin to determine whether the agreement is in proper form and compatible with the laws of the State of Wisconsin (“Wisconsin”). The Authority was formed upon execution of a Joint Exercise of Powers Agreement Relating to the Public Finance Authority dated as of June 30, 2010 as amended by an Amended and Restated Joint Exercise of Powers Agreement Relating to the Public Finance Authority dated September 28, 2010 (as amended and as may be further amended from time to time, the “Joint Exercise Agreement”) among Adams County, Wisconsin, Bayfield County, Wisconsin, Marathon County, Wisconsin, Waupaca County, Wisconsin and the City of Lancaster, Wisconsin (each a “Member” and, collectively, the “Members,” which term shall also include any political subdivision designated in the future as a “Member” of the Authority pursuant to the Joint Exercise Agreement). The Joint Exercise Agreement was approved by the Wisconsin Attorney General on September 30, 2010. The Act also provides that only one commission may be formed thereunder.

Pursuant to the Statute, the Authority is a unit of government and a body corporate and politic separate and distinct from, and independent of, Wisconsin and the Members. The Authority was established by local governments, primarily for local governments, for the public purpose of providing local governments a means to efficiently, and reliably finance projects that benefit local governments, and nonprofit organizations and other eligible private borrowers in Wisconsin and throughout the country.

Powers

Under the Statute, the Authority has all of the powers necessary or convenient to any of the purposes of the Act, including the power to issue bonds, notes or other obligations or refunding obligations to finance or refinance a project, make loans to, lease property from or to enter into agreements with a participant or other entity in connection with financing a project. The proceeds of bonds issued by the Authority may be used for a project in Wisconsin or any other state or territory of the United States, or outside the United States if a participating borrower is incorporated and maintains its principal place of business in the United States or its territories. The Statute defines “project” as any capital improvement, purchase of receivables, property, assets, commodities, bonds or other revenue streams or related assets, working capital program, or liability or other insurance program, located within or outside of Wisconsin.

Authority Local Approval Requirement

Section 66.0304(11)(a) of the Act and Section 4 of the Joint Exercise Agreement require that a local political subdivision within whose boundaries a project is located must approve the financing of such project by the Authority (the “Authority Local Approval Requirement”). Each of the Counties is a “political subdivision” as defined in the statute and the Authority Local Approval Requirement has been satisfied by provisions in the respective Loan Agreements to such effect.

Governing Body

The Joint Exercise Agreement provides for a Board of Directors of the Authority (the “Board”) consisting of seven directors (each a “Director” and collectively, the “Directors”), a majority of whom are required to be public officials or current or former employees of a political subdivision located in Wisconsin. The Directors serve staggered three-year terms. The Directors are selected by majority vote of the Board based upon nomination by the organization that nominated the predecessor Director. Four Directors are nominated by the Wisconsin Counties Association, and one Director is nominated from each of the National League of Cities, the National Association of Counties and the League of Wisconsin Municipalities (said organizations being sometimes referred to herein collectively as the “Sponsors”). Directors and alternate Directors may be removed and replaced at any time by the Board upon recommendation of the Sponsor that nominated such Director.

As of the date of this Official Statement there is one vacant Board seat (representing the nominee of the National League of Cities).

Current Term Expires Name Title (May 31) Position William Kacvinsky Chair 2018 Former Bayfield County, Wisconsin, Board Chair Jerome Wehrle Vice Chair 2018 Mayor, City of Lancaster, Wisconsin Heidi Dombrowski Treasurer 2018 Waupaca County, Wisconsin, Finance Director John West Secretary 2016 Adams County, Wisconsin, Supervisor Del Twidt Member 2016 Former Buffalo County, Wisconsin Board Chair Michael Gillespie Member 2017 Former Chair, Madison County, Alabama Board of Commissioners

The Authority has no employees and contracts with a full-service program management firm, HB Consulting, LLC, to manage the day-to-day operations of the Authority including, but not limited to, staff and administrative support and ongoing compliance matters. All of these services provided by HB Consulting, LLC are subject to review and approval by the Board.

Resolution; Approval

The Board adopted the Bond Resolution approving the issuance of the Series 2015 Bonds on June 3, 2015.

Special Limited Obligations

THE SERIES 2015 BONDS ARE NOT AN OBLIGATION OR DEBT OF NYSAC, AND EXCEPT AS OTHERWISE PROVIDED HEREIN WITH RESPECT TO THE OBLIGATIONS OF EACH NEW YORK COUNTY UNDER ITS OWN NEW YORK COUNTY BONDS: (I) THE SERIES 2015 BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM PLEDGED REVENUES AND, IF ANY, SUCH OTHER FUNDS AND AMOUNTS PLEDGED FOR THEIR PAYMENT PURSUANT TO THE INDENTURE AND EXCEPT FROM SUCH SOURCE, NONE OF THE AUTHORITY, ANY MEMBER, ANY SPONSOR, ANY AUTHORITY INDEMNIFIED PERSON, THE STATE OF WISCONSIN OR THE STATE OF NEW YORK OR ANY POLITICAL SUBDIVISION OR AGENCY OF EITHER STATE OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2015 BONDS SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO; (II) THE SERIES 2015 BONDS DO NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE IN ANY MANNER, ANY MEMBER, THE STATE OF WISCONSIN OR THE STATE OF NEW YORK OR ANY POLITICAL SUBDIVISION OF EITHER STATE OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2015 BONDS TO LEVY ANY TAX OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2015 BONDS OR ANY COSTS INCIDENTAL THERETO; AND (III) NEITHER THE FAITH AND CREDIT OR TAXING POWER OF ANY MEMBER, THE STATE OF WISCONSIN OR THE STATE OF NEW YORK OR ANY POLITICAL SUBDIVISION OF EITHER STATE OR ANY POLITICAL SUBDIVISION APPROVING THE ISSUANCE OF THE SERIES 2015 BONDS, NOR THE FAITH AND CREDIT OF THE AUTHORITY OR OF ANY SPONSOR OR AUTHORITY INDEMNIFIED PERSON, SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE SERIES 2015 BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY HAS NO TAXING POWER.

Other Obligations

The Authority has issued, sold and delivered in the past, and expects to issue, sell and deliver in the future, obligations other than the Series 2015 Bonds, which other obligations are and will be secured by instruments separate and apart from the Trust Indenture and the Series 2015 Bonds. The holders of such obligations of the Authority will have no claim on the security for the Series 2015 Bonds and the owners of the Series 2015 Bonds will have no claim on the security for such other obligations issued by the Authority.

Limited Involvement of the Authority

The Authority has not reviewed any appraisal for the Project or any feasibility study or other financial analysis of the Project and has not undertaken to review or approve expenditures for the Project, to supervise the construction of the Project, or to review the financial statements of the New York Counties.

Except for the information in this Section and under the caption “LITIGATION – The Authority” as such information applies to the Authority, the Authority has not participated in the preparation of or reviewed this Official Statement and is not responsible for any information contained herein.

THE SERIES 2015 BONDS

General Description

The Series 2015 Bonds will bear interest from their dated date at the stated rates, and will mature, subject to the right of redemption described below, in the amounts and dates as set forth on the inside cover page of this Official Statement. The Series 2015 Bonds shall be dated their date of delivery. The Series 2015 Bonds are issuable only as fully registered bonds in the denominations of $5,000 or any integral multiple thereof, as provided in the Trust Indenture. Interest will be computed on the basis of a 360-day year of twelve thirty-day months and is payable commencing on June 15, 2016, and semiannually thereafter on each June 15 and December 15, until maturity or prior redemption.

Book-Entry Only System

The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Series 2015 Bonds. The Series 2015 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 Series 2015 Bond certificate will be issued in the aggregate principal amount of the Series 2015 Bonds, and will be deposited with DTC.

DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million 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 its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

Purchases of the Series 2015 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2015 Bonds on DTC’s records. The ownership interest of each actual purchaser of each Series 2015 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 Series 2015 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

7 receive certificates representing their ownership interests in Series 2015 Bonds, except in the event that use of the book-entry system for the Series 2015 Bonds is discontinued.

To facilitate subsequent transfers, all Series 2015 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 Series 2015 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2015 Bonds. DTC’s records reflect only the identity of the Direct Participants to whose accounts such Series 2015 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the Series 2015 Bonds may wish to take certain steps to augment transmission to them of notices of significant events with respect to the Series 2015 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of the Series 2015 Bonds may wish to ascertain that the nominee holding the Series 2015 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Series 2015 Bonds within a single maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Series 2015 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 Authority 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 Series 2015 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal (including sinking fund installments, if any), redemption premium, if any, and interest payments on the Series 2015 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 Authority or the Trustee on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee, the New York Counties, the Trustee, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Authority or the Trustee, 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 securities depository with respect to the Series 2015 Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such

8 circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered.

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

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Authority believes to be reliable, but none of the Authority, the New York Counties or the Underwriter takes any responsibility for the accuracy thereof.

NEITHER THE TRUSTEE NOR THE AUTHORITY SHALL HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY PARTICIPANT, ANY PERSON CLAIMING A BENEFICIAL OWNERSHIP INTEREST IN THE SERIES 2015 BONDS UNDER OR THROUGH DTC OR ANY PARTICIPANT, OR ANY OTHER PERSON WHO IS NOT SHOWN IN THE REGISTRATION BOOKS OF THE TRUSTEE AS BEING A BONDHOLDER, WITH RESPECT TO: THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY PARTICIPANT; THE PAYMENT BY DTC OR ANY PARTICIPANT OF ANY AMOUNT IN RESPECT OF THE PRINCIPAL OF OR REDEMPTION PRICE, IF ANY, OR INTEREST ON THE SERIES 2015 BONDS; ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO BONDHOLDERS UNDER THE TRUST INDENTURE; THE SELECTION BY DTC OR ANY PARTICIPANT OF ANY PERSON TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE SERIES 2015 BONDS; OR ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS BONDHOLDER.

In the event that the book-entry only system is discontinued, principal and redemption price will be payable upon surrender of the Series 2015 Bonds at the corporate trust office of the Trustee and interest will be payable on each Interest Payment Date, by check or draft mailed or, at the option of the Holder of at least $500,000 aggregate principal amount of Series 2015 Bonds, by wire transfer, to the Bondholders as of the close of business on the Record Date.

If the book-entry only system is discontinued and Bond certificates have been delivered as described in the Trust Indenture, the Beneficial Owner, upon registration of certificates held in the Beneficial Owner’s name, will become the Bondholder. Thereafter, Series 2015 Bonds may be exchanged for an equal aggregate principal amount of Series 2015 Bonds in other authorized denominations, upon surrender thereof at the principal corporate trust office of the Trustee, as Registrar. The transfer of any Series 2015 Bond may be registered on the books maintained by the Trustee, as Registrar, for such purpose only upon the surrender thereof to the Trustee with a duly executed assignment in form satisfactory to the Trustee. For every exchange or registration of transfer of Series 2015 Bonds, the Trustee, as Registrar, may make a charge sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge may be made to the Bondholder for any exchange or registration of transfer of The Series 2015 Bonds. The Trustee will not be required to register the transfer of or exchange any Series 2015Bond during the period from the Record Date to the Bond Payment Date or if such Bond (or any part thereof) has been or is being called for redemption.

Redemption

Optional Redemption. The Series 2015 Bonds are subject to redemption at any time, in whole or in part, at the option of the Authority, upon direction of a New York County at an amount equal to the Make Whole Redemption Price, plus accrued interest to the date of redemption provided, however, that if the County of Oneida requests the Authority to direct the optional redemption of Series 2015 Bonds, the Authority shall redeem such portion of the Series 2015 Term Bond maturing on December 15, 2023, as corresponds to the principal amount of the County of Oneida’s New York County Bonds being redeemed;

9 provided further that if either the County of Onondaga or the County of Wayne requests the Authority to direct the optional redemption of Series 2015 Bonds, the Authority shall redeem such portion of the Series 2015 Term Bond maturing on December 15, 2025, as corresponds to the principal amount of the County of Wayne’s or County of Onondaga’s New York County Bonds, as the case may be, being redeemed. The term “Make Whole Redemption Price” means the greater of (i) the issue price of the Series 2015 Bonds (but not less than 100% of the principal amount of the Series 2015 Bonds to be redeemed), or (ii) the sum of the present value of the remaining scheduled payments of principal and interest on the Series 2015 Bonds to be redeemed (taking into account any mandatory sinking fund redemptions), not including any portion of those payments of interest accrued and unpaid as of the date on which the Series 2015 Bonds are to be redeemed, discounted to the date on which such Series 2015 Bonds are to be redeemed on a semi-annual basis, assuming a 360-day year consisting of twelve (12) 30-day months, at the Treasury Rate plus 25 basis points, plus, in each case, accrued and unpaid interest on the Series 2015 Bonds to be redeemed on the redemption date. For purposes of determining the Make-Whole Redemption Price, “Treasury Rate” means, with respect to any redemption date for a particular Series 2015 Bond, the yield to maturity as of such redemption date of U.S. Treasury securities with a constant maturity (as compiled and published in the Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days, but not more than 45 calendar days, prior to the redemption date (excluding inflation indexed securities) (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to the maturity date of the Series 2015 Bond to be redeemed, provided, however, that if the period from the redemption date to such maturity date is less than one year, the weekly average yield on actually traded U.S. Treasury securities adjusted to a constant maturity of one year will be used.

Selection of Bonds to be Redeemed. In the event of any redemption of less than all of the Outstanding Series 2015 Bonds of a maturity, the Trustee shall assign to each Outstanding Series 2015 Bond of the maturity to be redeemed a distinctive number for each unit of the principal amount of such Series 2015 Bond equal to the lowest denomination in which the Series 2015 Bonds are authorized to be issued and shall select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to such Series 2015 Bonds as many numbers as, at such unit amount equal to the lowest denomination in which the Series 2015 Bonds are authorized to be issued for each number, shall equal the principal amount of such Series 2015 Bonds to be redeemed. In making such selections the Trustee may draw the Series 2015 Bonds by lot (i) individually or (ii) by one or more groups, the grouping for the purpose of such drawing to be by serial numbers (or, in the case of Series 2015 Bonds of a denomination of more than the lowest denomination in which the Series 2015 Bonds are authorized to be issued, by the numbers assigned thereto as provided in the Series Supplement) which end in the same digit or in the same two digits. In case, upon any drawing by groups, the total principal amount of Series 2015 Bonds of a maturity drawn shall exceed the amount to be redeemed, the excess may be deducted from any group or groups so drawn in such manner as the Trustee may determine.

Notice of Redemption. Unless the Series 2015 Bonds are Book-Entry Bonds, not less than thirty (30) nor more than sixty (60) days prior to the date set for redemption of any Series 2015 Bonds, the Trustee will send notice by mail to all registered Holders of Series 2015 Bonds to be redeemed. Such redemption notice will set forth the details of such redemption. Failure of holder to receive notice or any defect in such notice shall not affect the validity of any proceedings for the redemption of any Series 2015 Bonds with respect to which notice was so mailed or with respect to which no such defect occurred. If any of the Series 2015 Bonds to be redeemed are Book-Entry Bonds, the Trustee will send a notice of redemption to the Depository for such Book-Entry Bonds not less than thirty-five (35) days prior to the date set for redemption. Any failure on the part of DTC or failure on the part of a nominee of a Beneficial Owner (having received notice from a DTC Participant or otherwise) to notify the Beneficial Owner so affected shall not affect the validity of the redemption.

Acceleration

The Series 2015 Bonds are not subject to acceleration upon a Trust Indenture Event of Default or upon a default under any Loan Agreement or any New York County Bonds.

Transfer and Exchange

Except while the book-entry only system is in effect as described above, Series 2015 Bonds may be exchanged upon presentation and surrender thereof to the Trustee, acting as bond registrar, for an equal aggregate principal amount of Series 2015 Bonds. See “The Series 2015 Bonds – Book-Entry Only System.”

Debt Service Requirements

Principal and interest requirements on the Series 2015 Bonds are shown below:

Period Ending [December 31] Principal Interest Total*

____ $______$______$______** ______

* Totals may not add due to rounding. ** Each New York County is required to make Annual Contributions to the separate Sinking Fund established pursuant to the County’s Sinking Fund Agreement, commencing in 2016 with respect to the principal of its New York County Bonds pursuant to the County’s Required Balance Certificate. Amounts held in the Sinking Fund for each New York County are required to be applied to pay the maturing principal or redemption price on such County’s New York County Bonds, when due (see “ SECURITY FOR THE BONDS – Sinking Fund Agreement” herein),and shall be paid to the Authority, as holder of the New York County Bonds, to be applied to the payment of principal of and interest on the Series 2015 Bonds.

SECURITY FOR THE BONDS

General

Each series of bonds issued or to be issued under the Trust Indenture constitutes special obligations of the Authority, which is separately secured from each other series of bonds. None of the funds and accounts established under a supplemental indenture, including the Series Supplement, to secure a series of bonds shall secure any other series of bonds.

The Series 2015 Bonds, are payable solely from, and secured by a pledge of, the revenues of the Authority received from or on account of the New York Counties, which have borrowed proceeds of the Series 2015 Bonds, including the earnings thereon, subject to the application thereof for the purposes and on the terms and conditions set forth in the Trust Indenture. Revenues of the Authority to be received from or on account of the New York Counties will consist primarily of payments of principal of and interest on New York County Bonds to be issued by the respective New York Counties for the benefit of the Authority pursuant to the respective Loan Agreements.

Trust Indenture

The Series 2015 Bonds will be issued by the Authority pursuant to the Trust Indenture, which consists of the Master Trust Indenture and the Series Supplement. The Trust Indenture constitutes a contract among the Authority, the Trustee and the Holders of the Series 2015 Bonds and the pledges and covenants made therein are for the equal and ratable benefit and security of the Holders of the Series 2015 Bonds. The Trust Indenture provides that the Series 2015 Bonds shall be special obligations of the Authority, payable solely from and secured solely by a pledge of the proceeds from the sale of the Series 2015 Bonds, the Pledged Revenues, the New York County Bonds, the Loan Agreements (except for the Unassigned Rights and payments in respect thereof), the Authority’s security interest in the Pledged Revenues, and all funds authorized hereby and established pursuant to the Series Supplement, which pledge shall constitute a first lien thereon. Pledged Revenues include (i) Basic Debt Service Payments payable to the Authority by each New York County pursuant to the its Loan Agreement and its New York County Bonds; (ii) the amounts payable to the Authority from the sinking fund established pursuant to the Sinking Fund Agreements; and (iii) the right to receive the same and the proceeds thereof and of such right but (iv) shall not include Additional Payments or Direct Payments. The Authority will assign to the Trustee all such pledged funds, the New York County Bonds and all of the Authority’s right, title and interest in the Loan Agreements (except the Unassigned Rights of the Authority, as defined in the Trust Indenture, to include, among other things, the Authority’s right to grant approvals or consents, to receive notices, or for indemnification or reimbursement of costs and expenses).

The Trust Indenture provides that the security interest granted by the Authority to the Trustee therein is for the equal and proportionate benefit and security of the Holders from time to time of the Series 2015 Bonds issued, authenticated, delivered and outstanding under the Trust Indenture, without preference, priority or distinction as to lien or otherwise of any Series 2015 Bonds over any other Series 2015 Bonds to the end that each Holder of any Series 2015 Bonds has the same rights, privileges and lien under and by virtue of the Trust Indenture.

Loan Agreements

Each New York County, pursuant to its Loan Agreement, will deliver its New York County Bonds to the Authority to evidence its obligation to repay the Loan made to such New York County under its Loan Agreement. The Series 2015 Bonds are not secured by any interest in real property of the New York Counties or any funds or accounts of the New York Counties, including the sinking fund account established pursuant to each Sinking Fund Agreement. Furthermore, the New York County Bonds are not

12 secured by any interest subsidy amounts paid to the New York Counties by the United States Treasury with respect to its New York County Bonds. The New York County Bonds are general obligations of each New York County. Each New York County will pledge its faith and credit to the payment of the principal of and interest on its New York County Bonds and has the power and is required under New York statutes, subject to certain statutory limitations imposed by the Tax Levy Limit Law, to levy and collect ad valorem taxes on all taxable property within the New York County for such payment. See “SECURITY FOR THE BONDS—Tax Levy Limit Law”. Each County covenants and agrees in its Loan Agreement that it shall duly and punctually pay or cause to be paid the principal amount, premium, if any and interest on its New York County Bonds, at the dates and places and in the manner stated in such New York County Bonds and that such obligation shall not be subject to any defense (other than payment) or any rights of setoff, recoupment, abatement, counterclaim or deduction and shall be without any rights of suspension, deferment, diminution or reduction it might otherwise have against the Authority, the Trustee or the owner of any Authority Bond. See “Appendix A – The New York Counties”. Upon the issuance of each issue of New York County Bonds, bond counsel with respect to each issue of New York County Bonds, will deliver an opinion to such New York County and the Authority that such New York County Bonds were validly issued, that the New York County has validly pledged its faith and credit to the payments of principal of and interest on its New York County Bonds, that the New York County is required, subject to the Tax Levy Limit Law, to levy and collect ad valorem taxes on all taxable property within the County for such payment, and that such New York County’s Loan Agreement was duly authorized, executed and delivered, and that assuming due authorization, execution and delivery thereof by the Authority, constitutes a valid and binding obligation of the New York County.

Pursuant to its New York County Bonds and Section 22.10 of the New York Local Finance Law, each New York County is obliged to deposit sinking fund installments with respect to its New York County Bonds, as set forth in the Sinking Fund Agreement for such New York County. The aggregate payments of principal of and interest on the New York County Bonds, when due, shall be sufficient to pay all principal of and interest on the Series 2015 Bonds, when due. Each New York County’s Loan Agreement is to remain in full force and effect until all Series 2015 Bonds allocable to such New York County’s Loan have been fully paid or otherwise discharged.

No New York County will be responsible for any payment obligations of any other New York County. If a New York County fails to pay amounts under its Loan Agreement or New York County Bonds, when due, the Authority’s sole recourse will be against the defaulting New York County. Further upon the occurrence of an event of default, neither the Authority nor the holders of the Series 2015 Bonds will have the right to accelerate the obligation of the defaulting New York County under its Loan Agreement. A default by any New York County under its Loan Agreement could result in a default on the Series 2015 Bonds.

Sinking Fund Agreement

Pursuant to Section 22.10 of the New York Local Finance Law and each of the New York County Bonds, each New York County has entered into a Sinking Fund Agreement (each, a “Sinking Fund Agreement”), with the State Comptroller and the Custodial Bank. Each Sinking Fund Agreement provides for the maintenance and management of a sinking fund established for the amortization and redemption of each County’s sinking fund bonds (each a “Sinking Fund”) and the establishment of a separate account within each County’s Sinking Fund for such County’s New York County Bonds to be held in trust by the Custodial Bank for the benefit of the owner of the applicable New York County Bonds, separate and apart from any other funds of the New York County or the State of New York, and are not available for the payment of any expenditures of the State of New York, the Custodial Bank or the New York County, other than the payment of principal, purchase price and redemption price of the applicable New York County Bonds. Pursuant to the Sinking Fund Agreement, each New York County

is required to make deposits (each, an “Annual Contribution”) into its Sinking Fund so that the amount on deposit therein and credited to the account for such County’s New York County Bonds on each December 10th , commencing with December 10, 2016 (each a “Sinking Fund Payment Date”) is not less than the respective amount required to be on deposit in the such account as of such date, as provided in the Required Balance Certificate as set forth below or as the same may be amended in accordance with the provisions of such Sinking Fund Agreement. In the event that a portion of the New York County Bonds is redeemed or otherwise cancelled prior to maturity, the County’s Required Balance Certificate will be amended to reflect corresponding adjustments to the balances required to be on deposit in the County’s Sinking Fund on each Sinking Fund Payment Date. Each Sinking Fund Agreement provides for the investment of amounts therein in permitted investments, which include direct obligations of the United State of America and obligations the principal of and interest on which are unconditionally guaranteed by the United States of America and other investments listed in Section 22.10(d)(4) of the New York Local Finance Law. Amounts held in each Sinking Fund are not pledged to pay debt service on the Series 2015 Bonds, however, such amounts are required to be applied to pay the maturing principal of the applicable New York County Bonds or redemption price thereof, when due and each County has covenanted in its Loan Agreement to cause the payments of such amount to the Trustee for the Series 2015 Bonds. Pursuant to the Sinking Fund Agreement, if a New York County fails to make a required Annual Contribution, the Custodial Bank is required to give notice to the State Comptroller and the New York County but the State Comptroller shall have no obligation to take any action against the New York County for any such failure.

Each of the New York County Bonds provides for each New York County to make an Annual Contribution to its Sinking Fund in accordance with its Required Balance Certificate so that the respective amounts on deposit in such Sinking Fund on each Sinking Fund Payment Date is not less than the respective amounts described below, which amounts are to be applied to pay the principal of such New York County Bonds on the respective maturity dates thereof or earlier redemption date.

Oneida County Onondaga County Wayne County Amount Amount Amount Required to be Required to be Required to be on Deposit in on Deposit in on Deposit in Sinking Fund Sinking Fund Sinking Fund Account on Account on Account on Sinking Fund Sinking Fund Sinking Fund Payment Date Payment Date Payment Date (December 10) Amount (December 10) Amount* (December 10) Amount*

2016 $ 303,750 2016 $ 265,000 2016 $ 292,000 2017 607,500 2017 530,000 2017 584,000 2018 911,250 2018 795,000 2018 876,000 2019 1,215,000 2019 1,060,000 2019 1,168,000 2020 1,518,750 2020 1,325,000 2020 1,460,000 2021 1,822,500 2021 1,590,000 2021 1,752,000 2022 2,126,250 2022 1,855,000 2022 2,044,000 2023 2,430,000 2023 2,120,000 2023 2,336,000 2024 2,385,000 2024 2,628,000 2025 2,650,000 2025 2,920,000

 Preliminary, subject to change.

Tax Levy Limit Law

Prior to the enactment of Chapter 97 of the Laws of 2011 (the “Tax Levy Limit Law”) on June 24, 2011, all the taxable real property within a New York County was subject to the levy of ad valorem taxes to pay the bonds and notes of the county and interest thereon without limitation as to rate or amount. However, the Tax Levy Limit Law, as amended, imposes a tax levy limitation upon New York counties for any fiscal year commencing January 1, 2012 through June 15, 2020 or later as provided in the Tax Levy Limit Law, without providing an exclusion for debt service on obligations issued by the counties, including the New York County Bonds. As a result, the power of a New York County to levy real estate taxes on all the taxable real property within the county, without limitation as to rate or amount, may or may not be subject to statutory limitations, according to the formulas set forth in the Tax Levy Limit Law. The actual effect of the Tax Levy Limit Law would depend upon the interpretation of such law by a court of competent jurisdiction in the event of a legal challenge.

The following is a brief summary of certain relevant provisions of the Tax Levy Limit Law. The summary is not complete and the full text of the Tax Levy Limit Law should be read in order to understand the details and implications thereof.

The Tax Levy Limit Law, as amended, imposes a limitation on increases in the real property tax levy of each New York County, subject to certain exceptions. The Tax Levy Limit Law permits a county to increase its overall real property tax levy over the tax levy of the prior year by no more than the “Allowable Levy Growth Factor”, which is the lesser of one and two-one hundredths or the sum of one plus the Inflation Factor; provided, however that in no case shall the levy growth factor be less than one. The “Inflation Factor” is the quotient of: (i) the average of the 20 National Consumer Price Indexes determined by the United States Department of Labor for the twelve-month period ending six months prior to the start of the coming fiscal year minus the average of the National Consumer Price Indexes determined by the United States Department of Labor for the twelve-month period ending six months prior to the start of the prior fiscal year, divided by: (ii) the average of the National Consumer Price Indexes determined by the United States Department of Labor for the twelve-month period ending six months prior to the start of the prior fiscal year, with the result expressed as a decimal to four places. Each New York County is required to calculate its tax levy limit for the upcoming year in accordance with the provision above and provide all relevant information to the State Comptroller prior to adopting its budget. The Tax Levy Limit Law sets forth certain exclusions to the real property tax levy limitation of a county, including exclusions for certain portions of the expenditures for retirement system contributions and tort judgments payable by the county. The governing board of a county may adopt a budget that exceeds the tax levy limit for the coming fiscal year, only if the governing board of the county first enacts, by a vote of at least sixty percent of the total voting power of the governing board of the county, a local law to override such limit for such coming fiscal year.

The Tax Levy Limit Law does not contain an exception from the levy limitation for the payment of debt service on either outstanding general obligation bonds or notes of a county or such indebtedness incurred after the effective date of the Tax Levy Limit Law. As such, there can be no assurances that the Tax Levy Limit Law will not come under legal challenge for violating (i) Article VIII, Section 12 of the New York State Constitution for not providing an exception for debt service on obligations issued prior to the enactment of the Tax Levy Limit Law, (ii) Article VIII, Section 10 of the New York State Constitution by effectively eliminating the exception for debt service to general real estate tax limitations, and (iii) Article VIII, Section 2 of the New York State Constitution by limiting the pledge of its faith and credit by a municipality or school district for the payment of debt service on obligations issued by such municipality or school district.

Additional Indebtedness

Each series of bonds is separately secured by payments under each Loan Agreement or Loan Agreements and the funds and accounts established in the applicable series supplement. Under the Series Supplement, the New York Counties may issue additional general obligation bonds, which are secured by the faith and credit of such New York Counties, subject to limitations set forth in the Constitution and laws of the State of New York.

PLAN OF FINANCE

Upon delivery of the Series 2015 Bonds, proceeds of the Series 2015 Bonds will be loaned to the New York Counties and used, together with other available funds, to pay costs of the certain projects, which is to: (i) pay the costs of acquiring, constructing and installing certain energy efficiency improvements in various public facilities located in the New York Counties (collectively, the “Project”), and (ii) pay the costs of issuance of the Series 2015 Bonds.

ESTIMATED SOURCES AND USES OF FUNDS

The proceeds to be received from the sale of the Series 2015 Bonds and other available funds are expected to be applied as follows:

Sources of Funds

Principal Amount of the Series 2015 Bonds ...... $______

Total Sources of Funds ...... $______

Uses of Funds

Deposit into Series 2015 Debt Service Fund ...... $______

Deposit into Series 2015 Cost of Issuance Account...... ______

Payment to Oneida County, New York ...... ______

Payment to Onondaga County, New York ...... ______

Payment to Wayne County, New York ...... ______

Total Uses of Funds ...... $______

 Includes Legal, Financing and other costs (including Underwriter’ discount and the Authority’s fees and expenses).

THE NEW YORK COUNTIES

General Descriptions

The following provides a brief description of each of the New York Counties, as well as a general description of each of the New York Counties including land size and population. For a more detailed description of all of the New York Counties and the amounts of their respective loans, see Appendix A attached hereto.

Oneida County

Oneida County is located in central upstate New York, in the area commonly known as the Mohawk Valley. It is situated on the New York State Thruway. The City of Syracuse is located approximately 50 miles to the west and the City of Albany is located approximately 90 miles to the east. Oneida County has a land area of 1,227 square miles and has within its boundaries two major urban centers; the Cities of Utica and Rome and an estimated population of 233,585 (2013 U.S. Census). Under the Oneida County Charter, Oneida County is divided into 23 legislative districts with an elected legislator representing each district on the Board of County Legislators. Among the major employers located in Oneida County are Oneida Indian Nation Enterprises, Mohawk Valley Health System and Resource Center for Independent Living. Pursuant to New York State Law, Oneida County is responsible for the local funding of mandated social service programs, such as Medicaid. See “Appendix A – The New York Counties” for a more detailed description of Oneida County.

Onondaga County

Onondaga County is located in the central New York region, has a land area of 780.3 square miles and is approximately 35 miles in length and 30 miles in width and an estimated population of 467,026 (2010 U.S. Census). Onondaga County is governed under a home rule charter, which provides for the separation of the executive and legislative functions. This charter was approved by voter referendum in 1961. The City of Syracuse is situated in the approximate center of Onondaga County and serves as the focus for commercial and business activities. Among the major employers located in Onondaga County are Upstate University Health System, Syracuse University and St. Joseph’s Hospital Health Center. Pursuant to New York State Law, Onondaga County is responsible for the local funding of mandated social service programs, such as Medicaid. Onondaga County, in conjunction with its underlying units, is responsible for providing police, fire, sanitation and water services, as well as the maintenance of streets, parks and recreational facilities. See “Appendix A – The New York Counties” for a more detailed description of Onondaga County.

Wayne County

Wayne County is located in upstate New York with the Wayne County Seat situated in the Village of Lyons. With a land area of 621 square miles and an estimated population of 92,473 (2013 U.S. Census), Wayne County is agricultural and residential in nature. Wayne County is governed by a 15-member Board of Supervisors, who are elected by the residents of the towns within Wayne County. Among the major employers located in Wayne County are IEC Electronics, Berry Plastics and Garlock Technologies. Pursuant to New York State Law, Wayne County is responsible for the local funding of mandated social service programs, such as Medicaid. Employment opportunities, as well as commercial and professional services are available within Wayne County, mainly in the various incorporated villages. Such opportunities and services are also available to Wayne County residents in the Cities of Rochester and Geneva. See “Appendix A – The New York Counties” for a more detailed description of Wayne County.

RATING

Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. (“S&P”) has assigned a rating of “___” to the Series 2015 Bonds. Any explanation of the significance of such rating may only be obtained from the rating agency furnishing the same. A credit rating is not a recommendation to buy, sell or hold securities. There is no assurance that the rating will continue for any given period of time or that they might not be revised downward or withdrawn entirely by the rating agencies, if in their judgment circumstances so warrant. None of the Authority, the New York Counties or the Underwriter has undertaken any responsibility to bring to the attention of the Holders of the Series 2015 Bonds any proposed revision or withdrawal or to oppose any such revision or withdrawal. Any such downward revision or withdrawal of the rating might have an adverse effect on the market price of the Series 2015 Bonds.

LITIGATION

Authority

To the Authority’s knowledge, as of the date of this Official Statement there is not pending or threatened, any litigation restraining or enjoining the issuance or delivery of the Series 2015 Bonds or questioning or affecting the validity of the Series 2015 Bonds or the proceedings or authority under which they are to be issued or which in any manner questions the right of the Authority to enter into the Trust Indenture or Loan Agreements or to secure the Series 2015 Bonds in the manner provided therein.

Oneida County

There is no action, suit, proceedings or investigation, at law or in equity, before or by any court, public board or body pending or, to the best knowledge of Oneida County, threatened against or affecting Oneida County to restrain or enjoin sale or delivery of Oneida County’s New York County Bonds or the levy and collection of taxes or assessments to pay same, or in any way contesting or affecting the validity of Oneida County’s New York County Bonds or any proceedings or authority of Oneida County taken with respect to the authorization, issuance or sale of Oneida County’s New York County Bonds or contesting the corporate existence or boundaries of Oneida County.

Onondaga County

There is no action, suit, proceedings or investigation, at law or in equity, before or by any court, public board or body pending or, to the best knowledge of Onondaga County threatened against or affecting Onondaga County to restrain or enjoin the issuance, sale or delivery of Onondaga County’s New York County Bonds or the levy and collection of taxes or assessments to pay same, or in any way contesting or affecting the validity of Onondaga County’s New York County Bonds or any proceedings or authority of Onondaga County taken with respect to the authorization, issuance or sale of Onondaga County’s New York County Bonds or contesting the corporate existence or boundaries of Onondaga County.

Wayne County

There is no action, suit, proceedings or investigation, at law or in equity, before or by any court, public board or body pending or, to the best knowledge of Wayne County threatened against or affecting Wayne County to restrain or enjoin the issuance, sale or delivery of Wayne County’s New York County Bonds or the levy and collection of taxes or assessments to pay same, or in any way contesting or affecting the validity of Wayne County’s New York County Bonds or any proceedings or authority of

Wayne County taken with respect to the authorization, issuance or sale of Wayne County’s New York County Bonds or contesting the corporate existence or boundaries of Wayne County.

SERIES 2015 BONDS NOT LIABILITY OF WISCONSIN OR NEW YORK

LEGAL MATTERS

All legal matters incidental to the issuance of the Series 2015 Bonds by the Authority are subject to the approval of Squire Patton Boggs LLP (US), New York, New York, Bond Counsel to the Authority. Certain legal matters will be passed upon by Orrick, Herrington & Sutcliffe LLP (as local bond counsel to Oneida County and Onondaga County) and Harris Beach PLLC (as local bond counsel to Wayne County). See Appendix C hereto for form of the approving opinion of Bond Counsel to the Authority, which will be delivered concurrently with the delivery of the Series 2015 Bonds. Certain legal matters are subject to the approval of von Briesen & Roper, s.c., Milwaukee, Wisconsin, counsel to the Authority in connection with the Series 2015 Bonds. Certain legal matters will be passed upon for the Underwriter by Hawkins Delafield & Wood LLP, New York, New York.

TAX MATTERS

In the opinion of Squire Patton Boggs (US) LLP, Bond Counsel, under existing law, INTEREST ON THE SERIES 2015 BONDS IS NOT EXCLUDED FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES. THE LEGAL DEFEASANCE OF THE SERIES 2015 BONDS MAY RESULT IN A DEEMED SALE OR EXCHANGE OF THE SERIES 2015 BONDS UNDER CERTAIN CIRCUMSTANCES; OWNERS OF THE SERIES 2015 BONDS SHOULD CONSULT THEIR TAX ADVISERS AS TO THE FEDERAL INCOME TAX CONSEQUENCES OF SUCH AN EVENT.

PROSPECTIVE PURCHASERS OF THE SERIES 2015 BONDS SHOULD CONSULT THEIR TAX ADVISERS AS TO THE FEDERAL, STATE AND LOCAL, AND FOREIGN TAX CONSEQUENCES OF THEIR ACQUISITION, OWNERSHIP AND DISPOSITION OF THE SERIES 2015 BONDS.

The Series 2015 Bonds are not qualified energy conservation bonds.

The following discussion is generally limited to “U.S. Owners”, meaning beneficial owners of Bonds that for United States federal income tax purposes are individual citizens or residents of the United States, corporations or other entities taxable as corporations created or organized in or under the laws of the United States or any state thereof (including the District of Columbia), and certain estates or trusts with specific connections to the United States. Partnerships holding Bonds, and partners in such partnerships, should consult their tax advisers regarding the tax consequences of an investment in the Series 2015 Bonds (including their status as U.S. Owners).

Information Reporting and Backup Withholding

General information reporting requirements will apply to payments of principal and interest made on Bonds and the proceeds of the sale of Bonds to non-corporate holders of the Series 2015 Bonds, and “backup withholding,” currently at a rate of 28%, will apply to such payments if the owner fails to provide an accurate taxpayer identification number in the manner required or fails to report all interest required to be shown on its federal income tax returns. A beneficial owner of Bonds that is a U.S. Owner generally can obtain complete exemption from backup withholding by providing a properly completed IRS Form W-9 (Request for Taxpayer Identification Number and Certification).

Medicare Tax Affecting U.S. Owners

For taxable years beginning after December 31, 2012, a U.S. Owner that is an individual or estate, or a trust not included in a special class of trusts that is exempt from such tax, is subject to a 3.8% Medicare tax on the lesser of (1) the U.S. Owner’s “net investment income” for the taxable year and (2) the excess of the U.S. Owner’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals is between $125,000 and $250,000, depending on the individual’s circumstances). A U.S. Owner’s net investment income generally includes interest income on, and net gains from the disposition of, Bonds, unless such interest income or net gains are derived in the ordinary course of a trade or business (other than a trade or business that consists of certain passive or trading activities). A U.S. Owner that is an individual, estate, or trust, should consult its tax adviser regarding the applicability of the Medicare tax.

Non-U.S. Owners

Under the Code, interest and OID on any Series 2015 Bond whose beneficial owner is not a U.S. Owner are generally not subject to United States income tax or withholding tax (including backup withholding) if the non-U.S. Owner provides the payor of interest on the Series 2015 Bonds with an appropriate statement as to its status as a non-U.S. Owner. This statement can be made on IRS Form W- 8BEN or a successor form. If, however, the non-U.S. Owner conducts a trade or business in the United States and the interest or OID on the Series 2015 Bonds held by the non-U.S. Owner is effectively connected with such trade or business, that interest or OID will be subject to United States income tax but will generally not be subject to United States withholding tax (including backup withholding). The foregoing is a brief summary of certain federal income tax consequences to a non-U.S. Owner. Non-U.S. Owners should consult their tax advisers regarding the tax consequences of an investment in the Series 2015 Bonds.

Foreign Account Tax Compliance Act

The Foreign Account Tax Compliance Act (“FATCA”) generally imposes a 30% withholding tax on interest payments and proceeds from the sale of interest-bearing obligations for payments made after the relevant effective date to (i) certain foreign financial institutions that fail to certify their FATCA status and (ii) investment funds and non-financial foreign entities if certain disclosure requirements related to direct and indirect United States shareholders and/or United States accountholders are not satisfied.

Under applicable Treasury regulations, the FATCA withholding tax of 30% will generally be imposed, subject to certain exceptions, on payments of (i) interest on Bonds on or after July 1, 2014, and (ii) gross proceeds from the sale or other disposition of Bonds on or after January 1, 2017, where such payments are made to persons described in the immediately preceding paragraph.

In the case of payments made to a “foreign financial institution” (generally including an investment fund), as a beneficial owner or as an intermediary, the FATCA withholding tax generally will be imposed, subject to certain exceptions, unless such institution (i) enters into (or is otherwise subject to) and complies with an agreement with the U.S. government (a “FATCA Agreement”) or (ii) is required by and complies with applicable foreign law enacted in connection with an intergovernmental agreement between the United States and a foreign jurisdiction (an “IGA”), in either case to, among other things, collect and provide to the U.S. or other relevant tax authorities certain information regarding U.S. Account holders of such institution. In the case of payments made to a foreign entity that is not a financial institution (as a beneficial owner), the FATCA withholding tax generally will be imposed, subject to certain exceptions, unless such entity either provides the withholding agent with a certification that it does not have any “substantial” U.S. Owner (generally, any specified U.S. Person that directly or indirectly owns more than a specified percentage of such entity) or identifies its “substantial” U.S. Owners.

If Series 2015 Bonds are held through a foreign financial institution that enters into (or is otherwise subject to) a FATCA Agreement, such foreign financial institution (or, in certain cases, a person paying amounts to such foreign financial institution) generally will be required, subject to certain exceptions, to withhold the 30% FATCA tax on payments of dividends or the items described above made to (i) a person (including an individual) that fails to comply with certain information requests or (ii) a foreign financial institution that has not entered into (and is not otherwise subject to) a FATCA Agreement and that is not required to comply with FATCA pursuant to applicable foreign law enacted in connection with an IGA. Coordinating rules may limit duplicative withholding in cases where the withholding described above in “Non-U.S. Holders” or “Information Reporting and Backup Withholding” also applies.

If any amount of, or in respect of, U.S. withholding tax were to be deducted or withheld from payments on Series 2015 Bonds as a result of a failure by an investor (or by an institution through which an investor holds the Series 2015 Bonds) to comply with FATCA, none of the Authority, any paying agent or any other person would, pursuant to the terms of the Series 2015 Bonds, be required to pay additional amounts with respect to any Series 2015 Bond as a result of the deduction or withholding of such tax. Non-U.S. Owners should consult their tax advisers regarding the application of FATCA to the ownership and disposition of Series 2015 Bonds.

FINANCIAL STATEMENTS

The audited financial statements as of December 31, 2014 of the New York Counties and additional information regarding the New York Counties have been filed by or on behalf of the New York Counties with the MSRB through EMMA.

SECONDARY MARKET DISCLOSURE/CONTINUING DISCLOSURE

In order to assist the Underwriter in complying with Rule 15c2-12 promulgated by the Securities and Exchange Commission (“Rule 15c2-12”), each New York County has undertaken in a written agreement (a “Continuing Disclosure Agreement”) for the benefit of the Holders of the Series 2015 Bonds to provide on an annual basis to the Authority and the MSRB through its EMMA system, on or before 180 days after the end of each fiscal year of such New York County, commencing with the fiscal year ending December 31, 2015, operating data and financial information of the type hereinafter described which is included in Appendix A to this Official Statement (the “Annual Information”), together with such New York County’s annual financial statements prepared in accordance with generally accepted accounting principles and audited by an independent firm of certified public accountants in accordance with generally accepted accounting standards, provided, however, that if audited financial statements are not then available, the New York Counties will provide unaudited financial statements and provide audited financial statements when they become available.

The Annual Information for each New York County will consist of the following: (a) operating data and financial information of the type included in Appendix A to this Official Statement (only to the extent that this information is not included in the audited financial statements of such New York County), together with (b) a narrative explanation, if necessary to avoid misunderstanding, regarding the presentation of financial and operating data concerning such New York County and in judging the financial and operating condition of such New York County.

In addition, the Authority has undertaken, for the benefit of the holders of the Series 2015 Bonds, to provide to the MSRB by and through its EMMA system, in a timely manner not later than ten business days after the occurrence of a listed event, the notices required to be provided by Rule 15c2-12 and described below (the “Notices”); provided, however, that the Authority shall have no obligation to provide Notices of the events listed in clauses (1), (2), (3), (11), (12) or (13) in the next paragraph, unless the Authority shall have received written notice thereof from the applicable New York County or the Trustee, or notice relating to a change in name of the Trustee, unless the Authority shall have received prior written notice thereof from the Trustee.

The Notices include notice of any of the following events with respect to the Series 2015 Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (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, IRS notices or other material events affecting the tax status of the Series 2015 Bonds; (7) modifications to the rights of holders of the Series 2015 Bonds, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Series 2015 Bonds, if material; (11) rating changes; (12) tender offers; (13) bankruptcy, insolvency, receivership or similar event of a New York County; (14) merger, consolidation or acquisition of or involving a New York County, if material; and (15) appointment of a successor or additional trustee, or the change in name of a trustee, if material. Each New York County has undertaken to provide to the Authority, in a timely manner, notices similar to the ones described above with respect to its New York County Bonds.

The sole and exclusive remedy for breach or default under a Continuing Disclosure Agreement is an action to compel specific performance of the undertakings of the defaulting New York County and/or the Authority, and no person, including any Holder and any Beneficial Owner of the Series 2015 Bonds, may recover monetary damages thereunder under any circumstances. The Authority or such defaulting New York County may be compelled to comply with their respective obligations under a Continuing Disclosure Agreement (i) in the case of enforcement of their obligations to provide information required

22 thereunder, by any Holder and any Beneficial Owner of Outstanding Series 2015 Bonds or by the Trustee on behalf of the Holders of Outstanding Series 2015 Bonds or (ii) in the case of challenges to the adequacy of the information provided, by the Trustee on behalf of the Holders of Outstanding Series 2015 Bonds. However, the Trustee is not required to take any enforcement action unless so directed by the Holders of not less than 25% in aggregate principal amount of Outstanding Series 2015 Bonds. A breach or default under a Continuing Disclosure Agreement will not constitute an Event of Default under the Trust Indenture. In addition, if all or any part of Rule 15c2-12 ceases to be in effect for any reason, then the information required to be provided under a Continuing Disclosure Agreement, insofar as the provision of Rule 15c2-12 no longer in effect required the providing of such information, will no longer be required to be provided.

The foregoing undertakings are intended to set forth a general description of the type of financial information and operating data that will be provided; the descriptions are not intended to state more than general categories of financial information and operating data; and where an undertaking calls for information that no longer can be generated because the operations to which it related have been materially changed or discontinued, a statement to that effect will be provided. Any Continuing Disclosure Agreement, however, may under certain circumstances be amended or modified without the consent of Holders of the Series 2015 Bonds. Copies of all of the Continuing Disclosure Agreements when executed by the parties thereto upon the delivery of the Series 2015 Bonds will be on file at the principal office of the Authority.

Each of the New York Counties has certified to the Authority that it has in the previous five years complied, in all material respects, with any previous undertakings pursuant to Rule 15c2-12.

FINANCIAL ADVISOR

The New York Counties have retained Fiscal Advisors & Marketing, Inc., Syracuse, New York, as financial advisor in connection with the issuance of the Series 2015 Bonds. Although Fiscal Advisors & Marketing, Inc. has assisted in the preparation of this Official Statement, Fiscal Advisors & Marketing, Inc. was not and is not obligated to undertake, and has not undertaken to make, an independent verification and assumes no responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.

UNDERWRITING

The Series 2015 Bonds are being purchased by FTN Financial Capital Markets (the “Underwriter”). The Underwriter has agreed to purchase the Series 2015 Bonds at an aggregate purchase price of $______(consisting of the principal amount of the Series 2015 Bonds of $______, less Underwriter’s discount of $______). The Bond Purchase Contract for the Series 2015 Bonds provides that the Underwriter will purchase all of the Series 2015 Bonds if any are purchased. The initial public offering prices or yields may be changed by the Underwriter.

The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, their respective responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

The Underwriter has provided the following four sentences for inclusion in this Official Statement. The Underwriter and its respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities.

Certain of the Underwriter and their respective affiliates have, from time to time, performed and may in the future perform, various investment banking services for the Authority. In the ordinary course of their various business activities, the Underwriter and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities, which may include default swaps) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the Authority. The Underwriter and its respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.

MISCELLANEOUS

The references herein and in the appendices hereto to the Series 2015 Bonds, the Act, the Bond Resolution, the Loan Agreements, the Sinking Fund Agreements, the Trust Indenture and the New York County Bonds are brief summaries of certain provisions thereof. Such summaries do not purport to be complete and reference is made to such statute and documents for full and complete statements therein. The agreements of the Authority with the Holders of the Series 2015 Bonds are fully set forth in the Trust Indenture, and neither any advertisement of the Series 2015 Bonds nor this Official Statement is to be construed as constituting an agreement with the purchasers of the Series 2015 Bonds. So far as any statements are made in this Official Statement involving matters of opinion, whether or not expressly so stated, they are intended merely as such and not as representations of fact. Copies of the documents mentioned in this paragraph are on file at the offices of the Authority and the Trustee.

The information relating to DTC and the book-entry only system described under the heading “The Series 2015 Bonds – Book-Entry Only System” has been furnished by DTC. Such information is believed to be reliable, but none of the Authority, the New York Counties or the Underwriter makes any representations or warranties whatsoever with respect to such information.

References to web site addresses set forth herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise herein, such web sites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement.

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APPENDIX A

THE NEW YORK COUNTIES

2440119.15 039533 OS

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ONEIDA COUNTY

Introduction

Oneida County (for purposes of the “ONEIDA COUNTY” section, the “County”) is located in central upstate New York, in the area commonly known as the Mohawk Valley. It is situated on the New York State Thruway. The City of Syracuse is located approximately 50 miles to the west and the City of Albany is located approximately 90 miles to the east. The County has a land area of 1,227 square miles and has within its boundaries two major urban centers; the Cities of Utica (2014 U.S. Census population estimate of 61,332) and Rome (2014 U.S. Census population estimate of 32,645). The estimated 2013 U.S. Census population for the County is 232,871.

Governance

Under the County Charter, the County is divided into 23 legislative districts with an elected legislator representing each district on the Board of County Legislators. The County Executive and County Comptroller are each elected by the voters at large to a four-year term. The County Executive is the Chief Executive of the County government while the County Comptroller is the Chief Fiscal Officer. The County Clerk, Sheriff, and the District Attorney are constitutional officials and are elected by the voters at large to four-year terms. The Commissioner of Finance, who is appointed by, and serves at the pleasure of the County Executive, is responsible for collection of taxes and other revenues and the custody of all public funds of the County. The County Board of Legislators meets at both regular and special meetings throughout the year. The County Board of Legislators reviews and adopts the annual County budget, levies taxes, reviews and approves any modifications to the budget, and authorizes the incurrence of all indebtedness of the County.

Budgeting

The Board of County Legislators adopts a budget each year, based on recommendations by the County Executive in October. After holding a public hearing, the budget is officially adopted by the Board of County Legislators in November. The Budget is not subject to referendum. Expenditures during the fiscal year may only be made pursuant to appropriations from the General Fund and other special purpose funds established by the County. However, the Board of County Legislators, on the recommendation of the County Executive, during the fiscal year may by resolution make additional appropriations from any unencumbered balance in appropriations, contingent funds or unanticipated revenues and, to a limited extent, by the issuance of budget notes. The fiscal year of the County is the calendar year.

Tobacco Settlement Securitization. The future revenue stream to which the County is entitled to as a result of a Master Settlement Agreement that was entered into by participating cigarette manufacturers, 46 states and six other U.S. jurisdictions in November 1998 in settlement of certain smoking-related litigation and the Consent Decree and Final Judgment related thereto was sold by the County to the Oneida Tobacco Asset Securitization Corporation (the “Corporation”) in December 2000. The Corporation issued bonds (the “2000 Tobacco Bonds”) to fund the purchase. Of the approximately $51 million in proceeds the County received, $40 million was set aside in an escrow fund to pay debt over a fourteen-year period. The remaining $11 million was used to fund capital projects for 2001, which eliminated the need for any new borrowing by the County for that year.

In August 2005, the Corporation participated in a pooled tobacco securitization transaction through the New York Counties Tobacco Trust IV (“NYCTTIV”) that defeased and restructured the 2000 Tobacco Bonds. The County realized approximately $6.3 million from this transaction which were used to fund various capital projects. In November 2005, the Corporation participated in a subsequent pooled

A-1 tobacco securitization transaction through the New York Counties Tobacco Trust V that realized additional net proceeds of approximately $14.3 million that was used for working capital purposes.

Investment Policy

The objectives of the Investment Policy the County are to minimize risk; to insure that investments mature when the cash is required to finance operations; and to insure a competitive rate of return. In accordance with this policy, the Commissioner of Finance or his/her authorized deputy is hereby authorized to invest all funds including proceeds of obligations and reserve funds in eligible forms of investment as authorized under §10 or §11 of the New York State General Municipal Law (GML), or as allowed pursuant to any other New York State statute, to include:

(1) Certificates of Deposit issued by a bank or trust company authorized to do business in New York State; (2) Time Deposit Accounts in a bank or trust company authorized to do business in New York State; (3) Obligations of New York State; (4) Obligations of the United States Government; (5) Obligations guaranteed by agencies of the United States of America, where payment of principal and interest are guaranteed by the United States of America; (6) Repurchase Agreements involving the purchase and sale of direct obligations of the United States of America; (7) Reciprocal deposit programs for deposits and investments including Insured Cash Sweep (ICS) or Certificate of Deposit Registry (CDAR) deposit placement programs in one or more "banking institutions: as defined in Banking Law §9-r, pursuant with §10 and §11 of the GML; (8) With approval of the State Comptroller, obligations issued pursuant to section 24.00 or 25.00 of the local finance law by any municipality, school district or district corporation in the State of New York other than the county of Oneida; (9) Obligations of the county of Oneida, but only with reserve funds established pursuant to GML §6 as delineated in GML §11 (3)(a)(1).

The Commissioner of Finance shall be responsible for determining the term of investments in order to insure available cash to meet current financial obligations. All investments made pursuant to this investment policy shall comply with the following conditions:

All investments made by the Commissioner of Finance or his/her designee shall comply with the aspects of New York State statutes to insure legal authorization for the investment program.

The statutes include, but are not limited to:

(1) Banking Law, Section 237 prohibits a savings bank from accepting a deposit from a local government. This also applies to Savings and Loan Associations. (2) GML §1 0(2)(a)(ii). "Banking institution" is defined for the purpose of a deposit placement program as any bank, trust company, savings bank, savings and loan association, or branch of a foreign corporation the deposits of which are insured by the Federal Deposit Insurance Corporation, which is incorporated, chartered, organized or licensed under the laws of this state or any other state or the United States (Banking Law § 9-r). (3) General Municipal Law Sections 10 and/or 11 provides that the governing body of any municipal corporation may authorize temporary investments of County monies which are not needed for immediate expenditures in special time deposit accounts or certificates of deposit issued by a bank or trust company located and authorized to do business in this

A-2

State, the use of reciprocal deposit programs, or as otherwise permitted - see §11 (2)(a)(2), (2)(b), and (3)(a). It further provides that such deposit(s) or certificate(s) be secured by FDIC coverage and/or a pledge of eligible securities, surety bond, eligible letter of credit, or irrevocable letter of credit issued in favor of the county, as defined therein.

Pensions and Other Post-Employment Benefits

The County’s annual pension cost due for 2012-2013 was $13,129,658 of which $7,851,062 was paid on February 1, 2013. The remaining $5,278,596 was amortized through the NYS Employer Contribution Stabilization Program (the “Program”). The County’s annual pension cost due for 2013-2014 was $13,830,024 of which $8,413,968 was paid on February 1, 2014. The remaining $5,416,056 was amortized through the Program. The County’s annual pension cost due for 2014-2015 was $13,726,652 of which $9,489,896 was paid on February 1, 2015. The remaining $4,236,756 was amortized through the Program and was subsequently paid in full on September 1, 2015. The County fully prepaid the outstanding principal amounts amortized for 2010 and 2011 during 2013 of $1,112,626 and $2,814,260, respectively. The County also prepaid the full amount of the 2014 amortization on January 29, 2015 for $5,416,056. The outstanding principal for all year’s amortizations is currently $8,580,629. The only amortized amount outstanding is currently $4,343,873 from 2013.

The County contracted with an actuarial firm to calculate its Other Post-Employment Benefits (“OPEB”) present value liability. The following table provides the County’s annual OPEB cost, the amount actuarially contributed to the plan, changes in the County’s net OPEB obligation and funding status for the fiscal year ending December 31, 2013 and December 31, 2014. The actuarial firm’s report is available upon request in the County Comptroller’s office. The aforementioned liability and Accounts Receivable Conversion (“ARC”) are recognized and disclosed per Governmental Accounting Standards Board 45 standards in the County’s 2013 and 2014 financial statements. $2,319,548 was paid in 2014 as pay as you go expenses to over 500 retired employees. The County has reserved $1,000,000 toward its OPEB liability.

Fiscal Year Ending December 31, Annual OPEB Cost and Net OPEB Obligation: 2013 2014

Annual required contribution (ARC) $8,114,506 $8,596,429 Interest on net OPEB obligation 917,447 1,190,518 Adjustment to ARC (1,172,777) (1,521,845) Annual OPEB cost (expense) 7,859,176 8,265,102 Contributions made (2,038,005) (2,319,548) Increase in net OPEB obligation 5,821,171 5,945,554 Net OPEB obligation - beginning of year 19,557,600 25,378,771 Net OPEB obligation - end of year $25,378,771 31,324,325

Percentage of annual OPEB cost contributed 25.9% 28.06%

Funding Status:

Actuarial Accrued Liability (AAL) $76,045,449 $81,115,622 Actuarial Value of Assets 0 0 Unfunded Actuarial Accrued Liability (UAAL) $76,045,449 $81,115,622

Funded Ratio (Assets as a Percentage of AAL) 0.0% 0.0%

A-3

Percentage of Fiscal Annual Annual QPEB Contribution Year Ended QPEB Cost Cost Contributed Made

2014 $8,265,102 28.1% $2,319,548 2013 7,859,176 25.9 2,038,005 2012 5,948,352 31.7 1,886,650 2011 5,419,780 48.7 2,637,660

Source: Audited financial statements. The above tables are not audited.

Recent Financial Developments

Audited financial results for the fiscal year ending December 31, 2013 show the County having an operating surplus of $1,657,659 with a budget surplus of $9,737,935.

The total General Fund balance at December 31, 2013 was approximately $35.4 million. Of this total, $12.5 million was designated for Fiscal Stability, $4.4 million was appropriated for the 2014 budget, and designations of $2,575,000 for pending tax certiorari judgments and claims, $1.7 million for Economic Growth and Community Development, $1 million for GASB 45 OPEB costs, $2.5 million for Health Insurance costs, $84,357 for NYS Retirement costs and $114,482 for “pay-as-you-go” capital projects. Approximately $1,708,000 was restricted for encumbrances and other program specific items and the remaining $8.8 million was unrestricted.

The 2014 adopted budget appropriated $4.4 million of the fund balance. Final audited General Fund results for 2014 show an operating surplus of $5.1 million and a budget surplus of $9.5 million. The primary reason for this surplus was the receipt of $12.9 million of unbudgeted revenue pursuant to a settlement agreement between the County, New York State and the Oneida Indian Nation which became effective on March 4, 2014. Of the $12.9 million received, $4.4 million was used to fund the budgeted deficit, eliminating the need to use fund balance as referenced above. An additional $3.1 million was appropriated during 2014 to fund new capital projects, and approximately $650,000 was paid to municipalities within the County to compensate them for lost property tax revenues resulting from the settlement. Sales tax receipts for 2014, while under budget, increased over the 2013 receipts by approximately $730,000.

The 2015 adopted budget includes a 0% property tax increase and appropriates $4.4 million of the General Fund balance. Revenues from the Oneida Indian Nation settlement are budgeted at $15,000,000. Sales tax is budgeted at $96.5 million which is an increase of .1% or $100,000 over the 2014 budget. Supplemental appropriations of fund balance were authorized throughout 2015 to fund various capital projects and to fund prepayment of amortized retirement balances. The modified appropriated fund balance is currently $15.8 million. Very early projections indicate a likely operating deficit but a budget surplus.

The 2016 budget proposed by the County Executive included a 0% property tax increase and appropriated $4.4 million of the General Fund balance. The budget was amended by the Board of Legislators to reduce expenditures by $969,414, with an equivalent reduction to the property tax levy. The tax levy change equates to a decrease of 1.4%. This amended budget was adopted on November 12, 2015.

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Top Employers

Approximate Number Name of Employees

Oneida Indian Nation Enterprises 4,500 Mohawk Valley Health System 4,029 Resource Center for Independent Living 1,935 Utica City School District 1,334 Metlife Inc. 1,200 Upstate Cerebral Palsy 1,145 Wal-Mart 950 Defense Finance and Accounting Service 950 Birnie Bus Services 923

Economic Development a. Griffiss Business and Technology Park

Griffiss Business and Technology Park (“Griffiss Park”) is a 3,500-acre multi-use business, technology and industrial park on the grounds of the former Griffiss Air Force Base in Rome. In 2014, Griffiss Park housed 75 companies with a total of approximately 5,700 employees. Major employers include the Air Force Research Laboratory, Defense Finance and Accounting Service, Eastern Air Defense Sector, UTC Aerospace, BAE Systems, Cathedral Corporation, ITT Technology, Premier Aviation, MGS Manufacturing, Birnie Bus Services and the Rome City School District.

More than $500 million in public and private funding has been invested in the development of Griffiss Park over the last 17 years. These capital projects included demolition of more than 2.5 million square feet of obsolete former military buildings and housing to make way for new development; construction of a new parkway and other roads to improve the transportation system; construction of a new public high school; a project to consolidate and improve space occupied by the Air Force Research Lab; construction of a new distribution center for Family Dollar, a research and development facility for Mascoma Corporation, a cellulosic fuel manufacturer, and new manufacturing plants for UTC Aerospace, MGS Manufacturing and Sovena USA; construction of new office buildings for various private sector uses; capital improvements to numerous facilities for industrial use; and infrastructure improvements to make various parcels shovel ready for development.

 In 2012, over $29.7 million was invested in private and public capital projects at Griffiss Park, including building construction, transportation improvements, and infrastructure development.

 Griffiss Park employees commute from 30 different counties including Oneida County.

 The Griffiss Institute (“GI”) facilitates the cooperation of private industry, academia and government in developing solutions to critical cyber security problems. Their services included: 300 students using the Prometric test center for IT testing services, tenants include BAE Systems, CUBRC, EVERIS, Quanterion,Cyber-Defense Institute & GI Malware Lab. STEM outreach trained 50 teachers, 20 schools and 4,800 students participated; hosted 35 summer interns; created 12 new jobs in the business incubator; facilitated 70 technology exchange meetings, 5 STEM competitions for students and 2 summer camps.

 Griffiss International Airport completed the rehabilitation of Nose Dock 784 and designs for Nose Docks 785 and 786. They completed a construction project for new tail doors for an

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Aviation Hangar, Building 100.  Griffiss International Airport recently completed its new $7.1 million airport terminal which includes a Customs Inspection Building. b. Additional Information

 Twenty-two pieces of public art have been leased or purchased to create Griffiss International Sculpture Garden. These sculptures are located along walking paths and heavily developed sections of Griffiss Park.

 Griffiss Land Development Corporation (GLDC) demolished the shop on March Street and AFRL demolished building 102 and 104.

 Griffiss Utilities Services Corporation (GUSC) is under construction on an $18 million project for a 15 megawatt biomass combined heat power plant.

 Groundbreaking on a new eye surgery center

Additional Local Economic Growth

The Oneida County Industrial Development Agency (OCIDA) is organized and operates to provide tax incentives for eligible projects and the Oneida County Local Development Corporation (OCLDC) is organized and operates to provide tax exempt bond financing. In 2012, OCIDA authorized twelve sale-leasebacks to promote economic development, private investment and job growth, including an anaerobic digester project with Matt Brewery and corporate expansions for both Indium Corporation and Universal Photonics, Inc./JH Rhodes.

New York State and Mohawk Valley EDGE have invested over $5 million in the pre-permitting, engineering and marketing of Marcy Nanocenter at SUNYIT, a 450-acre greenfield on the State University of New York Institute of Technology campus being marketed to the advanced manufacturing/semiconductor industry, and is preparing to invest more than $30 million in various infrastructure improvements, site grading, wetlands mitigation and road improvements to make this site more attractive to semiconductor and nanoelectronics companies. Construction on Quad C, a $1.5 billion nanotechnology project at SUNYIT located in the City of Utica is expected to open summer 2015. Quad C is expected to have more than 1,500 employees once the facility is fully functional (Utica Observer- Dispatch January 18, 2015).

Mohawk Valley EDGE continues to partner with Mohawk Valley Community College, Working Solutions, BOCES and other training providers to develop customized training programs for businesses.

Mohawk Valley EDGE continues to market the entire region to site selectors, developers and businesses around the globe who are seeking to expand their presence and invest in the northeast United States. Key development sites in the Mohawk Valley being aggressively marketed include the Griffiss Park, Oneida County Business Park, Route 5S North Industrial Park, Schuyler Business Park, West Frankfort Industrial Park, Dominick Assaro Business Park, and Utica Business Park.

Turning Stone Resort Casino

In November 2014, Turning Stone Resort Casino announced plans for a large $100 million luxury retail outlet and entertainment venue. The shopping center is expected to create 600 construction jobs and 500 part-time and full-time jobs.

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The enclosed shopping center will feature only luxury stores with approximately 60 stores. The 250,000-square-foot center will include a six-screen movie theater and a luxury bowling alley. Officials said the center could be expanded at a later date. A shopping center on the south side of the current resort in Verona is expected to open in fall 2016.

Northeast UAS Airspace Integration Research Alliance

In December 2014, Northeast UAS Airspace Integration Research Alliance (NUAIR Alliance) and Griffiss International Airport announced they were awarded $4 million in grant funding through the fourth round of Governor Cuomo’s competitive Regional Economic Development Council (REDC) process. The grant will support the installation of state-of-the-art instrumentation for tracking of unmanned aircraft systems (UAS) operations at Griffiss International Airport and at approved locations in Central and Northern New York, and the Mohawk Valley.

This investment will allow NUAIR and its alliance partners to deploy state-of-the-art range instrumentation which can track UAS in the air and provide safety-enhancing sense and avoid capabilities. This testing capability is the first of its kind at any UAS test site in the country, making Griffiss International Airport a strategic location for the emerging UAS industry.

Job Growth

The following is a partial listing of recently completed, on-going and pending projects in the County as well as the approximate number of jobs created, being created or to be created:

Project Type Status Jobs Created/Anticipated

 In December 2014, APAC Customer Services, a service provider for the telecommunications industry located in Utica, announced plans to hire 150 full-time employees for call center customer service operations. The positions are expected to be filled by March 2015.  MAXIMUS, a loan servicing company, has received an $848.4 million contract from the U.S. Department of Education and Office of Federal Student Aid and will move into offices at the semi-vacant Affiliated Computer Services' Xerox facility in Utica. The company plans to initially hire 150 employees and is committed to hiring former employees of Affiliated Computer Services, who were laid off earlier in the year. (Utica Observer-Dispatch October 3, 2013)  Varflex Corp., a manufacturer of electrical insulating sleeves used in a variety of industries, is looking to move and expand its operation in Rome (Oneida County). The $1.5 million expansion project will result in 5 additional jobs to its current workforce of 18. (Rome Sentinel August 16, 2013)  Nirvana Water, a manufacturer of bottled water located in Boonville (Oneida County), has received a $3.2 million loan granted by the New York Business Development Corp. The loan was used to buy new equipment that will allow Nirvana to increase sales 30 percent and add 50 jobs. (Utica Observer-Dispatch August 22, 2013)  Turning Stone Casino and Resort, located in Verona (Oneida County), opened a new entertainment complex that includes 3 new clubs and resulted in the addition of 1,250 new employees. The grand opening was held on July 18, 2013.

Source: New York State Labor Statistics, Mohawk Valley Region Business Expansions.

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Tax Information

Tax Levy Limitation Law

Prior to the enactment of Chapter 97 of the Laws of 2011 (the “Tax Levy Limit Law”) on June 24, 2011, all the taxable real property within the County has been subject to the levy of ad valorem taxes to pay the bonds and notes of the County and interest thereon without limitation as to rate or amount. However, the Tax Levy Limit Law imposes a tax levy limitation upon the County for any fiscal year commencing January 1, 2012 through June 15, 2016 or later as provided in the Tax Levy Limit Law, without providing an exclusion for debt service on obligations issued by the County, including the Series 2015 Bonds. As a result, the power of the County to levy real estate taxes on all the taxable real property within the County, without limitation as to rate or amount, may or may not be subject to statutory limitations, according to the formulas set forth in the Tax Levy Limit Law. The actual effect of the Tax Levy Limit Law would depend upon the interpretation of such law by a court of competent jurisdiction in the event of a legal challenge.

The Tax Levy Limit Law imposes a limitation on increases in the real property tax levy of the County, subject to certain exceptions. The Tax Levy Limit Law permits the County to increase its overall real property tax levy over the tax levy of the prior year by no more than the “Allowable Levy Growth Factor”, which is the lesser of one and two-one hundredths or the sum of one plus the Inflation Factor; provided, however that in no case shall the levy growth factor be less than one. The “Inflation Factor” is the quotient of: (i) the average of the 20 National Consumer Price Indexes determined by the United States Department of Labor for the twelve-month period ending six months prior to the start of the coming fiscal year minus the average of the National Consumer Price Indexes determined by the United States Department of Labor for the twelve-month period ending six months prior to the start of the prior fiscal year, divided by: (ii) the average of the National Consumer Price Indexes determined by the United States Department of Labor for the twelve-month period ending six months prior to the start of the prior fiscal year, with the result expressed as a decimal to four places. The County is required to calculate its tax levy limit for the upcoming year in accordance with the provision above and provide all relevant information to the State Comptroller prior to adopting its budget. The Tax Levy Limit Law sets forth certain exclusions to the real property tax levy limitation of the County, including exclusions for certain portions of the expenditures for retirement system contributions and tort judgments payable by the County. The governing board of the County may adopt a budget that exceeds the tax levy limit for the coming fiscal year, only if the governing board of the County first enacts, by a vote of at least sixty percent of the total voting power of the governing board of the County, a local law to override such limit for such coming fiscal year.

The Tax Levy Limit Law does not contain an exception from the levy limitation for the payment of debt service on either outstanding general obligation bonds or notes of the County or such indebtedness incurred after the effective date of the Tax Levy Limit Law. As such, there can be no assurances that the Tax Levy Limit Law will not come under legal challenge for violating (i) Article VIII, Section 12 of the State Constitution for not providing an exception for debt service on obligations issued prior to the enactment of the Tax Levy Limit Law, (ii) Article VIII, Section 10 of the State Constitution by effectively eliminating the exception for debt service to general real estate tax limitations, and (iii) Article VIII, Section 2 of the State Constitution by limiting the pledge of its faith and credit by a municipality or school district for the payment of debt service on obligations issued by such municipality or school district. Each of the County’s 2013, 2014 and 2015 tax levies were below the respective limitations as prescribed by the Tax Levy Limit Law.

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Real Property Tax Rebate

Chapter 59 of the Laws of 2014 (“Chapter 59”) includes provisions which provide a refundable personal income tax credit to real property taxpayers in counties, school districts and certain other municipal units of government. Real property taxpayers in certain other municipal units of government are eligible for this credit in the 2015 and 2016 taxable years of those real property taxpayers. The eligibility of real property taxpayers for the tax credit in each year depends on such jurisdiction’s compliance with the provisions of the Tax Levy Limitation Law. Municipal units of government, other than school districts, must have their budgets in compliance for their 2015 and 2016 fiscal years. Such budgets must be within the tax cap limits set by the Tax Levy Law for the real property taxpayers to be eligible for this personal income tax credit. The affected jurisdictions include counties, cities (other than any city with a population of one million or more and its counties), towns, villages, school districts (other than the dependent school districts of New York City, Buffalo, Rochester, Syracuse and Yonkers, the latter four of which are indirectly affected by applicability to their respective city) and independent special districts.

Eligible homeowners do not need to do anything to receive the credit. The Tax Department will review eligibility data and calculate the credit for all qualifying taxing jurisdictions. In the Fall of each of the program’s three years (2014, 2015, 2016), the department will mail eligible taxpayers a single check that will be the total of the credits for each jurisdiction that is in compliance. Certain additional restrictions on the amount of the personal income tax credit are set forth in Chapter 59 in order for the tax cap to qualify as one which will provide the tax credit benefit to such real property taxpayers. The refundable personal income tax credit amount is increased in the second year if compliance occurs in both taxable years.

For the second taxable year of the program, the refundable personal income tax credit for real property taxpayers is additionally contingent upon adoption by the municipal unit of a state approved “government efficiency plan” which demonstrates “three year savings and efficiencies of at least one percent per year from shared services, cooperation agreements and/or mergers or efficiencies”. Municipalities, school districts and independent special districts must provide certification of compliance with the requirements of the new provisions to certain state officials in order to render their real property taxpayers eligible for the personal income tax credit.

While the provisions of Chapter 59 do not directly further restrict the taxing power of the County, they do provide an incentive for such tax levies to remain within the tax cap limits established by the Tax Levy Law. The implications of this for future tax levies and for operations and services of the County are uncertain at this time.

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Assessment Roll

The following table sets forth the County’s assess roll for the County’s fiscal years ending in 2014, 2015 and 2016:

Tax Roll Year 2014 2015 2016

County Taxable Valuation $7,170,950,368 $7,237,302,562 $7,227,171,904

NYS Equalization Ratio (1) 70.92% 70.17% 65.35%

Full Valuation (2) (3) $10,110,894,636 $10,313,787,387 $11,054,696,352

(1) Rounded. (2) Full Valuation figures are calculated using the NYS Equalization Rates of each Town within the County. (3) Full Valuation of Real Estate Taxable for County purposes.

Tax Rate Per $1,000

Years Ending December 31, Towns/Cities 2013 2014 2015 Annsville $11.94 $11.46 $11.66 Augusta 10.36 9.92 10.09 Ava 7.03 7.14 7.07 Boonville 10.60 10.70 10.44 Bridgewater 7.34 7.63 8.12 Camden 304.86 302.73 298.65 Deerfield 42.27 42.87 42.26 Florence 35.71 36.99 36.73 Floyd 7.31 7.36 7.17 Forestport 7.53 7.58 7.42 Kirkland 10.57 10.36 10.84 Lee 216.06 218.00 214.32 Marcy 9.17 8.91 8.61 Marshall 10.77 10.39 10.21 New Hartford 8.09 7.88 7.91 Paris 7.11 6.66 7.06 Remsen 10.93 11.77 12.06 Rome 9.39 9.52 9.34 Sangerfield 10.21 10.53 10.78 Sherrill N/A(2) N/A(2) N/A(2) Steuben 6.95 7.04 6.93 Trenton 10.65 9.83 9.73 Utica 10.28 10.33 10.14 Vernon 9.37 9.53 9.47 Verona 8.82 9.02 9.07 Vienna 11.13 11.30 11.23 Western 12.05 12.22 11.89 Westmoreland 10.67 10.60 10.69 Whitestown 9.87 9.99 10.00

(1) Substantial change from prior year due to revaluation. (2) The Town of Vernon incorporated the City of Sherrill in its tax rate beginning in 2012.

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Tax Collection Record

Years Ending December 31: 2013 2014 2015 Total Tax Levy (warrant) $71,878,245 $72,220,751 $72,514,919 Uncollected End of Year 5,659,041 4,803,400 5,774,641 % Uncollected(1) 7.87% 5.99% 7.96%(2)

(1) Uncollected balance is less than 1% by the time foreclosure proceedings are completed. (2) Uncollected as of October 31, 2015.

Tax Collection Procedure

Real Property is assessed for taxation by local assessors in each Town and the Cities of Utica and Rome and is placed on the respective tax rolls. The City of Sherrill is included as part of the Town of Vernon. There is no County Board of Assessors.

Each town tax receiver is required to pay to the respective town the full amount levied for town and town special district purposes. The balance of collected taxes is remitted to the County Commissioner of Finance. After March 31, uncollected County taxes of the cities and uncollected town taxes become the responsibility of the Commissioner of Finance.

From January through March the following penalties accrue with respect to delinquent taxes: no penalty if paid within the first 30 days, 1% penalty if paid during the next 30 days and 1-1/2%, if paid during the next 30 days. After the return of the tax rolls to the County Commissioner of Finance on April 1, delinquent taxes are assessed a flat penalty of 5% and accumulate interest of 10% per annum. The County holds its annual tax sale in December for the current year’s taxes.

Taxes for County purposes apportioned to the areas of the County outside the Cities of Utica and Rome are levied together with taxes for town and special district purposes as a single bill. The towns and special districts receive the full amount of their levies annually out of the first amounts collected on the combined bills. The County assumes enforcement responsibility for all taxes levied in the towns and special districts and for unpaid County taxes in the Cities of Utica and Rome. Uncollected outside-city school district and village taxes are assumed by the County for enforcement. Any such taxes remaining unpaid at year-end are relevied as County taxes on December 31st.

County Sales Tax

On July 14, 1999, the County Legislators extended a resolution dated October 27, 1982 imposing a County-wide sales tax of 3%.

The current distribution of sales tax revenues is as follows:

(1) The Cities of Utica and Rome (the “Cities”) receive 1-1/2% of the collections within their city boundaries and the County keeps the remaining 1-1/2%.

(2) The County shares the 3% collected outside the cities with the towns and villages in the County and the City of Sherrill based upon equalized assessed valuation; 1-1/2% is distributed to said Towns and Villages and City of Sherrill and 1-1/2% is retained by the County.

The County also imposed, on September 1, 1992 an increase to the sales tax by 1%. In July, 2007, the New York State Legislature (with the Governor signing into Law) authorized the extension of

A-11 the County’s 1% additional sales tax, originally passed in 1992, until November 30, 2009. This tax is due to expire on November 30, 2015. The County anticipates this tax will be renewed.

The distribution of the additional 1% is as follows:

(1) The cities of Utica and Rome receive 1/2% of the collections within their city boundaries and the County keeps the remaining 1/2%.

(2) The County shares the 1% collected outside the cities with the towns and villages in the County by the following:

The County dedicates the first $1,500,000 to the Towns and Villages after the County receives in the aggregate $18,500,000 from the additional 1% sales tax. The City of Sherrill also receives a portion based on population.

In 2004, the Board of County Legislators adopted a resolution of necessity and the New York State Legislature passed legislation (with the Governor signing into law) authorizing the County to impose an additional increase to the sales tax of 1.5%. The tax began March 1, 2005. This tax was reduced to 1% effective September 1, 2006 and further reduced in December 1, 2007 to ¾% until November 30, 2013. All of this 3/4% tax is retained by the County.

Additional Tax Information

Real property subject to County taxes is assessed by the component towns and cities. Veterans’ and senior citizens’ exemptions are offered to those who qualify.

More than 75% of the total assessed valuation of the County consists of residential, commercial, and public service properties.

The residential median arm’s length sale price in the County is approximately $105,000. Equalization rates are established by New York State yearly and vary by municipality.

COUNTY INDEBTEDNESS

Constitutional Requirements

The New York State Constitution limits the power of the County (and other municipalities and school districts of the State) to issue obligations and to contract indebtedness. Such constitutional limitations include the following, in summary form, and are generally applicable to the Series 2015 Bonds:

Purpose and Pledge. The County shall not give or loan any money or property to or in aid of any individual, or private corporation or private undertaking or give or loan its credit to or in aid of any of the foregoing or any public corporation. The County may contract indebtedness only for County purposes, and shall pledge its faith and credit for the payment of principal of and interest thereon.

Payment and Maturity. The County is authorized by the State Constitution to contract debt for objects or purposes which the State Legislature has determined to have a “period of probable usefulness” and the maximum maturity of such debt may not exceed the period of probable usefulness of the object or purpose or, in the alternative, the weighted average period of probable usefulness of the several objects or purpose for which it is contracted. Bonds must mature in annual installments and may be issued to finance any object or purpose for which a “period of probable usefulness” has been determined by the State Legislature.

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The following table sets forth the indebtedness of the County evidenced by bonds and notes as of the December 31 in 2012, 2013 and 2014:

Fiscal Years Ending December 31, 2012 2013 2014 Bonds $133,805,692 $133,047,017 $146,037,060 Bond Anticipation Notes 0 0 6,382,504 Revenue Anticipation Notes 0 0 0 Other Debt 0 0 0

Total Debt Outstanding $133,805,692 $133,047,017 $152,419,564

Details of Outstanding Indebtedness

The following table sets forth the indebtedness of the County evidenced by bonds and notes as of November 24, 2015.

Amount Type of Indebtedness Maturity Outstanding

Bonds 2016-2045 $164,682,509

Bond Anticipation Notes: Energy Improvements at various County Buildings January 22, 2016 2,465,000(1) Construction of Terminal Building at Griffiss Airfield May 20, 2016 3,617,507

Environmental Facilities Corporation – Short Term Financing March 27, 2017 4,096,456(2)

Total Bond Anticipation Notes $ 6,561,456 Total Indebtedness $174,861,472

(1) To be refunded with proceeds the Series 2015 Bonds. (2) To be partially converted to long-term financing through the Environmental Facilities Corporation at a future date.

Debt Limit

The County has the power to contract indebtedness for any lawful County purpose so long as the principal amount thereof shall not exceed seven per centum of the five year average full valuation of taxable real estate of the County and subject to certain enumerated exclusions and deductions such as water and certain sewer facilities and cash or appropriations for current debt service. The constitutional method for determining average full valuation is calculated by taking the assessed valuations of taxable real estate for the last five completed assessment rolls and applying thereto the ratio which such assessed valuation bears to the full valuation; full valuation is determined by the New York State Office of Real Property Services or such other State agency or officer as the State Legislature shall direct.

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The following table sets forth indebtedness of the County, the debt limit, and net debt-contracting margin evidenced by bonds and notes as of November 24, 2015:

Five-Year Average Full Valuation ...... $10,406,039,092 Debt Limit - 7% thereof ...... 728,422,736

Inclusions: Bonds ...... $164,682,509 Bond Anticipation Notes ...... 6,082,507 EFC Short Term Financing ...... 4,096,456 Total Inclusions ...... $174,861,472

Exclusions: Appropriations ...... $ 0 Sewer Indebtedness(1) ...... 5,519,915 Total Inclusions ...... $5,519,915

Total Net Indebtedness Subject to Debt Limit ...... $169,341,557

Net Debt-Contracting Margin ...... $559,081,179

Percent of Debt Contracting Power Exhausted ...... 23.25%

(1) Pursuant to Section 124.10 of the Local Finance Law.

Estimate of Obligations to be Issued

The County closed on short term financing with New York State Environmental Facilities Corporation (NYSEFC) to fund Phase I and IIA rehabilitation/replacement project in and for the Oneida County Sewer District. In February 2010, the County began collecting a $1.05/thousand gallon wastewater surcharge to the communities affected by the consent order to fund the repayment of the EFC loan. See “Consent Order” herein. The project cost for these two (2) phases are projected to be $25.8M. EFC has given the County $4M principal forgiveness on this loan so the net amount borrowed will be $21.8M. Short term grid notes will be converted to 30 fixed rate loans this June that provide a 50% interest rate subsidy.

The County has closed on short-term funding through NYSEFC for two more phases of the project; Sauquoit Creek Pumping Station and Forcemain Upgrades – Planning and Design Services (Phase 5a), and Water Pollution Control Plant Upgrades (Phase 6b). The anticipated costs of these phases are $3,000,000 and $35,000,000, respectively. The County anticipates bonding for these phases through NYSEFC at a later date and has begun initial draws on short term grid notes. Long term fix rate loans with a fifty percent interest rate subsidy are not likely to close until 2018.

In January 2015, the County authorized an additional $117,000,000 for upgrades to the Sauquoit Creek Pump Station and new forcemain system and upgrades to the solids handling facilities at the Water Pollution Control Plant. This is the last phase of projects to comply with the Consent Order. The County’s application to EFC is under review for these projects and long term loans may be issued in several stages from 2019 to 2023.

All debt issued for sewer improvements is repaid entirely by the part-county sewer district rate payers, not by the County. Over the next decade it is projected that a typical single family household in the sewer district would incur an increase in sewer tax of $225, from approximately $45 to $270 annually.

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The County has authorized $3,468,000 bonds to fund energy improvement projects in many of its facilities. This project is planned to be financed with the County’s Bonds which are expected to provide a 70% federal interest subsidy. The County issued $2,465,000 bond anticipation notes on January 23, 2014 as the first borrowing against said authorization. The bond anticipation notes were renewed on January 23, 2015 and mature on January 22, 2016.

Debt Ratios

The following table sets forth certain ratios relating to the County’s indebtedness as of November 24, 2015:

Percentage Amount of Per of Full Indebtedness Capita(a) Valuation(b)

Gross Direct Indebtedness (c) $174,861,472 $750.89 1.58% Net Direct Indebtedness (c) 169,341,557 727.19 1.53 Gross Direct Plus Net Overlapping Indebtedness (d) 331,728,276 1,424.52 3.00 Net Direct Plus Net Overlapping Indebtedness (d) 326,208,361 1,400.81 2.95

Note: (a) The County’s 2014 estimated population is 232,871 . (See “Population Trends” herein.) (b) The County’s full valuation of taxable real estate for 2016 is $11,054,696,352. (See “Valuations, Rates and Tax Levies” herein.) (c) See “Debt Statement Summary” herein. (d) The County’s estimated applicable share of net underlying indebtedness is $156,866,804. (See “Underlying Indebtedness” herein).

State Aid

In 2015, budgeted State Aid represents approximately 19.8% of the County’s General Fund revenues. Nearly all of the State Aid received by the County is formula-based assistance for specific mandated human service programs.

The New York State Budget for the fiscal year beginning April 1, 2015 was enacted on March 31, 2015. While counties continue to govern under stressful fiscal conditions, the 2015-2016 State budget includes mandate relief actions and tools designed to provide counties with savings, funding or flexibility to manage more efficiently. The final budget included the zero percent Growth Cap in local Medicaid costs. Now any increases in Medicaid costs are funded by the State. Additionally, federal savings related to the Affordable Care Act continue to generate positive results for counties with expected federal ACA savings to lower most counties’ Medicaid costs by about four percent in 2015 compared to what they paid in 2014.

State Comptroller’s Fiscal Stress Monitoring System

The State Comptroller has reported that New York State’s school districts and municipalities are facing significant fiscal challenges. As a result, the Office of the State Comptroller has developed a Fiscal Stress Monitoring System (“FSMS”) to provide independent, objectively measured and quantifiable information to school district and municipal officials, taxpayers and policy makers regarding the various levels of fiscal stress under which the State’s school districts and municipalities are operating.

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The fiscal stress scores are based on financial information submitted as part of each school district’s ST-3 report filed with the State Education Department annually, and each municipality’s annual report filed with the State Comptroller. Using financial indicators that include year-end fund balance, cash position and patterns of operating deficits, the system creates an overall fiscal stress score which classifies whether a school district or municipality is in “significant fiscal stress”, in “moderate fiscal stress,” as “susceptible to fiscal stress” or “no designation”. Entities that do not accumulate the number of points that would place them in a stress category will receive a financial score but will be classified in a category of “no designation.” This classification should not be interpreted to imply that the entity is completely free of fiscal stress conditions. Rather, the entity’s financial information, when objectively scored according to the FSMS criteria, did not generate sufficient points to place them in one of the three established stress categories.

The most current applicable report of the State Comptroller designates the County as “No Designation.”

Litigation

There is no action, suit, proceedings or investigation, at law or in equity, before or by any court, public board or body pending or, to the best knowledge of the County, threatened against or affecting the County to restrain or enjoin sale or delivery of the Series 2015 Bonds and Notes or the levy and collection of taxes or assessments to pay same, or in any way contesting or affecting the validity of the Series 2015 Bonds and Notes or any proceedings or authority of the County taken with respect to the authorization, issuance or sale of the Series 2015 Bonds and Notes or contesting the corporate existence or boundaries of the County.

From 1970 until March 2014, the County was involved in extensive litigation against the Oneida Indians. This included land claims brought by three Oneida tribes which were both resolved, the smaller case by payment of $8,360 plus interest made with state funds and the larger one by judgment in the County’s favor in 2011. Additionally, in the years 2005-2008, three more suits were commenced between the County and the local Oneida tribe, known as the Oneida Indian Nation of New York (the “Nation”). This litigation included a dispute over taxability of Nation-owned real property, the assessments of those parcels, and the US government’s decision to accept some Nation-owned parcels into trust. Settlement of all pending litigation was reached between the County, Madison County, the Nation and New York State in 2013, and became effective upon approval of Federal District Court Judge Kahn on March 4, 2014. There remains no pending litigation between the County and the Oneida Indians. The settlement exempts Nation-owned parcels from property taxes, but on balance is expected to provide significant financial benefit to the County. Specifically, its terms are summarized as follows:

Tribal Revenue Sharing with State and Local Governments and Gaming Exclusivity. Under the agreement, the Oneida Nation will receive exclusive rights to casino gaming in a ten county region of Central New York. In exchange, the Nation will devote 25% of its net gaming revenue from its slot machines to the State of New York. Based on current Oneida gaming revenues, that would be approximately $50 million annually to the State. From the State share there would be distributed to the County, as the host county, 25% of the State’s payment annually and in addition the County will receive $2.5 million annually from the State share to settle back property tax claims. Payments commenced in 2014, with the first payment reflecting a portion of the first quarter of 2014. Quarterly payments followed in 2014 totaling $12,873,565.

Settling Land into Trust. Under the settlement, the Oneida Nation will agree to a permanent cap of approximately 25,000 acres of land which may be taken into trust by the Department of Interior as Nation land. New York State, Oneida County and Madison County withdrew their case challenging land into trust. The Nation expressly waives its rights of sovereignty over any land over the cap amount.

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Ending Unfair Competition. The settlement requires the Oneida Nation to impose a Nation sales tax that equals or exceeds the State’s and counties’ sales, use and occupancy taxes. Under the agreement:

The Nation sales tax would apply to all cigarettes, motor fuel, and all other sales by Indian retailers to non-Indians.

The Nation must adhere to minimum pricing standards for cigarette products.

The Nation must use sales tax revenues only for the same types of governmental programs to which the State and Counties devote their tax revenues.

It should be noted that a separate claim, brought by the Stockbridge-Munsee Tribe of Indians involving a much smaller amount of land in Oneida County was dismissed in 2014. A petition for Certiorari to the United States Supreme Court was denied on March 2, 2015.

Factors Affecting Financings of the State and Municipalities of the State

There are certain potential risks associated with an investment general obligations of the County, and investors should be thoroughly familiar with this Official Statement, including its appendices, in order to make an informed investment decision. Investors should consider, in particular, the following factors:

The County’s credit rating could be affected by circumstances beyond the County’s control. Economic conditions such as the rate of unemployment and inflation, termination of commercial operations by corporate taxpayers and employers, as well as natural catastrophes, could adversely affect the assessed valuation of County property and its ability to maintain fund balances and other statistical indices commensurate with its current credit rating. Accordingly, a decline in the County’s credit rating could adversely affect the market value of the County’s general obligation bonds.

The financial condition of the County as well as the market for the County’s general obligation bonds could be affected by a variety of factors, some of which are beyond the County’s control. There can be no assurance that adverse events in the State, including, for example, the seeking by a municipality of remedies pursuant to the Federal Bankruptcy Act or otherwise, will not incur which might affect the market price of and the market for the County’s general obligation bonds. If a significant default or other financial crisis should occur in the affairs of the State or at any of its agencies or political subdivisions thereby further impairing the acceptability of obligations issued by borrowers within the State, both the ability of the County to arrange for additional borrowings and the market for and market value of outstanding debt obligations could be adversely affected.

The County relies in part on State aid to fund its operations. There can be no assurance that the State appropriation for State aid to counties will be continued in future years, either pursuant to existing formulas or in any form whatsoever. State aid appropriated and apportioned to the County can be paid only if the State has such monies available therefore. The availability of such monies and the timeliness of such payment may be also affected by a delay in the adoption of the State budget and other circumstances, including state fiscal stress. In any event, State aid appropriated and apportioned to the County can be paid only if the State has such monies available therefore.

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ONONDAGA COUNTY

Introduction

The County of Onondaga (for purposes of the “ONONDAGA COUNTY” section, the “County”) is located in the central New York region, has a land area of 780.3 square miles and is approximately 35 miles in length and 30 miles in width. The County is governed under a home rule charter, which provides for the separation of the executive and legislative functions. This charter was approved by voter referendum in 1961. The 2010 U.S. Census showed a population of 467,026 for Onondaga County, which included a population of 145,170 for the City of Syracuse. The City of Syracuse is situated in the approximate center of the County and serves as the focus for commercial and business activities. Pursuant to New York State Law, the County is responsible for the local funding of mandated social service programs, such as Medicaid. The County, in conjunction with its underlying units, is responsible for providing police, fire, sanitation and water services, as well as the maintenance of streets, parks and recreational facilities.

Governance

Onondaga County was established in 1794 and is comprised of separate municipalities, which include the City of Syracuse, 19 towns and 15 villages. The Onondaga Indian Reservation is also located in the County. In 1962, a County Charter became effective which divided the County into 24 legislative districts with an elected legislator representing each district in the County Legislature. Under the County Charter, a county executive was established to administer county government. The County Executive is the Chief Executive Officer and Chief Budget Officer of County government. The County Comptroller has responsibility for accounting and auditing of receipts and disbursements and is the Chief Accounting Officer. The County Executive and County Comptroller are elected to four-year terms. The County Clerk, Sheriff, and District Attorney are constitutional officials and are also elected to four-year terms. By Local Law No. 9 of 1995, the County merged the Division of Management and Budget into the Department of Finance, to be administered by the position of Chief Fiscal Officer. The Chief Fiscal Officer, who is appointed by and serves at the pleasure of the County Executive, is responsible for collection of taxes and other revenues, the custody and disbursement of all public funds of the County, and for the issuance of bonds, bond anticipation notes, and other financial offerings as provided for in the State Local Finance Law. Pursuant to Local Law No. 11 of 1996, twenty-four legislative districts were reduced to nineteen districts effective January 1, 2002. Pursuant to Local Law No. 26 of 2010, the nineteen legislative districts were further reduced to seventeen districts effective January 1, 2012.

Transportation

Approximately 60 million people live within a 350-mile radius of Onondaga County. This radius includes the populations of Boston, New York City, Philadelphia, Baltimore, Pittsburgh, Toronto and Montreal. The County’s central location is enhanced by its excellent transportation infrastructure and systems.

Air passenger service is provided by five major airlines and fifteen commuter airlines, offering approximately 125 daily arrivals and departures. The County is also served by three major air cargo carriers. Total passengers for 2014 (enplaned and deplaned) were 2,001,314, a .5% decrease as compared to 2013. In 2011 the Syracuse Regional Airport Authority was established and in March 2014 the FAA approved the transfer of the operating certificate from the City to the Authority. See “Economic Development” herein.

Onondaga County is served by the railroad facilities of CSX (formerly Conrail) and Amtrak, which maintain terminals within the County. CSX’s computerized rail yard has the capacity to handle

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2,200 cars per day, while Amtrak Rail serves Central New York travelers with daily departures from the inter-modal transportation center.

Water transportation is provided by the New York State Canal Corporation, a subsidiary of the New York State Thruway Authority. The system, designated as a National Heritage Corridor by the U.S. Congress, carries boaters the Niagara River with the Hudson River and the St. Lawrence Seaway, encompassing 524 miles. A major Barge Canal Terminal, located just one mile from downtown Syracuse, is being redeveloped for recreational boating uses by the New York State Thruway Authority, the City and private developers. The region is also served by the Port of Oswego, a deep-water port on Lake Ontario.

Onondaga County has been appropriately named the “Crossroads of New York State” due to the fact that the State’s two major interstate routes – the east-west New York State Thruway (I-90) and the north-south Interstate 81 intersect just north of the City of Syracuse. The New York State Thruway is accessed by six interchanges within the County. Interstate 690 forms an east-west axis through the County and Interstate 481 links the City of Fulton and surrounding towns. Also, there are more than 2,600 miles of highways, roads, and streets throughout the County.

More than 150 trucking companies, including the nation’s top 12 carriers of general freight, service the Onondaga County area.

Bus service is provided by two independent carriers, as well as by CENTRO, which is operated by the Central New York Regional Transportation Authority, and provides a high level of public transportation service to the County. Inter-city service is provided by several bus lines including Greyhound, Trailways and Stagecoach’s Megabus. CENTRO operates an inter-modal transportation center adjacent to the regional market and in close proximity to NBT Bank Stadium and Destiny USA. The center provides mass transit lineage for rail and bus service. A new $18.8 million downtown CENTRO hub opened in 2012.

Higher Education

Onondaga County is a center for higher learning, with over 40,000 students currently attending colleges within the County. The Central New York region houses the third largest concentration of colleges and universities in the nation. Syracuse University (SU) is a highly regarded private college, offering a diverse portfolio of undergraduate and graduate degrees to its approximately 21,200 full and part-time students. Syracuse University’s Maxwell School of Citizenship and Public Affairs and Newhouse School of Communications are recognized as leaders in the field of public administration and journalism, respectively. It also has the School of Law and the Whitman School of Management’s MBA program among its many advanced degree programs.

Also located within the County are Le Moyne College, a Jesuit-run liberal arts college (3,400 students); the State University of New York’s Upstate Medical University, the largest medical school in upstate New York (1,600 students); and the SUNY College of Environmental Science and Forestry (2,500 students). In addition, over 12,500 students attend Onondaga Community College (OCC), a two-year college that is part of the State University of New York system.

Over 90% of County residents over 25 have a high school education or higher, with 33% possessing a Bachelor’s Degree or higher (US Census Bureau, 2013 American Community Survey 1-year estimates) putting the County at or above State and national levels.

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Health and Medicine

Five of the County’s largest employers are in the health care sector and three of the four major hospitals have recently completed or are continuing construction plans in 2015. University Hospital in Syracuse is part of SUNY Upstate Medical University and is the only academic medical center in Central New York. It recently acquired Community General Hospital (renamed Upstate University Hospital at Community General) and the combined 2014 inpatient discharges totaled 26,650. The largest employer in the County, it is the home of the regional neurosurgery center and one of the country’s eleven Joslin Centers for Diabetes. It is also the region’s trauma center, burn center, kidney transplant and pediatric emergency center. St. Joseph’s Hospital Health Center (25,482 discharges) and Crouse Hospital (19,916 discharges) collectively provide a regional neonatal center, a high-risk obstetrics center and a cardiac surgery and cardiology program. In all, the County’s health care system includes the aforementioned hospitals and the Syracuse Veterans Medical Center, over 1,800 practicing physicians, two mental health centers, numerous ambulatory care programs, and a full range of long-term care facilities. Area hospitals operate approximately 2,006 staffed hospital beds. In addition, there are approximately 2,900 beds in thirteen extended care facilities and nursing homes.

Culture and Recreation

Onondaga County offers a variety of cultural, recreational and entertainment opportunities.

Syracuse Stage is the premier regional professional theatre serving Syracuse and the Greater Central New York community. Syracuse Stage, a professional theatre in residence at Syracuse University, creates innovative, adventurous and entertaining productions, including new plays and bold interpretations of classics and musicals. Founded in 1974, Syracuse Stage produces six to seven productions, one of which is a collaboration with SU Drama. SU Drama also performs five annual shows at this shared venue. The education department produces one touring production for elementary and middle school students, in addition to the student matinee series of mainstage productions.

Syracuse Opera enriches the lives of the people of upstate New York through locally produced opera. Offering three main stage productions each season and year-round community performances and education programs, Syracuse Opera reaches over 60,000 people each year.

Syracuse Jazzfest is the Northeast’s largest free jazz festival, attracting up to 80,000 music fans each year. This year’s Festival, the 33rd annual, will be held on the grounds of the community college. Jazzfest features nationally and internationally known jazz artists.

NBT Stadium is home of the Syracuse Chiefs - the Triple-A affiliate of the Washington Nationals since the 2009 season. The Stadium, which opened in 1997, was designed by HOK - the architects of Camden Yards in Baltimore and the new Yankee Stadium in New York. NBT Stadium, which seats 11,300, was designed to serve as a multi-purpose facility for a variety of area sporting and entertainment events.

The Syracuse Crunch brought professional hockey back to Onondaga County in 1994 in the 6,099-seat Onondaga County War Memorial. The Crunch is the American Hockey League affiliate of the Tampa Bay Lightning and averaged 5,400 per game. The War Memorial is also the home of the Syracuse Silver Knights of the Major Indoor Soccer League. In its third season, the team attracted nearly 3,000 per game.

Syracuse University sports provide upstate New York with nationally-ranked men and women’s collegiate athletics, featuring 20 intercollegiate teams. The 49,262-seat Carrier Dome, America’s only on-campus domed stadium, is the home of Syracuse University football, basketball and lacrosse. Its

A-20 men’s and women’s athletic programs are consistently ranked among the top 20 teams in the country and boast recent national championship teams. In 2009, for the first time in the history of the program, nine teams were featured in their sport’s national ranking. In addition to Syracuse University sports, the Carrier Dome is the venue for Central New York’s major concert events. The dome hosted the NCAA Men’s Basketball Regional Championships five times since 1997 and again in 2015. The University also hosts lectures by leading business, political, literary and media dignitaries.

Onondaga County Parks provides over 3 million annual visitors recreational, cultural, educational, and environmental opportunities in a 6,500-acre system. The County Parks system provides the community with a nature center, beaches, forested areas and natural feature parks, a centrally located multi-use park with intensive recreational opportunities, a marina and boat launches, athletic fields and a professional sports stadium, a fish hatchery, dog park, historic facilities and memorial areas, as well as an array of special events and programs which have significant impact upon tourism and quality of life. This is documented by approximately $10 million in economic impact generated by activities (2013 estimate of the Syracuse Convention & Visitors Bureau).

The County-owned Rosamond Gifford Zoo at Burnet Park is celebrated its 100th year in 2014 and has unveiled many new and unusual permanent exhibits in recent years: 2005 -Penguin Coast showcasing the Zoo’s colony of Humboldt penguins; 2010 – Primate Park; 2011 - Asian Elephant Preserve offering a new home for the internationally recognized elephant breeding program; 2013 - Pacific octopus aquarium. The Zoo boasts over 700 animals.

Onondaga Lake Park was named “one of America’s top ten national heritage parks” after renovations added Wegmans boundless playground, the region’s premier skatepark, the Griffin Visitor Center, and various sports courts. Marina renovations were completed in 2010 and enhancements to the Wegmans Landing section of the park were completed in 2011. With the May 2014 opening of the 2.5 mile west-side trail extension, there are now ten miles of waterfront trails in this upstate New York’s most-visited leisure facility.

Onondaga County’s lakes have become destinations in the world of fishing, as evidenced by the national acclaim generated by major BASSMaster, Fishing League Worldwide and CARP Tournament Series events at Oneida Shores and Onondaga Lake since 2007. In 2015, Jamesville Beach is hosting its sixth Ironman event and Oneida Shores, its seventh Iron Girl triathlon. The fifth annual Empire State Marathon was held in October 2015.

Conventions and Tourism

Onondaga County has recognized the economic importance of conventions and tourism as a net wealth generator for the community. The County was the driving force behind the development of the Oncenter Complex, an integrated convention center complex consisting of three venues. Centrally located in downtown Syracuse, it attracts both regional and national events that contribute to the economic and cultural development the Onondaga County. The Nicholas J. Pirro Convention Center is available for major conventions, meetings, banquets, consumer and trade shows. The space includes a multi-purpose exhibit hall with 65,000 square feet, the 15,000 square feet grand ballroom and ten meeting rooms and atrium space. There is an enclosed walkway that attaches to a 1,000-space parking garage. The Center has undergone a green-roofing project that was completed in 2011 and just completed its meeting room renovations to upgrade the sound, lighting and technology systems.

The War Memorial has the versatility to accommodate numerous large-scale events, including ice shows, family shows, car shows, concerts, sports events and conventions. It offers over 91,000 square feet on three levels and can accommodate over 7,000 guests in the arena. Telescopic seating was recently installed in the arena along with a state-of-the-art digital scoreboard. The John H. Mulroy Civic Center is

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The Oncenter is an award winning facility that has continually been recognized for its outstanding level of customer service, flexibility of function space, quality of food and the hospitality of its staff. Managed by the international venue management company SMG, The Oncenter is advantageously positioned to offer clients creative and flexible options for their groups.

The versatility of the Oncenter has led to the annual attraction of over a half million visitors and thousands of room nights to Onondaga County. In 2014 there were over 600,000 visitors that attended a wide variety of events, including numerous theater, concert, sporting, tradeshow and catered events. The 2018 U.S. Bowling Congress open tournament was awarded to Syracuse and is expected to generate $70 million during its time at The Oncenter.

The Empire Expo Center is the home of the Great New York State Fair, which attracts nearly 1,000,000 people from across the Northeast during its 12-day run each August. The Fairgrounds attract an additional one million visitors to a wide variety of non-Fair events throughout the year. With more than 100 structures, 21 major buildings and parking for 23,000 cars, the Empire Expo Center hosts many events and the annual economic impact of these events to Central New York is an estimated $200 million over several years. In 2015, it again hosted the 44th annual Super Dirt Week and the 17th annual Syracuse Nationals Auto Show.

Population Trends

Year Onondaga County New York State United States 1990 468,973 17,990,455 249,632,692 2000 458,336 18,976,457 281,421,906 2010 467,026 19,378,102 308,745,538 2013 468,387 19,651,127 317,135,349 2014 (Estimated) 468,196 19,746,227 318,857,056

Source: U.S. Census Bureau.

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Major Employers

Listed below are the major industrial and service-related employers in Onondaga County and the number of employees:

Rank Name Employees 1. Upstate University Health System* 9,000-9,500 2. Syracuse University 4,500-5,000 3. St. Joseph's Hospital Health Center 4,000-4,500 4. Roman Catholic Diocese of Syracuse 3,500-4,000 5. Wegmans Food Stores 3,500-4,000 6. Crouse Hospital 2,500-3,000 7. Loretto Adult Care Facilities 2,000-2,500 8. National Grid 2,000-2,500 9. Time Warner Cable 1,500-2,000 10. Lockheed Martin MS2 1,500-2,000 11. Syracuse V.A. Medical Center 1,500-2,000 12. Excellus Blue Cross Blue Shield of CNY 1,000-1,500 13. Carrier Corporation 1,000-1,500 14. Welch Allyn, Inc. 1,000-1,500 15. Byrne Dairy 1,000-1,500 16. United Parcel Service 1,000-1,500 17. Verizon 1,000-1,500 18. Syracuse Research Corp (SRC) 1,000-1,500 19. AXA Equitable Life Insurance Co. 500-1,000 20. L.& J.G. Stickley, Audi & Co. 500-1,000 21. The Bank of New York Mellon Corp. 500-1,000

* In 2011, Upstate merged with Community General Hospital, formerly the 15th largest employer. Source: Syracuse Chamber of Commerce, January 2014.

Commercial Banking

There are twelve major commercial banks with more than 123 branches within the County. The four savings institutions have an additional 9 branches. Offices of the following commercial and savings banks are within the County:

Commercial Banks Savings Institutions Adirondack Bank M & T Bank Berkshire Bank Bank of America, N.A. NBT Bank, N.A. Fulton Savings Bank Community Bank, N.A. Pathfinder Bank Geddes Federal Savings & Loan Assn First Niagara Bank RBS Citizens Bank, N.A. Seneca Federal Savings & Loan Assn JP Morgan Chase Bank, N.A. Solvay Bank Key Bank, N.A. The Lyons National Bank Source: http://www2.fdic.gov/idasp/main.asp, March 2015.

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Unemployment Rate Statistics

Annual Average Unemployment Rates (%) 2015 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD(1) Onondaga County 4.5 4.4 3.8 3.9 5.6 7.7 7.9 7.5 6.9 6.0 5.0 5.2 New York State 5.1 5.1 4.1 4.4 5.9 8.5 8.4 8.2 7.7 7.0 5.7 5.5 United States 5.5 5.1 4.6 4.6 5.8 9.3 9.6 8.9 8.1 7.4 6.2 5.4 (1) Year-to-date (YTD) data are the months of January through September for each noted year. Source: New York State Department of Labor and the U.S. Bureau of Labor Statistics.

2015 Monthly Unemployment Rates (%) Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Onondaga County 5.9 5.6 5.1 4.9 5.0 5.0 5.2 4.7 4.8 N/A N/A New York State 6.5 6.4 5.8 5.5 5.3 5.2 5.4 5.0 4.8 N/A N/A United States 5.7 5.5 5.5 5.4 5.5 5.3 5.3 5.1 5.1 N/A N/A Source: New York State Department of Labor and the U.S. Bureau of Labor Statistics.

Labor Force Statistics in Onondaga County

Persons in the labor force and persons employed (annual average) in Onondaga County for 2001 through 2015 YTD (1) are as follows (in thousands):

YEAR Labor Force Employment 2001 230.9 221.5 2002 231.7 220.3 2003 231.0 219.2 2004 232.2 220.4 2005 233.9 223.3 2006 233.7 223.5 2007 232.7 223.1 2008 234.7 222.6 2009 232.9 214.9 2010 231.0 212.2 2011 228.1 210.4 2012 228.0 209.8 2013 226.1 210.2 2014 224.7 212.2 2015 YTD1 223.9 212.4 (1) Year-to-date (YTD) data are the months of January through September for each noted year. October and November 2015 information is not available as of the date of this preliminary Official Statement. Source: New York State Department of Labor, Local Area Unemployment Statistics Program (LAUS).

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Labor Market Statistics

The following tables present the distribution of employment in Onondaga County and employment trends for 2000, 2012, 2013, 2014 (1) and 2015 (2).

Trend of Total Employment Total Employment and Employment as a % of Total Employment 2000, 2012, 2013, 2014 (1) and 2015 (2) % of % of % of % of Industry 2000 Total 2012 Total 2013 Total 2014 (1) Total 2015 (2) Agriculture, Forestry, Fishing Hunting 578 0.23% 583 0.24% 632 0.26% 709 0.30% 579 Mining 126 0.05% 122 0.05% 88 0.04% 131 0.05% 123 Utilities N/A N/A 1,558 0.65% N/A N/A N/A N/A N/A Construction 10,272 4.12% 9,751 4.06% 9759 4.08% 9,494 3.97% 8,002 Manufacturing 35,126 14.08% 19,001 7.91% 18,507 7.74% 18,336 7.67% 18,268 Wholesale Trade 14,277 5.72% 13,265 5.52% 13,147 5.50% 12,613 5.28% 12,562 Retail Trade 29,852 11.97% 28,070 11.69% 28,264 11.83% 28,498 11.92% 28,220 Transportation and Warehousing 8,049 3.23% 8,243 3.43% 8,291 3.47% 8,621 3.61% 8,553 Information 7,044 2.82% 4,171 1.74% 4,130 1.73% 4,022 1.68% 3,784 Finance and Insurance 12,474 5.00% 11,379 4.74% 10,855 4.54% 10,582 4.43% 10,521 Real Estate and Rental Leasing 3,331 1.34% 3,289 1.37% 3,207 1.34% 3,140 1.31% 3,109 Professional, Scientific and Technical Services 11,033 4.42% 14,495 6.03% 14,303 5.98% 14,365 6.01% 14,162 Management of Companies and Enterprises 3,841 1.54% 2,453 1.02% 2,592 1.08% 2,688 1.12% 2,775 Administrative and Waste Services 11,959 4.79% 12,018 5.00% 12,313 5.15% 12,600 5.27% 11,556 Educational Services 8,213 3.29% 9,009 3.75% 9,271 3.88% 9,178 3.84% 10,080 Health Care and Social Assistance 26,253 10.52% 32,895 13.70% 33,334 13.95% 33,767 14.13% 33,812 Arts, Entertainment, and Recreation 2,645 1.06% 3,346 1.39% 3,338 1.40% 3,367 1.41% 3,229 Accommodation and Food Services 16,080 6.45% 18,214 7.58% 18,849 7.89% 19,266 8.06% 18,937 Other Services 9,412 3.77% 8,149 3.39% 8,243 3.45% 8,431 3.53% 8,286 Total, All Government 38,819 15.56% 40,004 16.65% 39,696 16.61% 38,848 16.26% 39,992 Unclassified 86 0.03% 178 0.07% 169 0.07% 334 0.14% 348

Total, All Industries 249,470 100.00% 240,193 100.00% 238,988 100.00% 238,990 100.00% 236,898

(1) 2014 Annual figures are preliminary and subject to change. (1) Represents the 1st quarter figures for 2015. 2015 figures for the 2nd, 3rd, and 4th quarters, 2015 Annual figures and the 2015 Percent of Total are not available as of the date of this Official Statement. Notes: Column totals may not foot due to rounding. 2014 Annual figures and 2015 1st quarterly figures are preliminary and subject to change. Source: New York State Department of Labor, Quarterly Census of Employment and Wages Survey (QCEW).

Economic Development

A centerpiece of Governor Cuomo's strategy to jumpstart the economy and create jobs, Regional Councils were put in place in 2011 to redesign the State's approach to economic development from a top- down model to a community-based, performance-driven approach. The initiative empowers community, business, and academic leaders, as well as members of the public in each region of the State, to develop strategic plans specifically tailored to their region's unique strengths and resources in order to create jobs and support economic growth.

In 2011, the Central New York Regional Economic Development Council's (REDC) plan was chosen as a “Best Plan” and was granted $103.7 million in Economic Development money from New York State. Among the Onondaga County projects for which funding was approved include: Syracuse Inner Harbor Redevelopment - $3 million; Central New York Biotechnology Research Center and Site

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Development - $5.5 million; Clay Industrial Park - $6.7 million (includes $1.6 in grants); housing improvement projects - $45 million.

In 2012, the CNY region was honored with the “Top Performer” award, recognizing the region’s efforts to keep the funded projects on schedule. Again, the region was awarded with significant NYS funds totaling $93.8 million to fund 73 projects, including $3.1 million for the expansion of the Syracuse Community Health Center, $2.5 million for the Sibley’s Building renovation in downtown Syracuse, $1.5 million for the Inner Harbor redevelopment and $1.0 million for infrastructure improvements in the Loguen’s Crossing vicinity.

Another successful award in 2013 brought $66.9 million for 79 area projects, including 43 in Onondaga County for manufacturing expansions, downtown development and the Inner Harbor project.

In 2014, the CNY’s plan was again a “Top Performer” in the Regional Council process and it is anticipated that the 85 projects will bring in $80.2 million in New York State funds to projects including the renovation and reopening of the Hotel Syracuse and facility expansion for Corso’s Cookies.

Collaboration is the key to economic development in the CNY region. The Syracuse Chamber of Commerce and the Metropolitan Development Corporation combined in May 2010 to form the CenterState Corporation for Economic Opportunity (CEO). Representing not only Onondaga County, the CEO’s 12-county region is home to 1.5 million people and over 130,000 college students. The 35 college campuses make it the third highest concentration of colleges and universities in the nation and bring in more than $2 billion in research and development annually. The region is an international leader in green and clean technology, sensor systems and nanotechnology.

The County’s Department of Economic Development and the City of Syracuse’s Department of Neighborhood and Business Development have co-located and are collaborating, combining their resources to insure a focused effort to recruit and retain development within the County.

CenterState CEO serves as the region's primary economic, community and business development catalyst and works to achieve regional growth and total community prosperity through partnerships, planning and problem solving. Their Creative Core Emerging Business Competition has awarded over $1 million to companies poised for growth. Ongoing work with the Brookings Institution and community partners continues to build on the success of these initiatives:

The Metro Export Initiative has three core strategies:

Increase export activity of top exporters

Assist the small and medium companies that have the products to export, but lack the expertise or personnel to pursue these opportunities

Expand exports of the key service providers in Education, Healthcare and Medical Services and Tourism

Agenda for Economic Opportunity, also in collaboration with the Brookings Institute, identified three critical fronts:

Establish the “Data to Decisions” Innovation Alliance – connecting technology companies, both existing and emerging ventures

Create a Regional Seed and Venture Fund – for entrepreneurial endeavors to secure capital

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Establish a Government Modernization Commission – to improve the delivery of services and increase cost effectiveness.

Syracuse and Onondaga County continue to be known nationally for green initiatives. In 2013, the U.S. Water Alliance announced the three winners of the U.S. Water Prize, including Onondaga County, for its program to “Save the Rain” and embrace green infrastructure solutions to wet weather problems. The Zoo’s storm water management system was recognized by Storm Water Solutions Magazine as a 2013 Top Project of the Year. County Executive Joanne Mahoney was recognized as the 2011 Public Official of the Year by Governing Magazine for her leadership. Onondaga County’s “Save the Rain” program has been identified by the United States Environmental Protection Agency (EPA) as a model green infrastructure community. Syracuse and Onondaga County are one of only ten communities to receive this special designation. Over $25 million has been spent locally on “Save the Rain” projects including porous pavement, green roofs, rain gardens, infiltration trenches and beds, and green streets. This initiative has been extended into the County’s towns and villages. The County Legislature passed a $3 million financing resolution in May 2012 authorizing the program and dedicated another $2 million of financing therefor in 2013.

One of the most successful sustainable initiatives, the Clean Tech Center, develops renewable and clean energy technology companies in New York State. A program of The Tech Garden – a 35,000 square-feet technology incubator, it is funded by NYSERDA to develop emerging businesses and commercializing technologies in renewable energy, alternative fuels, system integration and smart grid technologies, transportation and buildings and construction technologies.

Governor Cuomo and Onondaga County Executive Mahoney have proposed a $100 million State and County investment on the western side on Onondaga Lake. The Onondaga Lake Revitalization Project includes $30 million approved as part of the State’s 2014-15 budget. The County has pledged an annual investment of $2.5 million, new money expected to be received by the County as part of the State’s expansion in casino gaming. A new amphitheater, new housing, improved streetscapes in Solvay, and brownfield cleanup are all a part of this proposal.

In August 2015, the Lakeview Amphitheater was completed and celebrated its grand opening Labor Day weekend with a concert. The County issued $79.9 million serial bonds that closed on May 28, 2015, out of which, $49.5 million was allocated to the amphitheater project.

The $23 million Central New York Biotech Accelerator, an incubator providing the environment to accelerate biological and medical products to market, has opened its doors. This 40,000 square foot facility is a joint venture of SUNY ESF and Upstate Medical University (“Upstate”). Part of a multi-year, $510 million capital plan advanced by Upstate, the plan also includes development of a 10-acre new Western Campus, labeled Loguen’s Crossing, consisting of major retail, residential, clinical, and research facilities located within the traditional boundaries of downtown Syracuse. Upstate continues to invest in its on-campus facilities. The new Golisano Children’s Hospital, the centerpiece of a $140 million expansion of its University Hospital, opened in September 2009. A new cancer center opened in 2014. The $74.5 million 90,000 square foot facility consolidates all the patient cancer services. The $72 million expansion of the Institute for Human Performance opened in 2013 and nearly doubled the size of this research center for brain, spinal and nervous system diseases. A $36 million new academic building is in the design phase. In 2011, Upstate purchased Community Hospital’s assets, enabling it to expand enrollment in its schools, provide more training sites for students and preserve services at Community.

Local hospitals in the Syracuse area employ over 17,500 and the major hospitals are continually making capital investments. A $90 million six-floor addition at the Veterans Medical Center opened in 2013, creating a new spinal cord injury/disease center and adding 70 new positions. Crouse Hospital is enlarging its surgical rooms to house new technology equipment and is updating its operating room

A-27 suites. Projects total $50 million and Phase I, the Witting surgical center, opened in 2011. In the Prospect Hill neighborhood surrounding St. Joseph Hospital, work has been completed to construct affordable housing for employees. St. Joseph’s Hospital Health Center $80 million new Emergency Room opened in February 2012, part of $265 million in hospital expansion plans. Currently underway is the six-story expansion that will house 110 private rooms, operating rooms and intensive care units. Up to 600 construction jobs and 200 new full-time health care positions are materializing due to these new facilities.

Syracuse University has been a major driver of the construction industry throughout the past decade. Total completed or undergoing building has exceeded $500 million since 2004. Major buildings for its Management, Newhouse and Life Sciences schools were constructed, as well as dormitories and privately-funded student apartments. Construction is complete for a new $95 million Law School building, which opened in fall 2014, along with an $18 million renovation of Newhouse II. Adjoining the SU campus, SUNY ESF’s $28.3 million Gateway Building, $31.4 million Centennial Hall on its main academic quad and its first dormitories adjoining the campus opened in 2011-12. A new $86 million, 120,000 square foot academic building is being planned with a 2015 phase I target date.

The University Hill area, which is home to Syracuse University, SUNY ESF, Upstate Medical University, and a concentration of the region’s health care and hospital facilities, is separated from the traditional downtown only by an elevated section of Interstate 81. New York State has committed $20 million in State support to assist with the “Connective Corridor” ($42.5 million total project) to better link these two major economic centers. In December 2011, it was awarded $10 million in Federal DOT funding. Through lighting, landscaping, signage, and streetscape improvements, the connective corridor is intended to eliminate real and perceived barriers between the two areas, resulting in an improved environment for commercial, residential, and cultural development in downtown Syracuse. The path of the Connective Corridor also serves as a link between the major arts and cultural centers and tourism destinations within downtown.

All of this development is occurring at a time of transition in downtown Syracuse, as older – often empty - buildings are being converted to market rate rental and owner-occupied housing. There are currently 1,600 completed downtown housing units, with another 460 planned or underway. Recent housing projects included renovating two towers at $32 million for 400 Upstate Medical students and employees, Merchant Commons, Dey’s Plaza and Pike Block, which renovated former office and retail space for downtown residential units, as well as retail and dining and office space. Occupancy rates are at 99%. In historic Armory Square, there is much activity. In summer 2009, Jefferson Clinton Commons, a $20 million mixed use commercial and residential building opened, the first new construction, private- sector downtown building since 1992. The Washington Station Building opened in fall 2010. O’Brien and Gere Engineering, a large environmental engineering firm based in suburban Onondaga County, anchors this 200,000 square foot mixed-use building. In August 2010, Urban Outfitters opened in a reconverted building. A $30 million, 180-room Marriott hotel opened in July 2013. The $16 million renovation of the historic Landmark Theatre was completed in 2011 and local parking garages have had attractive facelifts. A $6 million renovation of an older office building has provided Class A office space, known as Onondaga Tower.

Adjacent to Armory Square, the near Westside initiative is moving forward to revitalize this inner-city neighborhood. In 2013 WCNY radio and TV operations moved into its new $20 million headquarters in a renovated state-of-the-art warehouse, while another 51,000 square foot warehouse now houses the LEED Platinum certified offices of local architect firm King and King.

In the Lakefront Development area, immediately north of downtown Syracuse, the expansion of the Carousel Center has transformed the Center into Destiny USA—a retail themed destination that is also pioneering new, environmentally-friendly construction techniques and building systems. Travel and

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Leisure magazine has written that Destiny USA, pulling in 29 million visits a year, will be the second most-visited shopping and entertainment complex in America. At 2.4 million square feet, it is the nation’s sixth-largest shopping venue and the largest in New York State. The revitalization of the nearby Inner Harbor was awarded to COR Development Company, a local Syracuse company, which has completed site work and begun construction of a $350 million transformation including a hotel, apartments and retail.

Several of the area’s largest high tech and knowledge-based industries are reporting significant growth, as described below.

Lockheed Martin Naval Electronics and Surveillance Systems-Radar Systems, a unit of Lockheed Martin Corporation, is a leader in the design, development and integration of radar systems, vessel traffic management, simulation and training systems, and other complex electronic systems. The firm employs 1,600 people at its Syracuse headquarters. The company continues to win defense contracts for radar units and mine neutralization devices, including a $180 million Department of Defense contract, about half of which will be handled at the Salina plant.

Anaren, Inc designs, develops, manufactures and sells high-frequency electronic technology, for the wireless communications, satellite communications and consumer and defense electronics markets and employs nearly 600 people in the County. Anaren was acquired by Veritas Capital, a private equity investment firm in 2014 and boasts new orders of $8.3 million from Raytheon supporting the US Navy defense that could extend to $110 million over ten years.

Sensis Corporation was acquired by Saab AB in 2011 to form Saab Sensis Corp. It provides defense radar tools and air traffic management systems for civilian airports. The company employs 400 people in the Town of DeWitt, the site of its 80,000 square-foot headquarters building. The company’s newest system is a de-icing manager that has brought significant revenues. Over 60 of the world’s 100 largest airports use Sensis technology and Saab has designated Sensis to be its world headquarters for air traffic management business.

SRC, Inc., formerly Syracuse Research Corporation, is a not-for-profit research and development company with more than 55 years of experience in defense, environment and intelligence. Its radio- controlled improvised explosive device electronic warfare (CREW) system was recognized as a Top 10 Army Greatest Invention. SRC currently employs 600 people at its Cicero headquarters. Due to its success in creating a lightweight counter-mortar radar system for the U.S. Army, its growth in manufacturing led to a for-profit SRCTec subsidiary, which provides manufacturing and lifecycle support for complex electronics systems and employs an additional 230 people in its North Syracuse location. SRC continues to receive critical contract awards including a five year, $20 million contract from the EPA to evaluate the manufacture, use and environmental consequences of new chemical substances entering the U.S. marketplace and a 2014 $7.2 million order from the US Army.

Welch Allyn, an internationally known manufacturer of medical and dental diagnostic instruments continues to serve as an industry leader and major force in the area’s economy. The firm employs over 1,100 locally and 2,500 worldwide. The company completed a $35 million, 175,000 square foot expansion and renovation to its headquarters. The Gold-LEED certified building represents a 55 percent increase in building space, yet there has only been an 8 percent increase in energy consumption and water consumption has decreased by 25 percent.

While the role and products have changed over the years, employees at the Bristol-Myers Squibb facility in East Syracuse have the same mission as they have had since 1943: to develop and deliver innovative medicines to help people prevail over serious diseases. 600 employees at this biotech campus are responsible for developing and manufacturing the latest biologic medicines.

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Carrier Corporation has invested $25 million in redeveloping its Dewitt campus and continues its position as the company’s largest research and development center. The Dewitt site develops refrigeration systems for shipping containers and trucks cooling systems for store display cases and air conditioning, as well as software.

Anheuser Busch continues to invest in its Lysander facility, totaling $304 million in the last ten years including a 24 ounce can line, which increased production by 30% in 2013. The firm employs 430 full-time workers at its plant northwest of Syracuse and expects to continue its operations at full capacity. The company is a wholly-owned subsidiary of Anheuser-Busch InBev, the leading global brewer, and continues to operate under the Anheuser-Busch name and logo. It recently negotiated an agreement that would reduce the brewery’s property taxes over 15 years in exchange for the company’s pledge not to close the brewery during that time.

Tessy Plastics Corp, a plastics-parts maker in Elbridge, New York, with annual sales of $206 million now employs 763, with an additional 100 contract employees. It just announced its seventh expansion since 2001, a 50,000 square foot $8 million clean manufacturing facility near Skaneateles. Tessy was recognized with the 2012 Manufacturing Leadership 100 Award in the Innovative Enterprise category.

A squadron of unmanned aircraft (drones) is now based at the Air National Guard base in Mattydale, further securing the future of the base and retaining its 1,200 jobs. $5.4 million was spent to modernize and expand the buildings. Hancock field is the national headquarters for training Reaper maintenance personnel from all service branches.

A $63 million security and expansion at Syracuse Hancock International Airport opened in May 2013. The center portion of the airport has been completely rebuilt and the addition of 147,000 square feet has enabled the combination of the two security screening areas into one central checkpoint. The expansion has been paid for by facility charges, charged to each ticket for enplaned passengers. The project added 250 construction jobs, along with another 90 jobs to construct a $6 million airport facility for Syracuse Jet Association. The Syracuse Regional Airport Authority officially took over airport operations in 2014 with the goal of more efficient operations and attracting new airlines.

Regionally, the County continues to participate in the 12-county Central Upstate Regional Alliance, which is a partnership of public, academic and non-profit organizations convened by the CenterState CEO. The partners work collaboratively to address common challenges and advance unique opportunities for the benefit of the entire region.

The Onondaga County Office of Economic Development works closely with the many other organizations in the area whose goals are to make doing business in the region easier. In addition to CenterState CEO and the City of Syracuse, the County takes advantage of the following partners:

Empire State Development and its New York State Excelsior Jobs Program – provides capital grants and tax credits for up to ten years, including job tax, R&D tax, real property tax credits. National Grid, the local utility offers utility discounts to NYS Excelsior designated companies. NYSERDA, a state authority which encourages energy alternatives, offers a wide array of utility incentives for residential, business and institutional facilities.

Central New York Regional Planning Board provides planning services to spur business investment in the five County CNY-regions.

Central New York Technology Development Organization works with technology and manufacturing companies to improve an existing company's processes, productivity and competitiveness or to transition a startup company to a successful business.

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Manufacturers' Association of Central New York provides members with the tools, information, and resources they need to compete.

Empire State Development offers a wide variety of financial incentives to qualified business attraction and retention projects that create wealth within New York State.

Greater Syracuse Business Development Center offers a variety of financing packages for small to medium-sized businesses located in Central New York.

In an effort to train and prepare the local workforce, the New York State Small Business Development Center at OCC, Onondaga-Cortland-Madison BOCES and CNY Works and Workforce Investment Board provides small business assistance, customized training especially in mechanical, engineering, computer and customer service skills and job placement, respectively.

The County has made maximum use of available economic development tools. The Onondaga Civic Development Corporation (OCDC), a not-for profit local development Corporation, was established in October 2009. The corporation, which can provide tax-exempt financing for not-for-profit corporations, was formed with the purpose of encouraging the development or retention of industries that provide employment and job related training opportunities in the community. During 2014, the OCDC issued bonds for the renovation and expansion of St. Joseph’s Hospital Health Center and to fund the building of a YMCA fitness and health center in the Town of Lysander. Student housing at SUNY ESF and building renovations at LeMoyne College have also been funded with OCDC debt.

The Onondaga County Industrial Development Agency (OCIDA), a public benefit corporation created in 1970, uses its statutory powers to work with local businesses to build or expand their businesses in Onondaga County. During 2014 OCIDA worked with several local industry leaders including INFICON and Tessy Plastics on significant expansion projects of their existing facilities. Local business expansions are anticipated to provide the bulk of the IDA’s projects in 2015.

The County is equally proactive in preparing sites for major developments. Through the OCIDA, the County acquired 333 acres at the White Pines Commerce Park in Clay - a large-scale, industrial development site. This site is marketed as a part of a statewide effort to attract large manufacturing and distribution firms. The site lends itself to a variety of other large-scale industrial developments seeking large, properly zoned, permitted sites with supporting infrastructure in place. Another shovel-ready site is the Hancock Airpark, a 425-acre County-owned property that was recently transferred to OCDC. To date, the efforts at Hancock have led to 50 acres being returned to the tax rolls and 750 jobs brought to the Airpark.

Budgeting

Budgetary Procedures

The County Executive submits an operating budget each year, which, after the public hearing, is adopted by the County Legislature. Expenditures during the fiscal year may only be made pursuant to appropriations from the General Fund and other special purpose funds established by the County. However, during the fiscal year, the County Legislature, on the recommendation of the County Executive, may, by resolution, make additional appropriations from any unencumbered balances in appropriations, contingency funds or unanticipated revenues, and to a limited extent by the issuance of budget notes.

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Budget Monitoring and Fiscal Controls

Budget analysts regularly meet with fiscal officers in line departments to collect data on expenditures, revenues, and caseload trends and to discuss potential budgetary issues in upcoming months. The indicators in the database are updated at least monthly based on both the information submitted and discussions at these meetings. The data that has been collected is used to produce a number of reports projecting short and long-term budget performance. These reports include:

Appropriation/Revenue Forecasts. Monthly reports on key expenditure and revenue accounts are produced and these reports are the most important component of budget monitoring activities. The County’s Budget Office staff meets monthly to review the status of all of the major revenue and expense items, and trends in the national and local economy that may impact County finances.

Quarterly Reports. Quarterly reports on the status and forecast of key expenditure and revenue accounts, along with a profile of area economic conditions, are developed collaboratively by the County’s Budget Office and departmental fiscal officers and are presented to the County Executive and County Legislature. The report is intended to provide decision-makers with the best available information regarding the condition of County finances. This information is the basis for fiscal and programmatic policy decisions during the course of the year, and establishes the financial foundation for the development of the County’s annual operating budget in the early fall.

Three-Year Budget Projection. This document is intended to be an early warning system for budget officials. It is driven from the database of key indicators. This document is designed to permit officials to formulate plans to address major budget issues confronting the County on a timely basis.

Ensuing Year Departmental Budgets. These forecasts are used to project incremental growth of departmental budget accounts during the budget request process.

The County’s Budget Process

Onondaga County has established an in-depth annual budget process, which is an important component of the County’s overall commitment to disciplined financial management. In early June, the County’s Budget Office receives requests for the upcoming fiscal (calendar) year from departments and spends the summer developing and refining revenue and expenditure estimates based on these requests. On or about September 15, the County Executive presents the executive budget to the County Legislature. The Legislature’s Ways and Means Committee then undertakes a two to three week review process dominated by budget hearings in which each department presents and explains the executive budget. This review of departmental budget requests by the Legislature is designed to result in financial accountability and attentiveness by every County department, and a legislative body familiar with the details of County finances and programs.

County Budget

The County implemented a consolidated ERP system – PeopleSoft – during 2012. This $11 million program upgraded and consolidated decades-old legacy systems in financial reporting, budgeting and purchasing. Human Resources will be live in 2015. The County started using this new software to develop its budgets in the 2013 budget, and at the same time began the process of restructuring how it budgets and funds its operations and programs. All the annual budgets, beginning from 2013 were crafted based on functional program areas within each department. Departments are required to build program budgets by specifically identifying expenditures and revenues by each functional area. In 2013 and 2014, the County evaluated each department’s programs in order to determine their relevancy and potential value in measuring the effectiveness of the services they provide. The County has also made the necessary adjustments to assure that all financial activity is recorded by

A-32 program appropriately and accurately. With those initial tasks near completion, the County is focusing its attention on the performance of these functional programs. Performance measures will help us to better define the benefit created by the services being provided in a tangible way by quantifying outcomes. Rather than merely identifying a program’s cost to the County, the focus will emphasize the value the program creates through its services and how the program aligns with the overall strategic goals and priorities of the County.

The County Executive presented the 2016 budget in September 2015. As the budget was developed, rising salary and benefit costs, mandate increases, and revenue losses were significant contributors to the projected budget gap of $18 million. To overcome this gap, the County Executive held headcount to a minimal increase, as well as all other discretionary spending. Sales and property tax growth in collections were factored into the budget gap reconciliation as well as the use of $4 million in fund balance and $1 million in fund balance committed for debt service relief.

The County Legislature adopted the 2016 Budget on October 13, 2015. The Legislature made additional appropriations cuts and increased revenue assumptions to reduce the property tax levy by $200,000. The property tax levy has been reduced by the Legislature by a total of $44 million over the last five years. The 2016 all funds budget supports $1.2 billion in total expenditures, including internal transfers of $240 million. Expenses were .4% below the 2015 budget as modified. The General Fund budget included an adopted property tax levy of $139,691,159, a $200,000 reduction vs. 2015. After accounting for budgeted and subsequent fund balance appropriations of $19 million, the current unassigned fund balance is $74 million or 11% of adjusted General Fund revenues. Recognizing debt service spikes in upcoming years, the County Executive committed $5 million in fund balance in the 2014 budget to offset these increases. This debt service stabilization approach will continue to be utilized to reduce the impact on future operating budgets while using excess fund balance strategically.

In 2006, the State Comptroller required that County sales tax revenue allocated to municipal governments and school districts within the County must be budgeted as a revenue and expense. Formerly, the allocation of the non-County share of the sales tax was an off-budget transaction in most of New York State’s counties. Since this accounting change artificially inflates General Fund revenues, the goal was restated to subtract this amount, which is estimated at $88.3 million for 2015.

Investment Policy

Pursuant to Article IV of the Onondaga County Charter, the Chief Fiscal Officer is the custodian of all County funds and is charged with the responsibility for creating and administering an investment policy, which is consistent with the Investment Policies and Procedures guidelines promulgated by the State Comptroller.

Pursuant to the Chief Fiscal Officer’s investment policy, investments of monies not required for immediate expenditure may be made in certain obligations authorized by Section 11 of the General Municipal Law of the State: (a) Special time deposit accounts; (b) Certificates of deposit; (c) Obligations of the United States of America or obligations guaranteed by agencies of the United States of America where the payment of principal and interest are guaranteed by the United States of America; (d) Obligations of the State of New York; and (e) Subject to approval of the State Comptroller, tax or revenue anticipation notes of any municipality, school district or district corporation of the State, other than Onondaga County.

The Chief Fiscal Officer’s investment policy further provides that, in accordance with the provisions of Section 10 of the General Municipal Law of the State, all deposits, including certificates of deposit and special time deposits, in excess of the amount insured under the provisions of the Federal Deposit Insurance Act shall be secured by a pledge of “eligible securities” with an aggregate “market

A-33 value” equal to the aggregate amount of such deposits. Eligible securities used for collateralizing deposits shall be held by a third party bank or trust company subject to security and custodial agreements.

The Chief Fiscal Officer’s investment policy also authorizes the County to enter into repurchase agreements, subject to the following restrictions: (a) all repurchase agreements must be entered into subject to a master repurchase agreement; (b) obligations shall be limited to obligations of the United States of America and obligations of agencies of the United States of America; and (c) the custodian shall be a party other than the trading partner.

As of February 23, 2015, the County’s portfolio consists of money market deposits, certificates of deposit, and U.S. government agency bonds, which range in maturity from one day to five years. The Chief Fiscal Officer’s investment policy does not permit the County to invest in derivatives or reverse repurchase agreements and the County has never invested in derivatives or reverse repurchase agreements.

Pensions and Other Post-Employment Benefits

The County’s contributions to the employee retirement systems (“ERS”) for the years 2010 through 2015 are as follows (includes Onondaga Community College):

Amount Percentage of Year Contributed to ERS Pension Eligible Salaries

2010 $24,622,685 11.75% 2011(1) 42,155,931 21.40 2012 42,788,760 19.92 2013 44,459,788 20.59 2014 38,937,131(2) 18.80 2015(Estimate) 38,817,507 18.30 2015(Actual) 33,214,687 17.33 2015(Projected) 32,084,030 16.00

(1) Includes a payment of $11,933,848 for the 2010 Early Retirement Incentive (ERI) costs. The County appropriated excess 2010 fund balances to make a lump sum payment in 2011 to pay off this entire liability on December 15, 2011. The percentage of salaries would have been 15.34% without the ERI costs. (2) The County’s December 2014 pension contribution included a $3M reconciling item of prior year salaries.

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GASB 45 and Other Post-employment Benefits (OPEB)

Based on the most recent actuarial evaluation, the following tables shows the components of the County’s annual OPEB cost, the amount actuarially contributed to the plan, changes in the County’s net OPEB obligation and funding status for the fiscal years ending December 31, 2014 and 2013:

Annual OPEB Cost and Net OPEB Obligation: 2014 2013 Annual required contribution (ARC) $ 58,336,842 $ 81,384,837 Interest on net OPEB obligation 13,113,030 10,765,996 Adjustment to ARC (14,018,964) (11,052,140) Annual OPEB cost (expense) 57,430,908 81,098,693 Expected Contributions made (23,684,639) (25,874,352) Increase in net OPEB obligation 33,746,269 55,224,341 Net OPEB obligation - beginning of year 308,541,892 253,317,551 Net OPEB obligation - end of year $342,288,161 $308,541,892 Percentage of annual OPEB cost contributed 41.2% 31.9% Funding Status: 2014 2013

Actuarial Accrued Liability (AAL) $738,048,524 $973,200,000 Actuarial Value of Assets 0 0 Unfunded Actuarial Accrued Liability (UAAL) $738,048,524 $973,200,000

Funded Ratio (Assets as a Percentage of AAL) 0.0% 0.0%

Percentage of Fiscal Annual Annual OPEB Net OPEB Year Ended OPEB Cost Cost Contributed Obligation 2014 $57,430,908 41.2% $342,288,161 2013 81,098,693 31.9 308,541,892 2012 76,072,461 31.6 253,317,551 2011 68,350,744 32.0 201,312,214

Note: The above tables are not audited.

The County continues to identify ways to reduce its OPEB liability and implements strategies accordingly. The County is currently in the process of addressing the growth of this liability in the following ways: since August 1, 2013 Medicare eligible retirees and dependents are placed in a Medicare Advantage Plan thereby removing them from the County’s self -insured plan and saving an estimated $3.5 million a year. Health benefit plan design changes will be implemented after collective bargaining negotiations on new labor agreements are completed in 2015. The new plan design is expected to save between $2.4 and $2.7 million in annual costs through changes including increased office visit co-pays and increased prescription co-pays for mail order fills. The plan design is subject to ratification by the unions at the time labor agreements are settled. The County is pursuing its goal in collective bargaining negotiations to increase employee contribution ratios for the health benefit plan from the current levels of 10% medical/15% prescription hybrid to a flat 30%. This change would generate approximately $7 million in yearly plan savings.

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Employees

The County provides services through the employment of approximately 3,268 full-time employees, excluding those employed at Onondaga Community College. The County’s 2015 workforce represents no increase in headcount over 2014. The following table sets forth the number of employees in each bargaining unit and the labor organization that represents them. There are 369 Management/Confidential employees not represented by a labor organization. All but two collective bargaining agreements are under negotiation for a successor agreement at this time.

Labor Organization Number of Employees Contract Expiration Civil Service Employees Association (CSEA) 2,322 December 31, 2012 (1) (2) Onondaga County Sheriff’s Police Association (OCSPA) 195 December 31, 2017 Deputy Sheriff’s Benevolent Association (DSBA) 273 December 31, 2012 (1) NYS Nurses Association (NYSNA) 44 December 31, 2013 (1) International Union of Operating Engineers (IUOE) 28 December 31, 2012 (1) Central and Northern New York Building Trades Council (BTC) 30 December 31, 2012 (1) Onondaga Sheriffs Captains Association (OSCA) 7 December 31, 2017

(1) Currently under negotiations. (2) The County has appropriated funds in the 2015 budget for a potential settlement with CSEA.

Data Security

Onondaga County has had systems in place for several years to ensure the continuity of governmental operations and security of critical information in the event of a disaster or major emergency. Data for core governmental systems is backed up daily and disaster tapes are stored offsite weekly per contract with Iron Mountain. Open systems servers and data are backed-up; the backups are stored on site. In the event of a disaster, servers would need to be rebuilt and data would be restored manually from tape backups.

Accounting Practices

The County’s fiscal year is a calendar year, from January l through December 31. The County uses the modified accrual basis of accounting for all funds except the internal service fund. Revenues are recorded when they become susceptible to accrual, meaning they are both measurable and available. Revenues not considered available are recorded as deferred revenues. Expenditures are recorded when a liability is incurred if it is expected to be paid within the next twelve months, except interest on general long-term obligations, which is recorded when due. Liabilities expected to be paid after twelve months are considered long-term. Enterprise and internal service funds use the accrual basis of accounting. Under the accrual basis, accounting transactions are recorded when the underlying economic event takes place without regard for when the cash receipt or cash disbursement takes place.

The financial affairs of the County are subject to periodic audit by the State Comptroller and the County Comptroller conducts an annual audit of the County’s finances. The County has retained independent certified public accountants to audit its financial statements.

Fund Structure

The accounts of the County are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures. The various funds are summarized by type in the financial statements. The following fund types and account groups are used by the County:

General Fund: accounts for all financial resources except those required to be accounted for in another fund. Sources of revenue include: Countywide Real Property Taxes, State and Federal Aid, Sales Tax, User Fees, etc.

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Special Revenue Funds: account for revenues from specific taxes or other earmarked revenue sources, which are required by law or regulation to be accounted for in special funds. Grants, County Road Fund, Road Machinery Fund, Water, Water Environment Protection, Van Duyn, Library, ONCENTER Revenue and Community Development are included in Special Revenue Funds. The only special revenue fund considered a major fund at this time is the Water Environment Protection Fund.

Debt Service Fund: accounts for resources for payment of principal and interest on short and long-term debt.

Internal Service Fund: accounts for the financing of goods or services, on a cost reimbursement basis, provided by one department or agency to other departments or agencies within the same government or to other governments. The Insurance Fund is an internal service fund.

Trust and Agency Funds: The Agency Fund is used to account for money and property received and held by the County acting as an agent with only custodial responsibility. An asset and liability are recorded in equal amounts. Private purpose trust funds are used to account for expendable trust funds in which the trust principal and earnings thereon may be expended for the purposes of the trust. Private purpose trust funds are accounted for in essentially the same manner as the governmental funds.

Included in the Combining Statement of Onondaga County are the Component Units: Onondaga Community College, ONCENTER Management Corporation, Housing Development Fund Company, Industrial Development Agency, and Friends of Rosamond Gifford Zoo. OTASC (Onondaga Tobacco Asset Securitization Corporation), established to sell the tobacco bonds, is blended as a Non-major Debt Service Fund.

Revenues

General Fund revenues are comprised of locally-derived income and aid provided by New York State and the federal government. According to the County’s 2014 audited financial statements as reported under the generally accepted accounting principles (GAAP) framework of guidelines for financial accounting, the total general fund only revenues grew from $551.6 million in 2009 to $627.8 million in 2014 for a total five-year increase of 13.8%. These numbers reflect the sales tax accounting pass-through adjustment, which totaled $149.3 million in 2009 and $85.6 million in 2014. From 2013 to 2014, general fund revenues adjusted by the sales tax accounting change increased less than 1%. Gross sales tax cash receipts for 2014 again helped to offset a reduced the property tax levy which the Legislature voted to reduce by $7 million in 2013 but held flat for 2014 at $140.9 million. In total dollars, State and Federal aid for 2014 were $3 million lower than 2013 levels, but they comprised 27.4% of the total adjusted revenues in 2014, slightly below the 2013 level of 28.0%.

Local Revenue

More than half of the County’s General Fund revenues derive from sales and use tax plus real property taxes and related tax items. In 2014 these revenues reported under GAAP standards combined to total $408.5 million or 65.1% of the total General Fund revenues of $627.8 million (adjusted by $85.6 million for the sales tax accounting adjustment). Between 2009 and 2014, the county-wide property tax levy went from $179.8 to $140.9 million, a decrease over five years of $38.9 million or 21.6%. During the same 5-year period, the County’s share of sales tax revenues grew from $128.6 to $251.8 million, an increase of $123.2 million or 96%. This was also up from $245.3 million in 2013, reflecting the new sales tax sharing agreement for the ten years through December 31, 2020 and greater collections.

Expenditures

Operating Fund expenditures include all General Fund expenditures. Total general fund expenditures reported under GAAP standards increased 14.9% from $505.1 million in 2009 to $580.5 million in 2014 after the sales tax accounting adjustment in both years. This was only 1.0% above the 2013 level of $576.3 million on an adjusted basis.

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Fund Balance (non – GAAP)

The County Legislature has adopted a resolution of intent to maintain an unreserved General Fund balance equal to 10% of its General Fund revenues. With a commitment to restore reserves to 10% within three years, should it fall below. The County ended 2014 with its total fund balance at $87.7 million, of which $5 million was committed, $14.6 million was assigned, and $68.0 million was unassigned. Of the $14.6 million of assigned fund balance, $3.8 million was appropriated to balance the 2015 budget, $3.3 million is set aside for encumbrances, and the remaining $7.5 million was assigned to reduce property taxes and reduce future debt. This $7.5 million coupled with the $68.0 million of unassigned fund balance totals $75.5 million or 11.1% of adjusted General Fund revenues. Since 1999, the County’s unreserved fund balance has exceeded its 10% goal in every year except 2004. Since its adoption in December 1999, amendments to the legislation have been passed to permanently adjust the general fund calculation for the sales tax pass-thru accounting change and for pre-paid expenses. See “County Budget”, herein.

Van Duyn Home and Hospital

In 2012, the County declared its intent that, after November 30, 2013, the County would be out of the business of providing skilled nursing facility services at Van Duyn Home and Hospital, the County’s 513-bed skilled nursing facility. The sale of the facility is now complete. The County authorized the sale of certain real property interests to Onondaga Civic Development Corporation (OCDC) and entered into a Facility Acquisition Agreement with OCDC to sell certain real property interests of Van Duyn Home and Hospital to OCDC. OCDC resold those real property interests pursuant to a Facility Sale Agreement to 5075 West Seneca, LLC, effective November 30, 2013. Pursuant to an Operational Asset Purchase Agreement, the County sold the operating interests of Van Duyn Home and Hospital to VDRNC, LLC. The purchase price for the real property interest was $4,950,000, of which a $50,000 deposit was paid in escrow to OCDC. The balance is paid to OCDC over 60 months, with payments received by OCDC to be remitted to the County. The purchase price for the operating assets was $50,000 held in escrow and released to the County at closing. At closing the County transferred $2 million to the buyer; the County appropriated these funds in December 2012. Remaining facility debt service, retiree and extraneous costs will be paid from the sale proceeds and remaining fund balance.

In July 2014, the Buyer prepaid the mortgage, and OCDC transferred those funds to the County.

Tax Information

Tax Levy Limitation Law

The Tax Levy Limit Law imposes a limitation on increases in the real property tax levy of the County, subject to certain exceptions. The Tax Levy Limit Law permits the County to increase its overall

A-38 real property tax levy over the tax levy of the prior year by no more than the “Allowable Levy Growth Factor”, which is the lesser of one and two-one hundredths or the sum of one plus the Inflation Factor; provided, however that in no case shall the levy growth factor be less than one. The “Inflation Factor” is the quotient of: (i) the average of the 20 National Consumer Price Indexes determined by the United States Department of Labor for the twelve-month period ending six months prior to the start of the coming fiscal year minus the average of the National Consumer Price Indexes determined by the United States Department of Labor for the twelve-month period ending six months prior to the start of the prior fiscal year, divided by: (ii) the average of the National Consumer Price Indexes determined by the United States Department of Labor for the twelve-month period ending six months prior to the start of the prior fiscal year, with the result expressed as a decimal to four places. The County is required to calculate its tax levy limit for the upcoming year in accordance with the provision above and provide all relevant information to the State Comptroller prior to adopting its budget. The Tax Levy Limit Law sets forth certain exclusions to the real property tax levy limitation of the County, including exclusions for certain portions of the expenditures for retirement system contributions and tort judgments payable by the County. The governing board of the County may adopt a budget that exceeds the tax levy limit for the coming fiscal year, only if the governing board of the County first enacts, by a vote of at least sixty percent of the total voting power of the governing board of the County, a local law to override such limit for such coming fiscal year.

Real Property Tax Rebate

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Municipal Subdivisions in the County

There are 19 towns in Onondaga County as well as the City of Syracuse. Real property is assessed for taxation by local assessors in each town within the County and in the City of Syracuse and is placed on the respective tax rolls. The 2015 assessed and full valuations listed below were used to apportion the 2016 County property tax levy. Of the 20 taxing jurisdictions in Onondaga County, 15 have adopted a full market value assessment standard, representing approximately 84% of the County’s full market value.

2015 Assessed Value 2015 NYS for 2016 Equalization 2015 Municipalities Percent Full Towns County Tax(1) Rates (%) (2) Full Valuation(3) Value (%) Camillus $ 1,560,582,150 100.00 $ 1,560,582,150 5.98 Cicero 2,134,359,599 100.00 2,134,359,599 8.05 Clay 146,973,704 4.31 3,410,062,738 12.87 Dewitt 2,502,448,365 100.00 2,502,448,365 9.44 Elbridge 306,067,551 100.00 306,067,551 1.15 Fabius 119,692,128 100.00 119,692,128 0.45 Geddes 817,632,476 92.00 888,730,952 3.35 Lafayette 309,346,369 93.00 332,630,504 1.25 Lysander 1,537,134,771 100.00 1,537,134,771 5.80 Manlius 2,407,790,111 100.00 2,407,790,111 9.08 Marcellus 403,812,096 100.00 403,812,096 1.52 Onondaga 1,357,242,298 100.00 1,357,242,298 5.12 Otisco 4,138,658 2.17 190,721,567 0.72 Pompey 621,877,544 100.00 621,877,544 2.35 Salina 1,646,725,270 100.00 1,646,725,270 6.21 Skaneateles 1,285,296,699 100.00 1,285,296,699 4.85 Spafford 358,872,481 100.00 358,872,481 1.35 Tully 248,959,273 100.00 248,959,273 0.94 Van Buren 657,585,100 100.00 657,585,100 2.48 Town total $ 18,426,536,643 $ 21,970,591,197 82.89 Syracuse 3,695,972,078 81.50 4,534,935,065 17.11 Grand total $ 22,122,508,721 $ 26,505,526,262 100.00

(1) Assessed value is the value placed on the property by town or city assessors. (2) As a result of different assessing practices in each municipality, there is a different relationship of assessed value to full value. In order to apportion the County tax levy across jurisdictions, the different assessed values are “equalized” to full value. The 2015 equalization rates and 2015 full valuations used to apportion the 2016 adopted County property tax levy to the municipalities were established by the N.Y.S. Office of Real Property Services. (3) Full value represents the true value of a property at some prior point in time. Full value is based on actual field appraisals and surveys conducted by the N.Y.S. Office of Real Property Services, and, from that information, equalization rates were established to convert assessed value to full value.

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Full Value and County Property Tax Levy

The table below sets forth the County assessed and full valuation used for the apportionment of County taxes, the amount of the County tax levy, and the assessed and full value tax rate:

Tax Rate Per Year of Assessed Total Property $1,000 Tax Levy Value(1) Full Value(2) Tax Levy(3) Full Value

2016 $22,122,508,721 $26,505,526,262 $139,691,591 $5.10 2015 22,729,777,821 27,244,303,609 139,891,159 5.13 2014 22,540,933,339 26,924,957,719 140,891,159 5.23 2013 22,516,540,642 26,704,901,404 140,998,859 5.28 2012 22,391,182,944 26,666,826,135 148,216,571 5.56 2011 20,168,205,458 26,420,301,254 153,821,817 5.82 2010 19,980,204,538 26,148,206,733 183,997,042 7.04

(1) Assessed value for the previous year is utilized for purposes of levying County taxes. (2) Total full value figures are calculated using the taxable assessed full value for County purposes and State Equalization rates. The amount of assessed full value takes into account properties that are partially exempt from County taxation pursuant to Real Property Tax Law, Section 458 (veterans), Section 460 (clergy), Section 464 (volunteer firemen), and Section 467 (aged). In 2016, the Section 467 (aged) is not included. This procedure is set forth in Title 2 of Article 8 of the Real Property Tax Law. The New York State Office of Real Property Services assigns an equalization rate for the assessing jurisdictions within the County. (3) The County tax levy is apportioned using full value figures obtained from the municipality’s preceding year assessment roll. For example, the 2016 County tax levy is apportioned using the 2015 total full value figures, which are obtained from the municipality’s preceding 2015 assessment roll.

Tax Levy and Tax Collection Record

County Tax Collection Rates for Towns

County First Year % Used Unpaid % Unpaid Year Levy Unpaid(1) Year-End 12/31/14 12/31/14

2015 $333,509,544 N/A N/A N/A N/A 2014 326,463,729 $10,288,148 3.15% $10,288,148 3.15% 2013 319,290,719 10,116,290 3.17 5,933,724 1.86 2012 318,555,842 10,723,425 3.37 3,353,755 1.05 2011 310,719,182 10,220,139 3.29 1,779,594 0.57 2010 284,262,783 10,440,848 3.67 924,527 0.33

(1) Reflects payments made through December in the year following the year of levy. (2) Unpaids including tax liens sold. County-only first year unpaids is $1,889,577 (0.69%).

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County Tax Collection Rates for the City of Syracuse (1)

County First Year % Used Unpaid % Unpaid Year Levy Unpaid(1) Year-End 12/31/14 12/31/14

2015 $71,923,422 N/A N/A N/A N/A 2014 69,503,686 $5,678,080 8.17% $5,678,080 8.17% 2013 66,984,842 4,035,921 6.03 2,856,472 4.26 2012 68,683,460 4,450,687 6.48 2,162,749 3.15 2011 67,037,234 4,677,041 6.98 1,757,538 2.62 2010 69,062,961 4,892,297 7.08 1,653,836 2.39

(1) The City of Syracuse allows for quarterly payment of current year taxes. (2) Reflects payments made through December in the year following the year of levy.

Accumulated County Tax Collection Rates for the County and City (1)

County First Year % Used Unpaid % Unpaid Year Levy Unpaid(1) Year-End 12/31/14 12/31/14

2015 $405,432,966 N/A N/A N/A N/A 2014 395,967,415 $15,966,228 4.03% $15,966,228 4.03% 2013 386,275,561 14,152,211 3.66 8,790,196 2.28 2012 387,239,302 15,174,112 3.92 5,516,504 1.42 2011 377,756,416 14,897,180 3.94 3,537,133 0.94 2010 353,325,744 15,333,145 4.34 2,578,363 0.73

(1) The City of Syracuse allows for quarterly payment of current year taxes. (2) Reflects payments made through December in the year following the year of levy. (3) Unpaids including tax liens sold. The after tax lien sale number is $6,954,185 (2.0%).

Largest Taxpayers – 2014 Assessment Roll

Name Type Estimated Full Valuations

Niagara Mohawk Utility $713,403,676 Verizon Utility 143,285,927 HUB Properties Trust Real Estate 56,351,512 Wegmans Food Market Retail/Grocery 54,057,300 CSX Rail Road 40,837,962 Bristol Myer Squibb Manufacturing 39,013,800 Great Northern Mall Retail 38,637,182 Shoppingtown Mall NY LLC Retail 36,996,400 Aldi Inc. Retail/Grocery 32,015,000 Buffalo Main Street LLC Retail 30,172,877

The ten largest taxpayers listed above have an estimated full valuation of $1,184,771,636, which represents 4.51% of the County’s 2015 full value tax base used for County tax apportionment. Source: County tax rolls.

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Constitutional Tax Margin

In accordance with Section 10 of Article VIII of the State Constitution, the amount which may be raised in the County by taxes on real estate in any fiscal year for County purposes, in addition to providing for the interest on and the principal of all indebtedness, may not exceed an amount equal to 1.5 per centum of the five-year average full valuation of taxable real estate of the County, less certain exclusions as prescribed therein.

Below is a summary of the computation of the Constitutional Tax Margin for 2012 through 2016 which incorporates State adjustments for final equalization rates:

2012 2013 2014 2015(1) 2016(1) Tax Limit $374,466,034 $380,606,104 $384,646,320 $391,369,417 $397,782,538 Total Additions/Exclusions 23,572,348 26,899,343 30,036,622 31,178,244 34,902,495 Total Taxing Power 398,038,382 407,505,447 414,682,942 422,547,661 432,685,033 Total Tax Levy(2) (subject to limit) 148,216,571 140,998,859 140,891,159 139,891,159 139,891,159 Tax Margin 249,821,811 266,506,588 273,791,783 282,656,502 292,793,874 Tax Margin % 66.71% 70.02% 71.18% 72.22% 73.61%

(1) The 2015 and 2016 is based on budgeted information. (2) Total Tax Levy is net of both credits for prior year surplus or deficit sales taxes and the town’s share of sales tax used to reduce the County levy on towns.

Tax Collection Procedure

Real property taxes levied for County purposes are collected and enforced in accordance with the Onondaga County Special Tax Act. County, town, special district and re-levied unpaid village and school district taxes are levied on or about December 24, and are due through January 31 without penalty. All towns within the County, and the City of Syracuse, have the responsibility for collecting County real property taxes during the warrant period (January 1 - March 31).

Each town tax receiver is required to pay the full amount levied for town and town special district purposes to the town supervisor. The balance of collected taxes is remitted to the County’s Chief Fiscal Officer. After March 31, uncollected taxes relating to property located outside the City of Syracuse becomes the responsibility of the County’s Chief Fiscal Officer. The City of Syracuse retains responsibility for collecting County taxes on property within the City.

After the return of the town tax rolls to the Chief Fiscal Officer on April 1, the following penalties accrue with respect to delinquent taxes: 6% for April; 6.5% for May; 7% for June; 7.5% for July, plus $.25 for filing a notice of lien in the office of the Chief Fiscal Officer and $5.00 to discharge any such filed lien; and 8% for August. Delinquent taxes of the current year are advertised once each week for two weeks on or about September 1. Penalty fees for September are 8%, $5.25 filing fee, plus a $70.00 charge added to cover advertising and administrative expenses. On or about October 1, the Chief Fiscal Officer conducts a tax certificate sale. The County of Onondaga purchases most or all of the available tax sale certificates (“Certificates”), covering the amount of tax due, plus penalties.

A small portion of the Certificates purchased on behalf of the County are subsequently sold to private individuals. Certificates sold at the annual tax sale may be redeemed at any time within a three-year period following such sale. Interest at the rate of 12% per annum is added to the face amount of the Certificate.

In 1995, the Onondaga County Legislature passed a local law, which allowed for installment payment of delinquent property taxes that are the responsibility of the County’s Chief Fiscal Officer.

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Provisions in the local law enable a property owner to make a 25% down payment of all delinquent taxes and finance the balance over a two year period with twenty-four equal monthly payments. This legislation followed the County enactment of the partial payment program of current year taxes in 1994. Both programs have met with overwhelming success and have played a significant role in reducing the number of properties included in the annual delinquent tax auction.

The City of Syracuse Commissioner of Finance acts as the collector of County taxes levied on real property located within the City. Prior to January 1, 1978, the City’s Commissioner of Finance remitted to the County’s Commissioner of Finance, now the Chief Fiscal Officer, the entirety of such county tax levy. Since 1978, however, the City’s Commissioner of Finance has been remitting to the County’s Chief Fiscal Officer only the amount of such County tax levy actually collected by the City. The City remains responsible for the enforcement of uncollected tax liens, and periodically, uncollected tax liens of the prior year are sold at tax sale and the proceeds of such sale are remitted to the Chief Fiscal Officer. The County maintains a reserve for uncollected taxes to provide for any deficiency in such remittance.

In 2012, the New York State Legislature enacted Article 16 of Chapter 35 of the Not-For-Profit Corporation Law (also known as the “land bank act”) in order to address growing concerns about vacant, abandoned and tax delinquent properties and to serve as a tool to return these properties to productive use. On March 27, 2012, Onondaga County and the City of Syracuse created the Greater Syracuse Property Development Corporation, a non-profit corporation, to serve as the region’s land bank. The threat of foreclosure by the City and acquisition by the land bank has resulted in increased tax collection revenue for the both the City and County. Since its creation, the land bank has acquired title to hundreds of properties and is working to ensure that properties are redeveloped in a responsible manner, by qualified developers, for purposes that benefit the surrounding community and reverse the decline of property values in blighted areas.

Payments In-Lieu of Taxes (“PILOTs”)

The County received $2,655,087 and $2,615,594 from payments in lieu of taxes for the fiscal years ending 2013 and 2014 respectively. Budgeted 2015 pilots are $2,829,806. PILOTs are received from various economic development agreements negotiated by the County. Although these properties are not on the tax roll, each property has an assessed valuation determined in the same manner as real property taxes.

Onondaga County Sales Tax

In September 2004, the County raised its local sales tax rate to 4% from 3%. New York State law requires a reauthorization of local sales rates in excess of 3% every two years. Onondaga County’s “additional” 1% rate was reauthorized by the State in July 2013 for the period December 1, 2013 - November 30, 2015. The County Legislature determines the allocation of sales tax every ten years and on May 4, 2010 the County Legislature unanimously approved a sales tax sharing agreement for the years 2011-2020. This agreement covers the entire 4% local share and acknowledges the “additional” 1% rate must be reauthorized by the New York State Legislature every two years.

For 2014 the agreement essentially gave the City 24.0% of the total, while the County retained 74.6%. Towns no longer received any allocation and the Schools’ share remained at 1.4%. This new agreement along with steady overall sales tax growth increased the County’s revenues from sales taxes by $11.3 million to $245.3 million in 2013 and by an additional $7 million in 2014 to $252.2 million.

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In 2014, local sales tax revenues were allocated as follows:

3% Formula Percent 1% Formula Percent Percent Dollar (%) Dollar (%) Total Dollar (%) County 249,907,205 98.5 2,301,511 2.7 252,208,716 74.6 City 0 0.0 80,947,743 96.0 80,947,743 24.0 Schools 3,697,247 1.5 1,053,788 1.3 4,751,035 1.4 $253,604,452 $84,303,041 $337,907,494

Debt Management

The County has been proactive in making debt management a priority. The County actively monitors its outstanding debt, reviewing candidates for refunding. Taking advantage of the lowest interest-rate environment in forty years, the County refunded $18.5 million of 10-year-old bonds in 2003, saving $1.8 million through 2014. In 2009, a $33,345,000 refunding resulted in savings of $3.3 million over 14 years. The County refunded approximately $21 million of its bonds in June 2012 saving $1.9 million and $19.6 million in June 2014 saving $1.2 million through 2026. The County anticipates moving forward with an $11.3 million refunding in summer 2015 with projected savings of $0.8 million through 2027

In 2009, the County took advantage of the available incentives and issued Build America Bonds (BAB’s) and Recovery Zone Bonds (RZ’s) totaling $22.4 million. Over the 16 year life of the BAB’s the County expected to realize the Federal Government’s 35% interest subsidy of $3.7 million and for the 20 years of the RZ’s, a 45% subsidy totaling over $2.3 million. The Federal Government’s sequestration has eliminated a percentage of the annual subsidy beginning in March 2013 extending through September 20, 2023.

As part of the 2008 budget process, the County amended its 1999 resolution that established the 10% fund balance goal. The calculation for General Fund revenues was formally adjusted to reflect the 2006 NYS accounting change for sales tax passed-through to other municipalities. Since the County ended 2006 with its fund balance at 12.9% of General Fund revenues, the 2008 budget allocated $8 million to fund projects for which the County had not yet borrowed. That provided approximately 15 years of $750,000 annual tax relief. During the 2013 budget process, the County Legislature approved legislation designating $5 million of fund balance for future debt service payments. This amount is still available for use.

Although all of the County’s debt is “faith and credit”, certain of the County’s general fund debt service are supported by sources outside of local tax assessments. Emergency 911 Center’s debt, for its upgrades and interoperable system, is supported by the landline and wireless surcharge revenue. The County petitioned New York State and was granted an increase in its landline surcharge effective December 1, 2009 to enable continued debt service offset for its emergency communications radio equipment. New York State Office of Court Administration subsidizes interest on debt for upgrades to the County courthouse. The Community College debt is partially supported with college chargeback revenues.

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The County’s debt policies were formalized in 2002 and were again ratified by the County Legislature during the 2015 Budget process. The debt management goals are:

2015 2015 Goal Statement (General Fund) Numerical Goal Budget Pro-forma(2)

Debt Service/General Funds Revenue (1) 5.5% 4.08% 4.3% Minimize debt service of County residents Maximum total net indebtedness $700/capita $507/capita $610/capita

Full valuation taxable property 1% 0.9% 1.08% Rapid debt repayment – Retire debt within 10 years 65% 81% 69%

(1) Adjusted revenues to reflect the sales tax accounting change. See “Onondaga County Sales Tax”, herein. (2) Pro forma includes the addition of the Series 2015 Bonds to total outstanding debt, adding subsequent year debt service to current levels. Since the information above relates to the General Fund only; the net impact of the new issues is only $62,896,062 to the pro forma (already calculated in the pro forma figures).

Outstanding Debt

Fiscal Year Ending December 31st 2010 2011 2012 2013 2014

Bonds (1) $378,232,800 $402,138,494 $437,519,534 $474,120,566 $601,749,786 Bond Anticipation Notes (2) 17,383,334 20,000,000 19,529,000 60,387,091 0 Total $395,615,134 $422,138,494 $457,048,534 $534,507,657 $601,749,786

(1) After defeasance, including tobacco bond defeasances initially totaling $95,197,600 and $19,919,754 in 2001 and 2005, respectively. (2) Does not include accrued payments from EFC or grants receivable from other sources.

Details of Outstanding Indebtedness

The following table sets forth the short-term and bonded indebtedness of the County as of November 6, 2015.

Amount Outstanding Amount Outstanding June 25, 2015 November 6, 2015 Short-Term Indebtedness (1) $ 0 $ 0 Bonded Indebtedness (2) 656,319,786 639,293,312 Total Indebtedness 656,319,786 639,293,312 Total Indebtedness after Defeasance (2) 641,439,786 630,623,312

(1) Drawdown of EFC grid notes. (2) See "Bonded Indebtedness as of June 25, 2015" below.

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Bonded Indebtedness as of November 6, 2015

Date Interest Amount Bond Issue of Bonds Rate (1) Outstanding 11/14/200 General Obligation (Serial) Bonds, 2006 Series A 6 3.750-5.000% 1,875,000 12/19/200 General Obligation (Serial) Bonds, 2007 Series A 7 4.000-5.000% 2,700,000 General Obligation (Serial) Bonds, 2009 Series A 3/5/2009 3.000-5.000% 40,950,000 General Obligation (Serial) Bonds, 2010 Series A (Tax Exempt) 6/29/2010 4.000-5.000% 12,050,000 General Obligation (Serial) Bonds, 2011 6/29/2011 2.000-5.000% 26,650,000 General Obligation (Serial) Bonds, 2012 6/28/2012 3.000-5.000% 44,375,000 General Obligation (Serial) Bonds, 2013 6/28/13 4.000-5.000% 63,310,000 General Obligation (Serial) Bonds, 2014 6/27/14 2.5000-5.000 34,800,000 General Obligation (Serial) Bonds, 2015 5/28/15 3.000-5.000% 79,900,000 General Obligation Refunding (Serial) Bonds, 2012 7/11/2012 2.000-5.000% 13,055,000 General Obligation Refunding (Serial) Bonds, 2014 7/14/14 2.000-5.000% 19,320,000 General Obligation Refunding (Serial) Bonds, 2015 6/24/2015 2.000-5.000% 11,370,000 General Obligation Refunding (Serial) Bonds, 2009 12/3/2009 3.000-5.000% 16,050,000 General Obligation (Serial) Bonds, 2010 Series B Federally Taxable Build America Bonds 6/29/2010 4.250-5.150% 17,570,000 (1) General Obligation (Serial) Bonds, 2010 Federally Taxable Recovery Zone Bonds 6/29/2010 5.500-5.900% 4,905,000 (2) NYS EFC Series 2000 3/9/2000 4.080-5.990% 390,000 (3) NYS EFC Series 2001A 3/8/2001 3.430-5.130% 3,055,000 (3) NYS EFC Series 2001B 7/26/2001 2.619-5.154% 715,000 (3) NYS EFC Series 2002A 3/14/2002 1.362-4.982% 631,408 (3) NYS EFC Series 2002G 7/25/2002 1.533-5.795% 7,615,000 (3) NYS EFC Series 2003A 3/13/2003 1.031-4.711% 420,000 (3) NYS EFC Series 2003F 7/14/2003 0.721-4.500% 2,070,936 (3) NYS EFC Series 2004D 7/22/2004 1.581-4.964% 4,745,000 (3) NYS EFC Series 2005A 3/3/2005 1.564-4.399% 8,745,000 (3) NYS EFC Series 2005B 7/14/2005 2.489-3.9995 3,015,000 (3) NYS EFC Series 2006C 7/13/2006 3.626-4.861% 32,870,000 (3) NYS EFC Series 2007D 7/1/2007 3.630-4.789% 29,250,000 (3) NYS EFC Series 2008A&B 6/19/2008 4.270% 1,135,000 (3) NYS EFC Series 2010C 5/1/2010 0.286-4.226% 2,240,000 (3) NYS EFC Series 2011C 6/1/2011 0.281-4.113% 13,005,000 (3) NYS EFC Series 2012B 5/24/2012 0.445-4.169% 10,505,000 (3) NYS EFC Series 2012E 10/7/2012 0.269-3.539% 3,585,000 (3) 0.1815- NYS EFC Series 2014B 7/2/2014 4.292% 125,355,968 NYS EFC Series 1998 3/15/1998 3.750-5.200% 1,065,000 Total Serial Bonds Outstanding as of June 25, 2015 (4) $639,293,312 (4)

(1) Represents Build America Bonds which will receive up to a 35% federal interest subsidy. In Federal fiscal year ending 2014 and 2015 the subsidy expected was reduced by 7.2% and 7.3%, respectively. The 2016 reduction is 6.8%. Reductions are expected through Federal fiscal year ending 2023. The amount of reduction will be announced annually prior to the end of the preceding fiscal year. (2) Represents Recovery Zone Bonds which will receive up to a 45% federal interest subsidy. In Federal Fiscal Year ending 2014 and 2015 the subsidy expected was reduced by 7.2% and 7.3%, respectively. The 2016 reduction is 6.8%. Reductions are expected through Federal fiscal year ending 2023. The amount of reduction will be announced annually prior to the end of the preceding Federal fiscal year. (3) NYS Environmental Facilities Corporation (Onondaga County portion). Interest expense is subsidized by the New York State Revolving Loan Fund Program for Clean Water. (4) As of November 6, 2015, $8,670,000 is defeased with proceeds from Tobacco Bonds. The defeased amount is not part of the total above.

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Calculation of Total Net Indebtedness (As of November 6, 2015)

The following table sets forth the debt limit of the County and its debt-contracting margin as of November 6, 2015:

5-Year Average Full Valuation of Taxable Real Property ...... $ 26,091,294,438 Debt Limit-7% thereof (1) ...... 1,826,390,611

Outstanding Indebtedness: Bonds ...... $ 647,963,312 Bond Anticipation Notes ...... 0 Outstanding Gross Indebtedness ...... $ 647,963,312

Less Exclusions: Appropriations (2) ...... $ 0 Sewer Debt (Bonds) (3) ...... 331,125,792 Sewer Debt (Notes) (3) ...... 0 Water Debt (Bonds) (4) ...... 33,122,182 Defeased Bonds (5) ...... 8,670,000 Total Exclusions ...... $372,917,974

Total Net Indebtedness ...... $ 275,045,338 Net Debt-Contracting Margin ...... $ 1,551,345,273 Percentage of Debt-Contracting Power Exhausted...... 15.06% (1) The Debt Limit of the County is computed in accordance with the provisions of Article VIII of the State Constitution and Title 9 of Article 2 of the Local Finance Law. (2) Appropriations from adopted 2015 Budget on principal for indebtedness not otherwise excluded. (3) Pursuant to Section 124.10 of the Local Finance Law (4) Pursuant to Section 136.00 of the Local Finance Law. (5) Debt defeased with Tobacco Revenue Bonds in August 2001 and November 2005.

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Bonded Debt of Political Subdivisions Within The County

The approximate gross bonded debt of political subdivisions within the County is as follows:

City of Syracuse including the City School District (as of May 31, 2014) ...... $ 403,211,986 Other School Districts (as of June 30, 2014) ...... 501,801,641 (1) Towns (as of December 31, 2013) ...... 73,568,234 Villages (as of May 31, 2014) ...... 43,674,419 Fire Districts (as of December 31, 2013) ...... 19,609,974 Gross Total ...... $ 1,041,866,254

The approximate amount of the above gross bonded debt, which is excludable from various debt limitations, is as follows:

State Aid - Support of School Bonds ...... $ 459,510,980 (2) Town Water & Sewer Bonds ...... 11,701,745 Village Water & Sewer Bonds ...... 1,163,600 City of Syracuse ...... 179,492,749 (3) Total Excludable ...... $ 651,869,074 Net Bonded Debt ...... $ 389,997,180

(1) Does not include Revenue or Tax Anticipation Notes. Does include $40,615,000 bonds refunded to align debt service with building aid payout schedules and/or issued as advance refunding bonds to realize present value savings. (2) Includes $47,200,000 State Building Aid applicable to Syracuse City School District as well as $41,420,000 bonds refunded to align debt service with building aid payout schedules and/or issued as advance refunding bonds to realize present value savings. (3) Includes Debt Reserves comprised of funds received from the sale of Parking Garage Facilities which have outstanding bonds and reserves for special assessment debt ($4,799,671), Water Debt ($68,191,237), Revenue Anticipation Notes ($80,400,000), refunded bonds ($22,285,000), and appropriations not otherwise excluded ($3,816,841).

Debt Ratios

The following table sets forth certain ratios related to the County’s indebtedness as of November 6, 2015:

As of November 6, 2015 Amount of Per % of Full Indebtedness Capita (1) Valuation (2) Gross Direct Indebtedness (3) $ 647,963,312 $ 1,384 2.46% Net Direct Indebtedness (3) 275,045,338 587 1.05% Gross Direct plus Net Underlying Indebtedness (4) 1,037,960,492 2,217 3.95% Net Direct plus Net Underlying Indebtedness (4) 665,042,518 1,420 2.53%

(1) The County’s 2014 population is 468,196 according to the U.S. Census. (See “THE COUNTY – Population Trends” herein.) (2) The County’s full valuation of taxable real estate for 2016 is $26,295,531,955. (3) See “Calculation of Total Net Indebtedness (as of November 6, 2015)” herein. (4) The County’s applicable share of net underlying indebtedness is $389,997,180. (See “Bonded Debt of Political Subdivisions within the County” herein.)

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Estimate of Obligations to be Issued

The County has obtained and is continuing to pursue low-interest financing from the State through the Environmental Facilities Corporation (EFC) for various sewer improvements including those relating to the Onondaga Lake Amended Consent Judgment (ACJ). The County has financed $333 million in projects with EFC long-term financing bonds. The EFC’s short-term zero-interest loan program is an attractive source of funding that the County takes advantage of. When available, short-term financing is used for up to three years during construction before permanent grant and subsidized loan funding is obtained. Stimulus funds (American Recovery and Reinvestment Act “ARRA” funding) are included in the short-term financing and is resulting in $11.8 million in loan forgiveness. After the EFC 2014 financings, the remaining amount authorized and unissued is $61.9 million for ACJ purposes.

EFC has been proactive and in 2011- 2015 refinanced several of its issuances that the County participated in, resulting in lower interest rates in 2011 and subsequent years.

Rate of Principal Retirement

The following table represents the net amounts and percentage of principal of general obligation long-term debt to be retired over the following periods.

Fiscal Years Ending Accumulated Percent Accumulated Total Amount (1) December 31st Term Retired (%) Percentage (%) 2016 – 2020 5 Years $ 115,256,630 45% 45% 2021 - 2025 10 Years 81,409,498 32% 77% 2025 – 2030 15 Years 40,311,616 16% 93% 2031 – 2034 20 Years 17,456,000 7% 100% Total $ 254,433,744 (1) Represents only General Fund long-term debt.

State Aid

In 2016, budgeted State Aid represents approximately 18.0% of the County’s General Fund revenues. Nearly all of the State Aid received by the County is formula-based assistance for specific mandated human service programs.

County Receipt of Indian Casino Revenues

Under the Upstate New York Gaming and Economic Development Act, for the first time, every county in an Indian exclusivity zone, which includes the County, will share in Indian gaming facility revenues. Ten percent of the net gaming revenue retained by the State from Native American gaming facilities will be distributed to the counties in each respective exclusivity zone, and existing tribal payments will be preserved. The County is part of the Central New York/Mohawk Valley Region exclusivity zone. The Central New York/Mohawk Valley Region will receive $44.2 million annually as a result of the Act and the recent settlement with the Oneida Indian Nation of New York. According to the New York State Division of Budget estimates, projected annual revenue allocation of this $44.2 million accruing to counties and school districts in the Central New York/Mohawk Valley regions; $20.7 million

A-51 will be allocated to provide tax relief or educational assistance and the remaining $23.5 million will be allocated to the counties within said region. The County expects to receive $2.5 million annually of the Central New York/Mohawk Valley Region’s $23.5 million allocation. These amounts are over and above the Statewide education or property tax relief funds that each region will receive from the new destination gaming resorts in other regions. These payments are earmarked to fund the debt service associated with the borrowing for construction of the Lakeview Amphitheater.

Conservative estimates for State revenues were included in the County’s 2016 budget. The County constantly monitors State budget actions which might negatively impact County operations and endeavors to undertake appropriate measures to mitigate these impacts where possible.

2015-2020 Capital Improvement Plan

In addition to the budget monitoring process for the operating budget, the six-year Capital Improvement Plan (“CIP”) is designed to balance the need for public facilities with the fiscal capacity of the County to provide for these needs. The CIP provides the basis for the development of reliable capital expenditure, debt service and revenue estimates, as well as impacts on future operating budgets.

In conjunction with the County’s land use plan, currently the 2010 Development Guide but soon to be replaced by the Sustainable Development Plan, a draft of which has been released for public review and feedback, the CIP serves as a general guide for the planning and construction of major capital projects facilities in the County. The County adopts a six-year capital plan, which sets forth the capital projects – both new and previously authorized, which are anticipated to be either authorized or continued in the ensuing six fiscal years. The County Legislature adopted the 2015-2020 Capital Improvement Plan on October 14, 2014.

The adoption of the capital plan does not constitute an authorization to proceed with a project nor the financing thereof. Each project must be voted on individually by the County Legislature and passed by a two-thirds majority to authorize the issuance of obligations. Accordingly, it is difficult to exactly forecast which projects and the total amount of bonds outlined by the capital plan that may be authorized by the County Legislature during 2015-2020.

The 2015-2020 Capital Plan outlined $199.5 million of proposed general fund projects, $193.9 million of sewer projects and $20.2 million of water projects, for a total of $413.6 million projected to be funded by borrowing during the 6 year period 2015-2020. The figures below estimate when the CIP Projects will be funded with County debt (000’s omitted). The table includes $32.3 million (in 2015) from the previous years’ authorizations. If we add this amount to the total amount of borrowing in our 2015 -2020 CIP ($413.6 million) we will have a 6 year total of $445.93 million, if all projects are approved and undertaken.

Department 2015 2016 2017 2018 2019 2020 Total Emergency 350 3,379 502 7,300 - 3,182 14,713 Communications Facilities Management 4,725 6,275 6,150 3,000 4,000 4,500 28,650 Parks 49,500 2,365 1,800 1,700 500 500 56,365 Finance 600 - - - - - 600 Office of Environment - 1,019 1,199 1,199 1,203 1,203 5,823 Sheriff - 13,350 - - - - 13,350 I.T. 989 - - - - - 989 Library 2,500 - - - - - 2,500 OCC 45 17,800 3,675 9,959 2,153 - 33,632 Transportation 6,837 23,088 16,174 2,400 2,400 2,400 53,299 Metropolitan Water 5,500 1,700 10,000 8,500 - - 25,700 Board(1) Water Environmental 21,954 57,865 51,890 21,000 17,800 39,800 210,309 Protection (2) Totals 93,000 126,841 91,390 55,058 28,056 51,585 445,930

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(1) While Metropolitan Water Board capital projects are financed with general obligations of the County, debt service on these obligations, in the first instance, is paid with special ad valorem levies apportioned among three zones of assessment. There is still $16.4 million authorized/unissued after this issue for tanks and energy efficiencies. (2) In addition to the numbers presented above, there still remains $79.8 million in authorized unissued debt that we plan to issue during the period 2016- 2019. Approximately half of this amount might qualify for EFC loan. Financing through EFC will provide for subsidized interest payments.

State Comptroller’s Fiscal Stress Monitoring System

The State Comptroller has reported that New York State’s school districts and municipalities are facing significant fiscal challenges. As a result, the State Comptroller has developed a Fiscal Stress Monitoring System (“FSMS”) to provide independent, objectively measured and quantifiable information to school district and municipal officials, taxpayers and policy makers regarding the various levels of fiscal stress under which the State’s school districts and municipalities are operating.

The most current applicable report of the State Comptroller designates the County as “No Designation”.

Litigation

The County is subject to a number of lawsuits in the ordinary conduct of its affairs. The County does not believe that these suits or any other existing or threatened suits individually, or in the aggregate, will have a material adverse effect on the financial condition of the County. Set forth below is a discussion of the County’s insurance against certain risks of loss and a summary of larger claims brought against the County.

Self-Insurance. The County has elected to self-insure certain risks of loss, including workers’ compensation, all liability risks and certain physical damage risks. The County’s self-insurance program also provides certain medical benefits to all active and retired employees, which is administered by a third-party. In addition, to limit self-insurance exposure, the County has purchased an Excess Liability Insurance Policy, subject to certain exclusions, for claims in excess of the County’s self-insured retention of $2,000,000. Since 1996, the County has contracted out the administration of its workers’ compensation program. The County has established an internal service fund to account for all self- insurance activities, including liability judgments. The fund is supported by annual budget appropriations, which are charged back to the specific departments.

Tax Certiorari Claims. There are a number of tax certiorari proceedings pending involving properties that are subject to the levy of County taxes. The plaintiffs in these matters have asserted that their properties are over-assessed and are seeking assessment reductions. A refund of excess taxes is also generally requested. Tax certiorari claims are administered by the City of Syracuse and by the towns,

A-53 which assess property in the County. Historically, certiorari claims have been settled through negotiations, resulting in amounts, at times, substantially less than originally claimed. Many settlements provide for future adjustments with no direct outlay of money. The County, however, is responsible for the County portion of any certiorari tax refunds. The County’s certiorari claims for 2010 through 2014 were $459,255, $193,919, $452,897, $292,161 and $530,864, respectively. The County has not found it necessary to borrow funds for tax certiorari refunds since budgeted amounts, together with other available funds, have been sufficient to meet such requirements.

Onondaga Lake. On January 20, 1998 Onondaga County entered into an Amended Consent Judgment (“ACJ”) with the New York State Department of Environmental Conservation (“DEC”) and the Atlantic States Legal Foundation (“ASLF”) to settlement of litigation commenced in 1988 which alleged violations of the Clean Water Act in the discharge of wastewater into Onondaga Lake from the Metropolitan Sewage Treatment Plant (“Metro”) and combined sewer overflow (“CSO”) outfalls. The settlement set forth a plan of required upgrades and other measures to address bacteria, ammonia and phosphorus in lake waters contributed to by said discharges. The ACJ was filed in the U.S. District Court for the Northern District of New York.

Under the ACJ, the County has been required to undertake a number of capital projects and related monitoring activities intended to meet the effluent limits specified therein. Construction of these ACJ projects commenced in 1998. To date, over 30 ACJ projects have been completed. These projects have focused on abatement of overflow from combined sewers in portions of the consolidated sanitary district and the reduction of effluents primarily from Metro. The entire ACJ program was expected to be completed within the final ACJ milestone date of January 1, 2012. However, in 2008, the ACJ parties agreed to extend the final major milestone dates for the Clinton and Harbor Brook CSO projects from January 1, 2012 to January 1, 2013 and to complete a review process on these and related CSO projects remaining to be completed under the ACJ. The review included extensive analysis of the use of green infrastructure technologies as alternatives to the current ACJ planned projects and the impacts of the use of these green technologies on the need for and sizing of collection, treatment and storage (gray) facilities when they are installed upstream of CSO discharges. The analysis illustrated the benefits of a gray/green program.

In September of 2009, the parties presented to the U. S. District Court Judge for the Northern District of New York, proposed amendments to the ACJ (the Fourth Stipulation to the ACJ). The modifications were endorsed by the United States Environmental Protection Agency (“EPA”) and the Department of Justice (“DOJ”). The Onondaga Nation and a number of community groups that had opposed implementation of the remaining ACJ CSO projects expressed strong support for the modifications. The modifications to the ACJ, approved by the United States District Court for the Northern District of New York on November 16, 2009, replace the current CSO program with a combination of gray and green infrastructure programs to be implemented in phases and completed by December 31, 2018. The revised program requires 95% system wide annual average wastewater volume capture by more environmentally beneficial methods. Projects incorporating these methods, as outlined above, are commonly referred to as “gray” and “green” projects.

The 1998 ACJ also required the County to comply with very stringent Stage III phosphorus limits set at .02 mg/l. Water quality improvements realized by implementation of the Stage II phosphorus upgrades and compliance costs to construct facilities capable of meeting the Stage III phosphorus limits resulted in a reassessment of the need to comply with the very stringent limit. Data collected by DWEP through the ACJ-mandated Ambient Monitoring Program from 2007 through 2011, and the result of studies required to be performed by the County pursuant to the Fourth Stipulation and Order enabled the County to aggressively explore attainment of the ACJ effluent goals without implementing additional major upgrades at Metro or diverting the Metro effluent to the Seneca River. These efforts built upon the

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Fourth Stipulation and Order provisions requiring additional studies to enable the State to make a more informed decision on the need for additional phosphorus limit reductions at Metro.

The additional studies focused on developing data and approaches to support alternative means of compliance and reviewing the potential benefits and costs of going forward or seeking relief from Stage III compliance standards. The studies required by the Fourth Stipulation and Order included:

(a) A study to determine the extent to which the phosphorus currently discharged by Metro is a readily available source of aquatic plant nutrient;

(b) An additional hydrologic study to assist in evaluating the impact that phosphorus from Onondaga Creek has on Onondaga Lake;

(c) An evaluation of potential additional opportunities at Metro to further maximize the plant’s current capacity to more effectively remove phosphorus and a commitment to implement any resulting recommendations; and

(d) A further evaluation of available technologies that could be used to reduce phosphorus discharges from Metro, including implementation feasibility, costs and applicable implementation time frames.

A July 2007 engineering report on ACJ Pilot Project for meeting Stage III phosphorus limits indicated that construction of facilities needed to approach those limits could exceed $146 million. Studies completed by OCDWEP in 2011 to evaluate optimization of the Metro plant to more reliably meet the current .1 mg/l phosphorus limit, and to evaluate the current limit of technology for further reducing phosphorus effluence to meet the ACJ goal of a .02 mg/l phosphorus limit for a continued in-lake discharge produced planning level capital cost estimates that ranged from $6 million for implementation of the proposed optimization program to an estimated $900 million for construction of a reverse osmosis facility, all exclusive of post construction operation and maintenance costs. An evaluation of the water quality benefits of constructing advanced treatment facilities or diverting all or a portion of Metro’s flow to the Seneca River indicated that water quality improvements to be realized from such undertakings appear to be marginal and thus not justified by the costs

In March 2012, the NYSDEC released draft phosphorus TMDL that incorporated the results of the studies conducted pursuant to the requirements of the Fourth Stipulation and Order and the approved Onondaga Lake Water Quality Model. The draft TMDL confirmed that significant investments in capital projects to meet the 0.02 mg/l final effluent limit for phosphorus would not yield significant additional phosphorus related water quality improvements and incorporated recommendations that the County proceed with plans to optimize current phosphorus treatment technology and bypass reduction efforts. The draft TMDL recommended that the current Metro interim effluent limit of 0.1 mg/l, based on a twelve month rolling average be confirmed as the final effluent limit. After a 30-day period of public comment the NYSDEC adopted the draft TMDL as the recommended final TMDL and submitted it to the Environmental Protection Agency (EPA) for Review

On June 29, 2012, the EPA approved the TMDL. OCDWEP estimates that the cost of complying with the optimization and bypass reduction program required to assure that phosphorus discharges from Metro remain below the maximum loadings to the Onondaga Lake allowed by the TMDL will be in the range of $34.4 million. It is worth noting that these costs include an estimated $20.2 million bypass reduction project also required to enable the Metro plant to comply with revised effluent limits for chlorine residuals

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In its 2013 Annual Report regarding ACJ compliance, required to be delivered to the NYSDEC on April 1, 2014, the County reported compliance with all major construction milestones and all required CSO capture milestones.

Financial Considerations: OCDWEP has advised that in today’s dollars, the estimated cost of the improvements and studies required by the revised ACJ is $695.4 million, excluding interest expenses.

All regulatory mandates associated with the 2009 ACJ amendment have thus far been met and all necessary approvals have been received including conditional of approval for the CSO Floatables Facilities Plan. Construction continues for several large-scale CSO projects, including Clinton CSO Storage, Harbor Brook CSO Storage,(both in the performance evaluation phase) and CSO 003 and 004 Conveyances; all have been placed into operation within compliance due dates. Planning level costs are known for the majority of all other ACJ projects (including green infrastructure). Construction of the 063 conveyance project has also commenced. Planning-level costs for optimizing Metro WWTP phosphorus treatment have been identified, as have the costs for complying with the revised bacteria and associated chlorine residual limits for the METRO bypass outfall which will also contribute to achievement of the phosphorus TMDL allocation for METRO. The phosphorus optimization project has a current estimated cost of 14.2 million. The bacteria/chlorine project has a current estimated cost of $20.2 million. These efforts shall serve to further assist Onondaga County in consistently complying with the newly issued Metro WWTP SPDES permit - which was modified to reflect NYSDEC’s recently promulgated Total Maximum Daily Load (TMDL) for phosphorus for Onondaga Lake (June 2012) as well as revised disinfection requirements.

The State has appropriated $74.9 million of the Clean Water/Clean Air Environmental Bond Act funds for projects covered under the ACJ. In addition to aid through the Environmental Bond Act, based on pledges by state officials, the County also planned on receiving approximately $85 million in supplemental funding over the 15 years of the project as initially scheduled in the 1998 ACJ. To date, 88million has been received from other New York State sources. The federal government has already appropriated $122.6 million in federal funds (inclusive of assistance from the U.S. Army Corps of Engineers). The Harbor Brook project received ARRA funds of $11.8 million in loan forgiveness. In addition, the County has received $13.8 million in funds from other sources (City and the Niagara Mohawk Power Corporation (now National Grid) and has cash on hand of $9.1 million.

To date, the County has closed on $258.1 million in EFC long term loans to fund lake projects. The County anticipates $117.4 million in local funding for the gross capital costs associated with the ACJ in its Capital Improvement Plan.

It is anticipated that once the ACJ CSO projects have been completed, discharges from County facilities will not cause or contribute to alleged bacteria exceedences in Onondaga Lake unless applicable standards have been made more restrictive. However, despite the signing and approval of the Fourth Stipulation, in the event that the ACJ projects do not bring the County into compliance with applicable water quality standards, the County could be required to undertake additional measures.

Onondaga Nation Land Claim. In March 2005, the Onondaga Nation (the “Nation”) filed suit against the County and others over the ownership of land in Onondaga County, parts of which include most of the City of Syracuse and/or lands adjacent to Onondaga Lake (the “Lake”). Pursuant to §10 of the State Law, the State is obliged to provide representation for defendants in Indian land claim actions. Former Governor Pataki appointed the law firm of Goodwin Proctor to represent Onondaga County and its co-defendants in the land claim action, at the expense of the State. In Cayuga Nation of New York v. Pataki, the United States Court of Appeals for the Second Circuit applied the doctrine of laches to dismiss the Cayuga Indian land claim. The United States Supreme Court has declined to certify an appeal from that decision. In August 2006, the State and counsel for Onondaga County and other non-state defendants

A-56 made a motion to dismiss based primarily upon the Cayuga decision and the Onondaga Nation has responded to that motion. The motion was heard in September 2007, and decided in favor of all defendants in 2010. On January 4, 2013 the United States Court of appeals for the Second Circuit affirmed the District Court’s dismissal of the claim. In October 2013, the United States Supreme Court refused to grant the Nation’s Petition for Certiorari, thereby ending the litigation.

CERCLA Claims. Onondaga Lake is a New York State-owned waterway held in trust by the State. In 1989, the State of New York initiated litigation against AlliedSignal, which resulted in a Consent Decree in 1992 pursuant to which AlliedSignal agreed to conduct an extensive remedial investigation of industrial contaminants in Onondaga Lake and portions of the Geddes Brook/Nine Mile Creek system.

In 1994, the Onondaga Lake sediments were listed in the National Priorities List (NPL) as a Superfund Site under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”).

Also, in 1994, AlliedSignal commenced a contribution action against the County contending that the County may be liable for some share of any CERCLA and other response costs, as well as an unspecified percentage of any natural resources damages, which ultimately may be assessed against AlliedSignal. As such, AlliedSignal contended that the County is a potentially responsible party (“PRP”). AlliedSignal merged with Honeywell International, Inc. In 1999 and now operates under the Honeywell name.

On August 6, 2004, pursuant to a settlement, Honeywell agreed to withdraw its lawsuit against the County with prejudice. By its terms, the settlement creates a contingent liability, which requires the County to pay a total sum of $1 million if, and only if, Honeywell spends more than $200 million in mercury-related remediation in Onondaga Lake within twelve years of entry of the settlement. Honeywell has not formally advised the County as to whether such remediation costs have exceeded $200 million.

On July 1, 2005, the State issued a Record of Decision outlining the selected remedies for Onondaga Lake. In September 2005, the NYSDEC notified the County and sixteen other entities that the State and the Environmental Protection Agency (“EPA”) had incurred oversight costs with respect to the Onondaga Lake NPL site in the amount of $16 million. Thereafter, the County and others entered into Tolling Agreements with the NYSDEC, which suspended the running of any applicable statute of limitation pending negotiations. The present tolling agreement runs to June 30, 2015.

In October 2006, the State and Honeywell submitted to the U.S. District Court for the Northern District of New York a proposed Consent Decree, which was approved on January 4, 2007. The Consent Decree requires Honeywell to implement the agreed remediation plan within nine years. Documents accompanying the proposal estimate Honeywell’s cost of implementing the agreed plan for remediation at $451 million.

In early 2007, Honeywell and the State requested that the court extend the time for selection of a remedy for the Geddes Brook/Nine Mile Creek site for an additional two years. On or about November 19, 2008, New York State released a Proposed Remedial Action Plan (“PRAP”) for Operable Unit 1 (OU1) of the Geddes Brook/Nine Mile system, a sub-site of the Onondaga Lake Superfund Site. The PRAP describes OU1 as extending upstream in Nine Mile Creek, from a point approximately 3,000 feet upstream of Onondaga Lake to a point approximately 600 feet upstream of Nine Mile Creek’s confluence with Geddes Brook. OU1 also includes a portion of Geddes Brook from Geddes Brook’s confluence with Nine Mile Creek upstream to Geddes Brook’s confluence with the West Flume, an artificial water body which was part of the Allied complex. In January 2011, New York State and

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Honeywell reached an agreement for the clean-up of areas in and around Geddes Brook and Nine Mile Creek, to be completed by 2014. It appears that Honeywell has substantially complied with this deadline.

On October 31, 2008, the EPA and the NYSDEC served a Demand for Payment letter upon seventeen PRP’s, including the County. The Demand letter addressed to the County identifies the County’s PRP status as related to the Town of Salina Landfill, a sub-site of the Onondaga Lake NPL site. The agencies demand reimbursement of CERCLA-related oversight costs in the amount of $12,498,818.63. The County disclaims liability and has identified a number of defenses. Further, in 2008 the County and Town of Salina arrived at an agreement whereby the Town released the County from all claims with respect to past County activities at the Town of Salina Landfill in exchange for the County accepting leachate from the site. Should the relevant parties reach a negotiated settlement; the County will address with the Town the extent to which the oversight costs are covered by the release and indemnification provision of this agreement.

Settlement negotiations of the EPA and NYSDEC demands are continuing. These negotiations have been complicated by the bankruptcy proceedings instituted by Crucible Specialty Metals and General Motors, two principal PRPs. The County filed claims in these proceedings.

In November 2009, the County filed a claim in the Crucible bankruptcy proceeding, contending, inter alia, that the debtor and the trustee in bankruptcy remain statutorily obligated to provide for the post-closure care and maintenance of the landfill, which obligation must be satisfied from the proceeds of the debtor’s estate. In August 2010, the State and the Crucible Estate in Bankruptcy settled the State’s claim under the Resource Conservation and Recovery Act. Post-closure care costs and the County’s claim were dismissed as duplicative.

By letter dated October 30, 2009, the EPA requested that the County and other alleged PRPs enter into negotiations with the EPA to conduct a Remedial Investigation and Feasibility Study (“RIFS”) of the Lower Ley Creek site, beginning at the Route 11 bridge (a.k.a. Brewerton Road) and ending downstream at Onondaga Lake. Subsequently, the EPA completed the RIFS and, based on the results, issued a Record of Decision on September 30, 2014. The estimated costs for the selected remedy range from $17,662,400 to $25,271,000. By letter received March 3, 2015, EPA requested that the County participate in negotiations with the EPA and other PRPs for the preparation of the remedial design. It is estimated that the remedial design portion of the work will cost between $2 million to $3 million.

The County filed a claim to recover costs that may be incurred as a result of the EPA’s demands in the General Motors Liquidation bankruptcy proceedings. By Agreement, the County’s claim was included within the larger reserve for Federal unsecured claims in an amount of no less than $70 million to address the County’s Lower Ley Creek Claim. In June 2012, the United States and the General Unsecured Creditor trust reached a settlement of $39,103,434 to resolve the claims brought by the United States and the State of New York for an allowed general unsecured claim for both the United States and the State of New York for Lower Ley Creek, of which the allowed general unsecured claim of the United States for oversight costs is $896,556. In its filings in support of the settlement the United States has very preliminarily estimated the cleanup costs for Lower Ley Creek in the neighborhood of $46 million.

The County has been advised by the United States that the United States has received approximately $22 million dollars in the initial distribution. The County is prepared to assert defenses to claims for contribution.

By letter dated March 11, 2010, the EPA advised National Grid of the Agency’s determination to designate National Grid as a PRP with respect to the Onondaga Lake Superfund site due to releases from property formally owned by Niagara Mohawk Power Corp., National Grid’s predecessor in interest, at 600 Hiawatha Boulevard. The EPA alleges that the property is contaminated with hazardous substances generated by Niagara Mohawk in the course of operating a manufactured gas plant. In 2001, the County

A-58 acquired the property from Niagara Mohawk. Therefore, the EPA’s letter advised National Grid and the County that the agency was evaluating whether to list the County as a PRP as well. Pursuant to an agreement between the County and Niagara Mohawk at the time of transfer of the property, the County contends that National Grid, as successor in interest to Niagara Mohawk, retains liability for the site. By letter dated March 25, 2010, the County gave National Grid notice of a potential claim as required by the agreement. According to the PRAP released by New York State in February 2015, National Grid is the only listed PRP.

WASTEBEDS 1-8: Located on the southwest shore of Onondaga Lake, the County acquired Wastebeds 1-6 from the State of New York in the early 1980’s. Wastebeds 7-8 are comprised of the adjoining State Fair parking lots. This site is covered by the terms of the settlement between Onondaga County and Honeywell and as such the County contends that ownership of this site should not generate additional potential liability for the County. It is the County’s position that any liability that the County might otherwise have as the current site owner has been fully addressed in the Stipulated Judgment resolving Honeywell’s contribution action against the County. It is worth noting that in December 2014, NYSDEC issued a Record of Decision approving the remedy for Wastebeds 1-8. The County plans to construct an Amphitheater on Lakeview Point, which is primarily located within Wastebeds 5 and 6. Any construction would take place in conjunction with implementation of the selected remedy.

MURPHY’S ISLAND: This is a site along Onondaga Lake acquired by the County in the early 1980’s for use as park land. The site is now the subject of a RIFS being conducted by Honeywell to determine the extent of CERCLA related contamination and remedial options. In 2011, the Onondaga County Legislature passed a memorializing resolution expressing the desire to enter into discussions with the Onondaga Nation at some point in the future to explore the transfer of the site to the Nation. The Resolution has recently been cited as a basis by the EPA and NYSDEC to request that Honeywell revise a Human Health Risk Assessment to address the site’s potential for use for farming, hunting and gathering. Honeywell has advised the County that it is willing to revise the report, but that its studies of the site have led the company to conclude that no contaminants now present at the site are related to Honeywell’s past industrial operations. However, the NYSDEC has disputed this assertion.

Onondaga County Resource Recovery Agency

In November, 1990 OCRRA assumed responsibility for solid waste management for all of Onondaga County except the Town and Village of Skaneateles. The solid waste management system was to consist of a waste to energy facility, an in-county landfill, an active recycling program and compost sites. Covanta Onondaga LLP was retained to build and operate the facility for twenty years. The Agency executed delivery agreements with all thirty-three member municipalities wherein they agreed to direct waste from their communities to the OCRRA System.

In order to construct and implement the OCRRA WTE facility and purchase System assets, $184 million in bonds were issued in 1992. These bonds were refinanced in 2003 consisting of $82 million in senior lien debt and $30 million in subordinate lien debt. The senior lien debt will be defeased by May, 2015. The subordinate lien debt continued to accrue and would have been the responsibility of the party who receives the income from the WTE facility after May, 2015 and would have been defeased by 2022.

In November, 2014 OCRRA and Covanta entered into an extension of the 1990 Service Agreement under which Covanta will continue to operate the plant and be the beneficial owner for tax purposes while OCRRA retains legal ownership. The Agency will assume responsibility for the subordinate lien bonds, which have accrued with interest to about $43 million and will, in 2015, refinance same. OCRRA will also issue about $15 million in additional revenue bonds to finance capital projects at the WTE facility.

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The OCRRA bonds continue to be secured by the new delivery agreements that the member municipalities recently signed with OCRRA. Both by State legislation and agreement, the County is not liable for OCRRA debts. As an additional means of securing these revenues, OCRRA has secured contracts with major haulers operating in the member municipalities requiring the haulers to deliver waste to OCRRA. These contracts expire at the end of 2015.

Factors Affecting Financings of the State and Municipalities of the State

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WAYNE COUNTY

Introduction

Wayne County (for purposes of the “WAYNE COUNTY” section, the “County”) is located in upstate New York with the County Seat situated in the Village of Lyons. The Village of Lyons will be dissolved as of December 31, 2015 and only the Town of Lyons will exist. With a land area of 621 square miles and an estimated population of 92,051 (2014 U.S. Census), the County is agricultural and residential in nature. Employment opportunities, as well as commercial and professional services are available within the County, mainly in the various incorporated villages. Such opportunities and services are also available to County residents in the Cities of Rochester and Geneva. Various highways serving the County include Interstate #90 and State highways #14, 31, 88 and 104. Air transportation is available through the Monroe County airport near Rochester and Syracuse Hancock International Airport. Gas and electric are provided by RG&E and NYSEG and phone services are provided by Verizon and AT&T. Higher education opportunities are made available through various universities and colleges within an hour drive. Some of the institutions include Rochester Institute of Technology and University of Rochester in Rochester and Syracuse University and Le Moyne College in Syracuse.

Governance

Government of the County is the responsibility of a 15-member Board of Supervisors, who are elected by the residents of each of the towns within the County. One member is selected as Chairman by the members themselves. Thirteen Supervisors are elected to two-year terms and run concurrently and two Supervisors are elected to four-year terms.

Budgeting

The County Administrator acts as Budget Officer and is responsible for the preparation of a proposed annual County budget and its submission to the Finance Committee of the Board of Supervisors prior to November 15th. Within fifteen days of receipt of the proposed budget, the Finance Committee reviews said budget and recommends such alterations as it deems appropriate to the Board of Supervisors. Following a public hearing on the proposed budget, including the alterations as recommended by the Finance Committee, the question of adoption of the proposed budget is placed before the Board of Supervisors for their consideration. The Board of Supervisors is required to adopt a budget no later than December 20th. Expenditure during the fiscal year may only be made pursuant to appropriations from the General Fund or other special purpose funds established by the Board of Supervisors. However, during the fiscal year, the Board of Supervisors, by resolution, may make additional appropriations from any unencumbered balance in appropriations, contingent funds or unanticipated revenues. The County’s 2015 budget resulted in no increase in the property tax levy, which was below the County’s tax levy limit of 2.48%.

Investment Policy

Pursuant to the statutes of the State of New York, the County is permitted to invest only in the following investments: (1) special time deposits or certificates of deposits in a bank or trust company located and authorized to do business in the State of New York; (2) obligations of the United States of America; (3) obligations guaranteed by agencies of the United States of America where the payment of principal and interest is guaranteed by the United States of America; (4) obligations of the State of New York; (5) with the approval of the State Comptroller, tax anticipation notes and revenue anticipation notes issued by any New York municipality or district corporation, other than the County; (6) obligations of a New York public corporation which are made lawful investments by the County pursuant to another provision of law; (7) certain certificates of participation issued on behalf of political subdivisions of the State of New York; and, (8) in the case of County moneys held in certain reserve funds established

A-61 pursuant to law, obligations issued by the County. These statutes further require that all bank deposits, in excess of the amount insured under the Federal Deposit Insurance Act, be secured by either a pledge of eligible securities, an eligible surety bond or an eligible letter of credit, as those terms are defined in the law.

Consistent with the above statutory limitations, it is the County’s current policy to invest in: (1) certificates of deposit or time deposit accounts that are fully secured as required by statute, (2) obligations of New York State, (3) obligations of the United States of America, (4) obligations guaranteed by agencies of the United States of America where the payment of principal and interest is guaranteed by the United States of America, (5) obligations issued pursuant to Local Finance Law §24.00 or 25.00 (with approval of the State Comptroller) by any municipality, school district or district corporation other than the County of Wayne, (6) obligations of public authorities, public housing authorities, urban renewal agencies and industrial development agencies where the general State statutes governing such entities or whose specific enabling legislation authorizes such investments, (7) Certificates of Participation issued pursuant to General Municipal Law §109-b, (8) obligations of this local government, but only with any moneys in a reserve fund established pursuant to General Municipal Law §§6-c, 6-d, 6-e, 6-g, 6-h, 6-j, 6- k, 6-l, 6-m, or 6-n or (9) repurchase agreements which are authorized subject to the following restrictions: all repurchase agreements must be entered into subject to a Master Repurchase Agreement, trading partners are limited to banks or trust companies authorized to do business in New York State and primary reporting dealers, obligations shall be limited to obligations of the United States of America and obligations guaranteed by agencies of the United States of America, no substitution of securities will be allowed and the custodian shall be a party other than the trading partner.

The governing board’s responsibility for administration of the investment program is delegated to the County Treasurer.

Pensions and Other Post-Employment Benefits

The County’s contributions to the employee retirement systems since 2010, the 2015 budgeted and the 2016 proposed amounts are as follows:

Year Amount 2010 $4,252,095 2011 6,110,166 2012 8,023,852 2013 8,733,239 2014 8,641,888 2015 (budgeted) 8,403,513 2016 (proposed) 7,224,267

The County has contracted with an actuarial firm to prepare its post-retirement benefits valuation. Based on the most recent actuarial evaluation and financial data of the County, the following tables shows the components of the County’s annual OPEB cost, the amount actuarially contributed to the plan, changes in the County’s net OPEB obligation and funding status for the fiscal year ending December 31, 2014:

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Actuarial Accrued Liability and Annual OPEB Cost

Annual required contribution (ARC) $3,229,115 Interest on net OPEB obligation 12,701 Adjustment to ARC (22,466) Annual OPEB cost (expense) 3,219,350 Contributions made (3,001,350) Increase (decrease) in net OPEB obligation 218,000 Net OPEB obligation - beginning of year 317,536 Net OPEB obligation - end of year $535,536 Percentage of annual OPEB cost contributed 93.23%

Funding Status: Actuarial Accrued Liability (AAL) $43,255,239 Actuarial Value of Assets 0 Unfunded Actuarial Accrued Liability (UAAL) $43,255,239 Funded Ratio (Assets as a Percentage of AAL) 0%

Top Employers

Listed below are the major industrial and service-related employers in the County and the number of employees:

Approximate Number Name of Employees

IEC Electronics 659 Berry Plastics 610 Garlock Technologies 568 Dr. Pepper/Snapple Group 325 Parker Hannifin Corporation 299 Baldwin/Richardson Foods 290 Marshall Farms 208 Optimax 204 Ultralife, Inc. 180 Maco Bag Corp 165

Source: County Officials

Tax Information

Tax Levy Limitation Law

A-63 within the County, without limitation as to rate or amount, may or may not be subject to statutory limitations, according to the formulas set forth in the Tax Levy Limit Law. The actual effect of the Tax Levy Limit Law would depend upon the interpretation of such law by a court of competent jurisdiction in the event of a legal challenge.

Real Property Tax Rebate

A-64 eligible for this personal income tax credit. The affected jurisdictions include counties, cities (other than any city with a population of one million or more and its counties), towns, villages, school districts (other than the dependent school districts of New York City, Buffalo, Rochester, Syracuse and Yonkers, the latter four of which are indirectly affected by applicability to their respective city) and independent special districts.

Eligible homeowners do not need to do anything to receive the credit. The Tax Department will review eligibility data and calculate the credit for all qualifying taxing jurisdictions. In the fall of each of the program’s three years (2014, 2015, 2016), the department will mail eligible taxpayers a single check that will be the total of the credits for each jurisdiction that is in compliance. Certain additional restrictions on the amount of the personal income tax credit are set forth in Chapter 59 in order for the tax cap to qualify as one which will provide the tax credit benefit to such real property taxpayers. The refundable personal income tax credit amount is increased in the second year if compliance occurs in both taxable years.

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Valuations

Years Ending December 31: 2011 2012 2013 2014 2015

Assessed Valuation $4,532,419,637 $4,625,519,968 $4,630,101,494 $4,661,055,088 $4,681,331,428 New York State Equalization Rate Various Various Various Various Various Full Valuation $4,583,140,584 $4,635,121,907 $4,651,112,583 $4,672,661,814 $4,709,472,875

Tax Rate Per $1,000 (Full)

Years Ending December 31: 2011 2012 2013 2014 2015

$7.65 $7.54 $7.52 $7.97 $8.09

Tax Collection Record (000’s Omitted)

2011 2012 2013 2014 2015

Total Tax Levy (1) $65,397 $66,198 $67,051 $68,127 $68,343 Unpaid End of Fiscal Year 5,084 4,923 4,981 N/A 4,728 % Unpaid 7.9% 7.5% 7.4% N/A 6.7%

(1) Includes County, Town and Special District taxes and re-levies.

Tax Collection Procedure

Real property is assessed for taxation by local assessors in each Town and is placed on the respective tax rolls. There is no County Board of Assessors.

Real property taxes for County purposes are levied together with taxes for town and special district purposes on January 1, and are due within 30 days. These taxes become an enforceable lien on property on January 1. The towns and special districts receive the full amount of their levies annually. The County assures enforcement responsibility for all unpaid taxes in the towns and special districts. Unpaid village and school district taxes are turned over to the County for collection; any such taxes remaining unpaid at year-end are relevied as County taxes in the subsequent year.

After the return of the tax rolls to the County Treasurer on April 1, the following penalties accrue with respect to delinquent taxes: 5% is added to the tax plus an interest charge of 1% per month until tax sales. The County holds its annual tax sale in June for each year’s taxes.

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Constitutional Tax Margin

Computation of Constitutional Tax Margin for fiscal years ending December 31:

2013 2014 2015 Five-Year Average Full $4,553,701,971 $4,605,624,422 $4,650,043,099 Valuation Tax Limit – 1.5% 68,305,530 69,084,366 69,750,646 Add: Exclusions From 2,160,765 739,717 739,031 Limit Total Taxing Power $ 70,466,295 $ 69,824,083 $ 70,487,677 Less Total Levy 35,831,922 36,783,359 37,890,542 Tax Margin $ 34,634,373 $ 33,040,724 $ 32,599,135 % Tax Power Exhausted 49.29% 52.17% 53.26%

Additional Tax Information

Real property subject to County taxes is assessed by the component Towns.

Veterans’ and senior citizens’ exemptions are offered to those who qualify.

The total assessed valuation of the County consists of approximately: residential – 57%; agricultural – 6%, industrial – 3%, public service – 12% and other – 22%.

The total property tax bill of the typical $122,400 market value residential property located in the County is approximately $5,508 including State, County, Town, Village and School District taxes.

Wayne County Sales Tax

Since 2007, sales tax proceeds have been distributed to the jurisdictions by the County, $5,400,000 to the School Districts within the County and in the following amounts:

Year County Share Town Share Village Share 2007 $23,132,017 $4,264,442 $1,444,201 2008 25,186,961 4,591,189 1,526,003 2009 23,347,882 4,326,898 1,442,679 2010 23,976,957 4,427,321 1,448,070 2011 26,335,693 4,837,048 1,516,090 2012 26,680,483 4,912,812 1,503,284 2013 28,123,106 5,139,166 1,565,455 2014 29,021,311 5,279,170 1,605,081 2015 (Budgeted) 28,500,000 5,220,600 1,559,000 2016 (Budgeted) 28,500,000 5,220,600 1,559,000

Outstanding Debt

Years Ending December 31: 2010 2011 2012 2013 2014 Bonds $27,800,000 $26,735,000 $25,350,000 $24,240,000 $23,130,000 Bond Anticipation Notes 0 0 0 0 0 Capital Lease 6,145,000 5,840,000 5,520,000 5,185,000 4,542,410 Total Debt Outstanding $33,945,000 $32,575,000 $30,870,000 $29,425,000 $27,672,410

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Details of Outstanding Indebtedness

The following table sets forth the indebtedness of the County evidenced by bonds and notes as of November 24, 2015:

Amount Type of Indebtedness Maturity Outstanding Bonds 2015-2034 $22,290,000 Bond Anticipation Notes — 0

Total Indebtedness $22,290,000

Debt Statement Summary

Statement of Indebtedness, Debt Limit and Net Debt-Contracting Margin as of November 24, 2015:

Five-Year Average Full Valuation $4,650,301,953 Debt Limit - 7% thereof 325,521,137

Inclusions: Bonds $22,290,000

Exclusions: Appropriations $270,000

Total Net Indebtedness $ 22,020,000 Net Debt-Contracting Margin $303,501,137 The percent of debt contracting power exhausted is 6.76%

Authorized But Unissued Obligations

The County has authorized bonds in the amount of $7,765,000 for an Energy Efficiency Project. The County does not currently expect to issue any of such authorized bonds, other than in its New York County Bonds.

Cash Flow Borrowings

The County has not found it necessary to borrow Revenue Anticipation Notes or Tax Anticipation Notes within the last five fiscal years and does not anticipate issuing either in the foreseeable future.

Capital Leases

Through its governmental funds, the County leases a building from Lyons Community Health Initiatives Corporation for various County departments. The lease agreement has been determined to be a capital lease for accounting purposes under the criteria established by SFAS No. 13 Accounting for Leases. Accordingly, the lease has been recorded as an asset in the General Fixed Assets Account Group at an amount equal to the present value of the minimum lease payments at the inception of the lease. The liability for the capital lease is recorded in the General Long-Term Liabilities Account Group.

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Debt Ratios

The following table sets forth certain ratios relating to the County’s indebtedness as of November 24, 2015:

Percentage Amount of Per of Full Indebtedness Capita(1) Valuation(2)

Gross Direct Indebtedness (3) $22,020,000 $239.22 0.47% Gross Direct Plus Net 46,549,975 505.70 1.00 Overlapping Indebtedness (4)

(1) The County’s 2014 estimated population is 92,051. (See “Population Trends” herein.) (2) The County’s full valuation of taxable real estate for 2015 is $4,672,661,814. (See “Valuations, Rates and Tax Levies” herein.) (3) See “Calculation of Net Direct Indebtedness” herein. (4) The County’s estimated applicable share of net underlying indebtedness is $24,529,975. (See “Overlapping Indebtedness” herein.)

State Aid

The County receives financial assistance from the State. In 2015, budgeted State Aid represents approximately 14.8% of the County’s General Fund revenues. If the State should experience difficulty in borrowing funds in anticipation of the receipt of State taxes in order to pay State aid to municipalities and school districts in the State, including the County, in this year or future years, the County may be affected by a delay in the receipt of State aid until sufficient State taxes have been received by the State to make State aid payments. Additionally, if the State should not adopt its budget in a timely manner, municipalities and school districts in the State, including the County, may be affected by a delay in the payment of State aid.

The State is not constitutionally obligated to maintain or continue State aid to the County. Accordingly, no assurance can be given that present State aid levels will be maintained in the future particularly in light of the difficulties encountered by the State in balancing its budget. State budgetary restrictions which eliminate or substantially reduce State aid could have a material adverse effect upon the County, requiring either a counter-balancing increase in revenues from other sources to the extent available, or a curtailment of expenditures.

State Comptroller’s Fiscal Stress Monitoring System

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APPENDIX B

CERTAIN DEFINITIONS AND SUMMARY OF PRINCIPAL DOCUMENTS

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APPENDIX B CERTAIN DEFINITIONS AND SUMMARY OF PRINCIPAL DOCUMENTS

The following contains brief summaries of certain provisions of the Master Trust Indenture, Supplemental Indenture No. 1 and the Loan Agreements. These summaries do not purport to be complete or definitive and are qualified in their entirety by reference to the Master Trust Indenture, Supplemental Indenture No. 1 and the Loan Agreements, copies of which are on file with the Trustee.

The following also contains certain definitions of certain terms used in the Master Indenture, Supplemental Indenture No. 1 or the Loan Agreements. All capitalized terms used in this Appendix and not defined below shall have the meaning given to such terms in the Official Statement.

CERTAIN DEFINITIONS

“Act” means Sections 66.0301, 66.0303 and 66.0304 of the State of Wisconsin Statutes, as amended.

“Additional Payments” mean each County’s Allocable Portion of: (i) all taxes and assessments of any type or character charged to the Authority affecting the amount available to the Authority from payments to be received under the Loan Agreement or in any way arising due to the transactions contemplated by the Loan Agreement (including taxes and assessments assessed or levied by any public agency or governmental authority of whatsoever character having power to levy taxes or assessments) but excluding franchise taxes based upon the capital and/or income of the Trustee and taxes based upon or measured by the net income of the Trustee; provided, however, that the County shall have the right to protest any such taxes or assessments and to require the Authority or the Trustee, at the County’s expense and otherwise subject to the Loan Agreement, to protest and contest any such taxes or assessments levied upon them and that the County shall have the right to withhold payment of any such taxes or assessments pending disposition of any such protest or contest unless such withholding, protest or contest would adversely affect the rights or interests of the Authority or the Trustee; (ii) the reasonable fees and expenses of such accountants, consultants, attorneys and other experts as may be engaged by the Authority or the Trustee to prepare audits, financial statements, reports, opinions or provide such other services required under this Loan Agreement, the Applicable Supplemental Indenture or the Master Indenture, including, but not limited to, any audit or inquiry by the Internal Revenue Service or any other governmental body; and (iii) the Authority’s annual fee and the reasonable fees and expenses of the Authority or any agent or attorney selected by the Authority to act on its behalf in connection with this Loan Agreement, the Authority Bonds, the Applicable Supplemental Indenture or the Master Indenture, including, without limitation, any and all reasonable expenses incurred in connection with the authorization, issuance, sale and delivery of any such Authority Bonds or in connection with any litigation, investigation, inquiry or other proceeding which may at any time be instituted involving this Loan Agreement, the Authority Bonds, the Applicable Supplemental Indenture or the Master Indenture or any of the other documents contemplated thereby, or in connection with the reasonable supervision or inspection of the County, its properties, assets or operations or otherwise in connection with the administration of this Loan Agreement.

“Allocable Portion” means each Participant’s proportionate share of certain obligations arising under the Applicable Series of Bonds from time to time, particularly with respect to the Applicable Arbitrage Rebate Fund, the Costs of Issuance of such Series of Bonds, and the payment of principal, interest and redemption price of such Series of Bonds as particularly determined by the Applicable Supplemental Indenture.

“Applicable” means (i) with respect to any Supplemental Indenture, the Supplemental Indenture relating to a particular Series of Bonds, (ii) with respect to any Series of Bonds, the Series of Bonds issued under a Supplemental Indenture for a particular Participant or Participants, (iii) with respect to any Loan Agreement and Project, the Loan Agreement entered into by and between a Participant and the Authority for the purposes of financing or refinancing the cost of a Project, (iv) with respect to a Participant, the Participant or Participants for which a Series of Bonds is issued, (v) with respect to any Debt Service Fund, Arbitrage Fund or Cost of Issuance Account, the Fund or Account established in a particular Supplemental Indenture, (vi) with respect to a Credit Facility or Liquidity Facility, the Credit Facility or Liquidity Facility, if any, identified in the Applicable Supplemental Indenture, (vii) with respect to Revenues and Pledged Revenues, the amounts payable to the Authority on account of a Participant, (viii) with respect to Participant Bonds, the Participant Bonds issued and delivered to the

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Authority by a Participant as required by the Loan Agreement, and (ix) with respect to any Sinking Fund Agreement, the Sinking Fund Agreement relating to the Applicable Participant Bonds.

“Arbitrage Rebate Consultant” means the Person designated to serve in such capacity in any Applicable Supplemental Indenture.

“Arbitrage Rebate Fund” means each such fund, if any, so designated, created and established by the Applicable Supplemental Indenture pursuant to the Master Trust Indenture.

“Authority” means the Public Finance Authority, and its successors and assigns.

“Authority Bonds” means the series of bonds of the Authority issued in whole or in part to finance the Loan made under the Loan Agreement, together with any bonds of the Authority issued to refinance such bonds. For purposes of this Appendix B, “Authority Bonds,” “Bond” and “Bonds” are one and the same.

“Authority Documents” means the Master Indenture, the Applicable Supplemental Indenture, the Applicable Loan Agreements, the Applicable Tax Certificate, if any, the Bond Purchase Contract, the Preliminary Official Statement, the Official Statement, the Continuing Disclosure Agreement and the Bonds.

“Authority Indemnified Persons” means, collectively, (i) the Members, (ii) the Sponsors and (iii) each and all of the Authority’s, the Members’ and the Sponsors’ respective past, present and future directors, board members, governing members, trustees, commissioners, elected or appointed officials, officers, employees, authorized signatories, attorneys, contractors, subcontractors, agents and advisers (including counsel, except with respect to indemnification for professional liability claims, and financial advisers) and each of their respective heirs, successors and assigns.

“Authority Resolution” means Resolution No. 15-29A adopted by the Board of Directors of the Authority on June 3, 2015 authorizing the execution and delivery of the Master Indenture and the Supplemental Indenture authorizing the initial Series of Bonds of the Authority pursuant thereto.

“Authorized Newspaper” means The Bond Buyer or any other newspaper of general circulation printed in the English language and customarily published at least once a day for at least five days (other than legal holidays) in each calendar week in the Borough of Manhattan, City and State of New York.

“Authorized Officer” means any officer of the Authority designated by resolution of the Board of Directors of the Authority to act as an Authorized Officer for purposes of any matter under the Indenture and unless specifically directed by the Authority, shall include each Authorized Signatory.

“Authorized Signatory” means any officer, director or other Person designated by resolution of the Authority (whether such resolution is adopted in connection with the issuance of the Applicable Series of Bonds or otherwise) as an ‘Authorized Signatory’ empowered to, among other things, execute and deliver the Authority Documents on behalf of the Authority.

“Basic Debt Service Payment” means all amounts payable pursuant the Applicable Loan Agreement, including in particular interest, principal and redemption premium, if any, payable in respect of the Applicable Participant Bonds.

“Bond” or “Bonds” means any bond or bonds or all the bonds, as the case may be, of the Authority executed, authenticated and delivered in one or more series under the Master Indenture and a Supplemental Indenture in order to provide financial assistance from the proceeds thereof to a Participant, which Bonds may be issued as Taxable Bonds or, if so provided in the applicable Supplemental Indenture, Tax-Exempt Bonds. For purposes of this Appendix B, “Authority Bonds,” “Bond” and “Bonds” are one and the same.

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“Bond Counsel” means any attorney or firm of attorneys appointed by or acceptable to the Authority of nationally-recognized experience in the issuance of obligations the interest on which is excludable from gross income for federal income tax purposes under the Code or in the issuance of other tax-advantaged obligations that provide either a Federal tax credit to the investor with respect to the issuer’s borrowing costs or a refundable Federal tax credit payable directly to the issuer of the obligation or any future similar obligation that provides a Federal subsidy for any portion of the borrowing costs.

“Bond Year” means, for the Series 2015A Bonds, a period of twelve (12) consecutive months beginning June 15 in any calendar year and ending on June 14 of the succeeding calendar year.

“Bondowner,” “Owner of Bonds” or “Owner” or any similar term, when used with reference to a Bond or Bonds, means the registered owner of any Bond.

“Book Entry Bond” means a Bond authorized to be issued to, and issued to and registered in the name of, a Depository directly or indirectly for the beneficial owners thereof.

“Business Day” means a day on which banks located in any of (i) the City of New York, New York, (ii) the city in which the principal office of the Trustee is located and (iii) the city in which the principal office of the Paying Agent is located are not required or authorized to remain closed and on which The New York Stock Exchange, Inc. is not closed.

“Code” means the Internal Revenue Code of 1986, as amended, and the applicable regulations promulgated thereunder.

“Continuing Disclosure Agreement” means the Continuing Disclosure Agreement, dated as of the date of issuance of the Authority Bonds, by and among the Authority, the Trustee and the County.

“Corporate Trust Office” means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of the Master Indenture is located in New York, New York.

“Cost of Issuance” means the items of expense incurred in connection with the authorization, sale and issuance of an Applicable Series of Bonds, which items of expense shall include, but not be limited to, document printing and reproduction costs, filing and recording fees, costs of credit ratings, initial fees and charges of the Trustee or a Depository, legal fees and charges, professional consultants’ fees, fees and charges for execution, transportation and safekeeping of such Bonds, premiums, fees and charges for insurance on Bonds, commitment fees or similar charges of a Remarketing Agent or relating to a Credit Facility or a Liquidity Facility, costs and expenses of refunding such Bonds and other costs, charges and fees, including those of the Authority and its counsel, in connection with the foregoing.

“Cost of Issuance Fund” means the Cost of Issuance Fund established by Section 5.02 of the Master Indenture.

“Costs of the Project” means with respect to an Applicable Project costs and expenses or the refinancing of costs and expenses as determined by the Participant to be necessary in connection with the Project, including, but not limited to, (i) costs and expenses of the acquisition of the title to or other interest in real property, including easements, rights-of-way and licenses, (ii) costs and expenses incurred for labor and materials and payments to contractors, builders and materialmen, for the acquisition, construction, reconstruction, rehabilitation, repair and improvement of such Project, (iii) the cost of surety bonds and insurance of all kinds, including premiums and other charges in connection with obtaining title insurance, that may be required or necessary prior to completion of such Project, which is not paid by a contractor or otherwise provided for, (iv) the costs and expenses for design, test borings, surveys, estimates, plans and specifications and preliminary investigations therefor, and for supervising such Project, (v) costs and expenses required for the acquisition and installation of furnishings, equipment, machinery and apparatus, (vi) all other costs which the

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Applicable Participant shall be required to pay or cause to be paid for the acquisition, construction, reconstruction, rehabilitation, repair, improvement and equipping of such Project, (vii) any sums required to reimburse the Participant for advances made by it for any of the above items or for other costs incurred and for work done by them in connection with such Project (including interest on borrowed money), (viii) interest on the Bonds prior to, during and for a reasonable period after completion of the acquisition, construction, reconstruction, rehabilitation, repair, improvement or equipping of such Project, and (ix) fees, expenses and liabilities of the Authority incurred in connection with the Applicable Project or pursuant to the Master Indenture or to the Applicable Loan Agreement, a Credit Facility, a Liquidity Facility or a Remarketing Agreement.

“County” means each Participant identified in each Applicable Loan Agreement.

“County Bonds” means the bonds or notes issued and delivered by the Applicable County to or upon the order of the Authority, in order to evidence the Applicable County’s obligation to repay the Applicable Loan. For purposes of this Appendix B, “County Bonds” and “Participant Bonds” are one and the same.

“Credit Facility” means a letter of credit, revolving credit agreement, standby purchase agreement, surety bond, insurance policy or similar obligation, arrangement or instrument issued by a bank, insurance company or other financial institution which provides for payment of all or a portion of the principal or redemption price of, and interest on any series of Bonds or provides funds for the purchase of such Bonds or portions thereof.

“Custodial Bank” means a bank selected by the New York State Comptroller’s Office pursuant to each Sinking Fund Agreement.

“Debt Service Fund” means each such fund so designated, created and established by the Applicable Supplemental Indenture pursuant to Section 5.02 of the Master Indenture.

“Defeasance Security” means (a) a Government Obligation of the type described in clauses (i), (ii), (iii) or (iv) of the definition of Government Obligations, (b) Federal Agency Obligations described in clauses (i) or (ii) of the definition of Federal Agency Obligations and (c) an Exempt Obligation, provided such Exempt Obligation (i) is not subject to redemption prior to maturity other than at the option of the owner thereof or as to which irrevocable instructions have been given to the trustee of such Exempt Obligation by the obligor thereof to give due notice of redemption and to call such Exempt Obligation for redemption on the date or dates specified in such instructions and such Exempt Obligation is not otherwise subject to redemption prior to such specified date other than at the option of the owner thereof, (ii) is secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or Government Obligations, which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such Exempt Obligation on the maturity date thereof or the redemption date specified in the irrevocable instructions referred to in clause (i) above, (iii) as to which the principal of and interest on the direct obligations of the United States of America which have been deposited in such fund, along with any cash on deposit in such fund, are sufficient to pay the principal of and interest and redemption premium, if any, on such Exempt Obligation on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in clause (i) above, and (iv) is rated by at least two nationally recognized Rating Agencies in the highest rating category for such Exempt Obligation; provided, however, that (1) such term shall not include any interest in a unit investment trust or mutual fund or (2) any obligation that is subject to redemption prior to maturity other than at the option of the owner thereof.

“Depository” means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York, or its nominee, or any other Person, firm, association or corporation designated in the Supplemental Indenture authorizing a Series of Bonds to serve as securities depository for the Bonds of such Series.

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“Direct Payment” means a credit allowed under the Code with respect to obligations that is payable to the Applicable Participant by the U.S. Treasury in lieu of the federal income tax credit that would otherwise be available to holders of such obligations.

“Eligible Account” means an account that is either (i) maintained with a federal or state chartered depository institution or trust company that has a short-term debt rating of at least “A-2” by S&P (or if no short-term rating, a long-term debt rating of “BBB+” by S&P) or (ii) maintained with the corporate trust department of a federal depository institution or trust company or state chartered depository institution, which, in either case, has corporate trust powers and is acting in its fiduciary capacity.

“Event of Default” means any event of default specified in either Section 11.01 of the Master Indenture or Section 6.1 of the Applicable Loan Agreement.

“Exempt Obligation” means (i) an obligation of any state or territory of the United States of America, any political subdivision of any state or territory of the United States of America, or any agency, authority, public benefit corporation or instrumentality of such state, territory or political subdivision, the interest on which is excludable from gross income under Section 103 of the Code, which is not a “specified private activity bond” within the meaning of Section 57(a)(5) of the Code and which, at the time an investment therein is made or such obligation is deposited in any fund or account under the Master Indenture, is rated, without regard to qualification of such rating by symbols such as “+” or “—” and numerical notation, no lower than the second highest rating category for such obligation by at least two nationally recognized Rating Agencies, (ii) a certificate or other instrument which evidences the beneficial ownership of, or the right to receive all or a portion of the payment of the principal of or interest on any of the foregoing and (iii) a share or interest in a mutual fund, partnership or other fund wholly comprised of any of the foregoing obligations.

“Facility Provider” means the issuer of a Credit Facility or a Liquidity Facility delivered to the Applicable Trustee.

“Federal Agency Obligation” means (i) an obligation issued by any federal agency or instrumentality, (ii) an obligation the principal of and interest on which are fully insured or guaranteed as to payment by a federal agency, (iii) a certificate or other instrument which evidences the beneficial ownership of, or the right to receive all or a portion of the payment of the principal of or interest on any of the foregoing and (iv) a share or interest in a mutual fund, partnership or other fund wholly comprised of any of the foregoing obligations; provided that any obligation referenced in clauses (i) or (ii) shall, at the time an investment therein is made or such obligation is deposited in any fund or account under the Master Indenture, be rated, without regard to qualification of such rating by symbols such as “+” or “—” and numerical notation, no lower than the second highest rating category for such obligation by at least two nationally recognized Rating Agencies.

“Fitch” means Fitch IBCA, Inc., a corporation organized and created under the laws of the State of Delaware and its successors and assigns.

“Government Obligation” means (i) a direct obligation of the United States of America, (ii) an obligation the principal of and interest on which are fully insured or guaranteed as to payment of principal and interest by the United States of America, (iii) an obligation to which the full faith and credit of the United States of America are pledged, (iv) a certificate or other instrument which evidences the beneficial ownership of, or the right to receive all or a portion of the payment of the principal of or interest on any of the foregoing and (v) a share or interest in a mutual fund, partnership or other fund wholly comprised of any of the foregoing obligations.

“Indenture” means collectively the Master Indenture and the Supplemental Indentures, as originally executed or as it may from time to time be supplemented, modified or amended pursuant to the provisions of the Master Indenture.

“Interest Payment Date” means, for the Series 2015A Bonds, June 15 and December 15 of each Bond Year.

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“Investment Agreement” means a repurchase agreement or other agreement for the investment of moneys with a Qualified Financial Institution.

“Joint Exercise Agreement” means the Joint Exercise of Powers Agreement Relating to the Public Finance Authority, dated June 30, 2010 as amended by an Amended and Restated Joint Exercise of Powers Agreement Relating to the Public Finance Authority, dated September 28, 2010 by and among Adams County, Wisconsin, Bayfield County, Wisconsin, Marathon County, Wisconsin, Waupaca County, Wisconsin and the City of Lancaster, Wisconsin, as such agreement may be amended from time to time.

“Loan” means the loan in the Principal Amount made to the County from the proceeds of the Applicable Series of Bonds pursuant to Section 3.1(a) of the Loan Agreement.

“Loan Agreement” means the Loan Agreement between the Authority and an Applicable Participant relating to the Applicable Series of Bonds as amended and supplemented in accordance with its terms from time to time.

“Liquidity Facility” means an irrevocable letter of credit, surety bond, loan agreement, Standby Purchase Agreement, line of credit or other agreement or arrangement issued or extended by a bank, a trust company, a national banking association, an organization subject to registration with the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956 or any successor provisions of law, a federal branch pursuant to the International Banking Act of 1978 or any successor provisions of law, a savings bank, a domestic branch or agency of a foreign bank which branch or agency is duly licensed or authorized to do business under the laws of any state or territory of the United States of America, a savings and loan association, an insurance company or association chartered or organized under the laws of any state of the United States of America, the Government National Mortgage Association or any successor thereto, the Federal National Mortgage Association or any successor thereto, or any other federal agency or instrumentality approved by the Authority, pursuant to which moneys are to be obtained upon the terms and conditions contained therein for the purchase or redemption of Option Bonds tendered for purchase or redemption in accordance with the terms of the Master Indenture and of the Applicable Supplemental Indenture authorizing such Bonds.

“Make-Whole Redemption Price” means the greater of (i) the issue price of the Series 2015A Bonds (but not less than 100% of the principal amount of the Series 2015A Bonds to be redeemed), or (ii) the sum of the present value of the remaining scheduled payments of principal and interest on the Series 2015A Bonds to be redeemed (taking into account any mandatory sinking fund redemptions), not including any portion of those payments of interest accrued and unpaid as of the date on which the Series 2015A Bonds are to be redeemed, discounted to the date on which such Series 2015A Bonds are to be redeemed on a semi-annual basis, assuming a 360-day year consisting of twelve (12) 30-day months, at the Treasury Rate plus 25 basis points, plus, in each case, accrued and unpaid interest on the Series 2015A Bonds to be redeemed on the redemption date. For purposes of determining the Make-Whole Redemption Price, “Treasury Rate” means, with respect to any redemption date for a particular Series 2015A Bond, the yield to maturity as of such redemption date of U.S. Treasury securities with a constant maturity (as compiled and published in the Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days, but not more than 45 calendar days, prior to the redemption date (excluding inflation indexed securities) (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to the maturity date of the Bond to be redeemed, provided, however, that if the period from the redemption date to such maturity date is less than one year, the weekly average yield on actually traded U.S. Treasury securities adjusted to a constant maturity of one year will be used.

“Maximum Interest Rate” means, with respect to any particular Variable Interest Rate Bond, the numerical rate of interest, if any, set forth in the Supplemental Indenture authorizing such Bond, that shall be the maximum rate at which such Bond may bear interest at any time.

“Member” means the parties to the Joint Exercise Agreement and any political subdivision that has been designated in the past, or from time to time in the future is designated, as a member of the Authority pursuant to the Joint Exercise Agreement.

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“Minimum Interest Rate” means, with respect to any particular Variable Interest Rate Bond, a numerical rate of interest, if any, set forth in the Supplemental Indenture authorizing such Bond, that shall be the minimum rate at which such Bonds may bear interest at any time.

“Moody’s” means Moody’s Investors Service, a corporation organized and existing under the laws of the State of Delaware, or its successors and assigns.

“MSRB” means the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934.

“NYSAC” means the New York State Association of Counties.

“Option Bond” means any Bond which by its terms may be tendered by and at the option of the Owner thereof for redemption by the Authority prior to the stated maturity thereof or for purchase thereof, or the maturity of which may be extended by and at the option of the Owner thereof in accordance with the Supplemental Indenture authorizing such Bonds.

“Outstanding” means, when used with reference to Bonds, as of any particular date, the aggregate of all Bonds authenticated and delivered under the Indenture, except: (a) Bonds cancelled by the Trustee or delivered to the Trustee for cancellation at or prior to such date; (b) Bonds for the payment or redemption of which money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent in trust for the owners of such Bonds, provided that if such Bonds are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture, or provision therefor satisfactory to the Trustee has been made; (c) Bonds paid or Bonds deemed to be paid as provided in Section 12.01 of the Master Indenture; and (d) Bonds paid or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered pursuant to Article III or Section 4.06 of the Master Indenture, unless proof satisfactory to the Trustee shall be presented that any such Bond shall be held by a bona fide purchaser (as such term is defined in the Uniform Commercial Code of the State of Wisconsin); provided, however, that in determining whether the owners of the requisite principal amount of Bonds outstanding have given any request, demand, authorization, direction, notice, consent or waiver under the Master Indenture, Bonds owned by or for the account of any Participant shall be disregarded and deemed not to be outstanding, except that in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Trustee knows to be so owned shall be so disregarded. Bonds so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Bonds and that the pledgee is not the Participant and that the pledgee is not holding such Bonds for the account of any Participant.

“Participant” or “Participants” means, with respect to an Applicable Series of Bonds, each or all of the counties of New York for whose benefit the Authority shall have issued all or a portion of such Series and with whom the Authority shall have executed one or more Loan Agreements. For purposes of this Appendix B, “County” and “Participant” are one and the same.

“Participant Bonds” means Qualified Energy Conservation Bonds of the Participants authorized by and afforded certain federal income tax treatment pursuant to the American Recovery and Reinvestment Act of 2009, and issued as full faith and credit obligations pursuant to the provisions of the Local Finance Law of the State of New York to finance or refinance the costs of certain energy efficiency infrastructure projects within the boundaries of each of the Participants. For purposes of this Appendix B, “County Bonds” and “Participant Bonds” are one and the same.

“Participant Loan Payments” means the Basic Debt Service Payment plus any other amounts payable by the Participant pursuant to the Applicable Loan Agreement.

“Participant Sinking Fund Bond” means a bond issued by a Participant pursuant to the provisions of section 22.10 of the Local Finance Law of the State of New York.

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“Paying Agency Office” means the Office of the Trustee maintained in the Borough of Manhattan in The City of New York, at which its corporate trust business shall be administered in such city.

“Paying Agent(s)” means any paying agent(s) for the Bonds and any successor or successors as paying agent appointed pursuant to Section 8.02 of the Master Indenture.

“Permitted Collateral” means (i) Government Obligations described in clauses (i), (ii) or (iii) of the definition of Government Obligations, (ii) Federal Agency Obligations described in clauses (i) or (ii) of the definition of Federal Agency Obligations, (iii) commercial paper that (a) matures within two hundred seventy (270) days after its date of issuance, (b) is rated in the highest short term rating category by at least one nationally recognized Rating Agency and (c) is issued by a domestic corporation whose unsecured senior debt is rated by at least one nationally recognized Rating Agency no lower than in the second highest rating category or (iv) financial guaranty agreements, surety or other similar bonds or other instruments of an insurance company that has an equity capital of at least $125,000,000 and is rated by Bests Insurance Guide or a nationally recognized Rating Agency in the highest rating category.

“Permitted Investments” means any of the following: (i) Government Obligations; (ii) Federal Agency Obligations; (iii) Exempt Obligations; (iv) any bank account that is an Eligible Account; (v) uncollateralized certificates of deposit that are fully insured by the Federal Deposit Insurance Corporation and issued by a banking organization authorized to do business in the State of New York; (vi) collateralized certificates of deposit that are (a) issued by a banking organization authorized to do business in the State of New York that has an equity capital of not less than $125,000,000, whose unsecured senior debt, or debt obligations fully secured by a letter or credit, contract, agreement or surety bond issued by it, are rated by at least one nationally recognized Rating Agency in at least the second highest rating category, and (b) are fully collateralized by Permitted Collateral; and (vii) Investment Agreements that are fully collateralized by Permitted Collateral.

“Person” means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof.

“Pledged Revenues” means the: (i) Applicable Basic Debt Service Payments payable to the Authority by each Participant; (ii) the amounts payable to the Authority from the sinking fund established pursuant to the Applicable Sinking Fund Agreement; and (iii) the right to receive the same and the proceeds thereof and of such right but (iv) shall not include Additional Payments or Direct Payments.

“Projects” means the Applicable Projects financed with the Applicable Series of Bonds, as more fully described in the Loan Agreements.

“Qualified Financial Institution” means any of the following entities that has an equity capital of at least $125,000,000 or whose obligations are unconditionally guaranteed by an affiliate or parent having an equity capital of at least $125,000,000: (i) a securities dealer, the liquidation of which is subject to the Securities Investors Protection Corporation or other similar corporation, and (a) that is on the Federal Reserve Bank of New York list of primary government securities dealers and (b) whose senior unsecured long term debt is at the time an investment with it is made is rated by at least one nationally recognized Rating Agency no lower than in the second highest rating category, or, in the absence of a rating on long term debt, whose short term debt is rated by at least one nationally recognized Rating Agency no lower than in the highest rating category for such short term debt; provided, however, that no short term rating may be utilized to determine whether an entity qualifies under this paragraph as a Qualified Financial Institution if the same would be inconsistent with the rating criteria of any Rating Agency or credit criteria of an entity that provides a Credit Facility or financial guaranty agreement in connection with Outstanding Bonds; (ii) a bank, a trust company, a national banking association, a corporation subject to registration with the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956 or any successor provisions of law, a federal branch pursuant to the International Banking Act of 1978 or any successor provisions of law, a domestic branch or agency of a foreign bank which branch or agency is duly licensed or authorized to do business under the laws of any state or territory of the United States of America, a savings bank, a savings and loan association, an insurance company or association chartered or organized under the laws of the United States of America, any state of the United

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States of America or any foreign nation, whose senior unsecured long term debt is at the time an investment with it is made is rated by at least one nationally recognized Rating Agency no lower than in the second highest rating category, or, in the absence of a rating on long term debt, whose short term debt is rated by at least one nationally recognized Rating Agency no lower than in the highest rating category for such short term debt; provided, however, that no short term rating may be utilized to determine whether an entity qualifies under this paragraph as a Qualified Financial Institution if the same would be inconsistent with the rating criteria of any Rating Agency or credit criteria of an entity that provides a Credit Facility or financial guaranty agreement in connection with Outstanding Bonds; (iii) a corporation affiliated with or which is a subsidiary of any entity described in (i) or (ii) above or which is affiliated with or a subsidiary of a corporation which controls or wholly owns any such entity, whose senior unsecured long term debt is at the time an investment with it is made is rated by at least one nationally recognized Rating Agency no lower than in the second highest rating category, or, in the absence of a rating on long term debt, whose short term debt is rated by at least one nationally recognized Rating Agency no lower than in the highest rating category for such short term debt; provided, however, that no short term rating may be utilized to determine whether an entity qualifies under this paragraph as a Qualified Financial Institution if the same would be inconsistent with the rating criteria of any Rating Agency or credit criteria of an entity that provides a Credit Facility or financial guaranty agreement in connection with Outstanding Bonds. (iv) the Government National Mortgage Association or any successor thereto, the Federal National Mortgage Association or any successor thereto, or any other federal agency or instrumentality; or (v) a corporation whose obligations, including any investments of any moneys held under the Master Indenture purchased from such corporation, are insured by an insurer that meet the applicable rating requirements set forth above.

“Rating Agency” means each of Moody’s, S&P and Fitch, in each case, which has assigned a rating to Outstanding Bonds at the request of the Authority, or their respective successors and assigns.

“Rebate Amount” shall have the meaning ascribed to such term in the Tax Certificate.

“Record Date” means, for the Series 2015A Bonds, the last day (whether or not a Business Day) of the calendar month preceding an Interest Payment Date.

“Redemption Price” when used with respect to a Bond, means the principal amount of such Bond plus the applicable premium, if any, payable upon redemption prior to maturity thereof pursuant to the Master Indenture or to the Applicable Supplemental Indenture.

“Refunding Bonds” means all Bonds, whether issued in one or more Series of Bonds, authenticated and delivered on original issuance pursuant to Section 2.04 of the Master Indenture and any Bonds thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to Article II, Section 4.06 or Section 10.07 of the Master Indenture.

“Registered Owner” means the Person or Persons in whose name or names a particular Bond shall be registered on the Bond Register.

“Remarketing Agent” means the Person appointed by or pursuant to a Supplemental Indenture authorizing the issuance of Option Bonds to remarket such Option Bonds tendered or deemed to have been tendered for purchase in accordance with such Supplemental Indenture relating to such Option Bonds.

“Remarketing Agreement” means, with respect to Option Bonds of a Series, an agreement between the Authority and the Remarketing Agent relating to the remarketing of such Bonds.

“Required Balance Certificate” means the Certificate provided to the Comptroller pursuant to the Sinking Fund Agreement setting forth a schedule of dates on which the County will make Sinking Fund Deposits and the amount required to be on deposit in the Sinking Fund on each such date.

“Revenues” means (i) the Applicable Pledged Revenues; (ii) Additional Payments and (iii) the right to receive the same and the proceeds thereof and of such right but shall not include any Direct Payments received by any Participant.

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“S&P” means Standard & Poor’s Ratings Series, a division of The McGraw-Hill Corporation, or its successors and assigns.

“Securities Depository” means a Registered Owner acting as a central securities depository for a series of Bonds.

“Serial Bonds” means, with respect to Bonds of a Series, the Bonds so designated in an Applicable Supplemental Indenture.

“Series” means all of the Bonds of a particular series authenticated and delivered on original issuance and pursuant to the Master Indenture and a Supplemental Indenture authorizing such Series and identified as such pursuant to such Supplemental Indenture, and any Bonds of such Series thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to Article III or Section 4.06 of the Master Indenture, regardless of variations in maturity, interest rate, sinking fund installments or other provisions.

“Series 2015A Bonds” means the Public Finance Authority Revenue Bonds (New York State Association of Counties Qualified Energy Conservation Bond Financing Program), Series 2015A (Federally Taxable) authorized to be issued pursuant to the Master Indenture and Supplemental Indenture No. 1 in the aggregate principal amount not to exceed $13,400,000.

“Series 2015A Cost of Issuance Fund” means the account so designated, established pursuant to Section 4.01 of Supplemental Indenture No. 1.

“Series 2015A Debt Service Fund” means the fund so designated, established pursuant to Section 4.01 of Supplemental Indenture No. 1.

“Series 2015A Participant” means respectively, the County of Oneida, New York, the County of Onondaga, New York and the County of Wayne, New York, each a Participant in the NYSAC Qualified Energy Conservation Bond Program.

“Sinking Fund Agreement” means the Sinking Fund Agreement by and among an Applicable Participant, the New York State Comptroller’s Office and the Custodial Bank, dated December 16, 2015, established for the Applicable Participant Sinking Fund Bonds in accordance with the requirements of the Local Finance Law of the State of New York;

“Sinking Fund Installment” means, as of any date of calculation, when used with respect to any Bonds of a Series, other than Option Bonds or Variable Interest Rate Bonds, so long as any such Bonds are Outstanding, the amount of money required by the Master Indenture or by the Supplemental Indenture pursuant to which such Bonds were issued, to be paid on a single future June 1 or December 1, or such other date as required by a Supplemental Indenture, for the retirement of any Outstanding Bonds of said Series which mature after said future June 1 or December 1, or such other date as required by a Supplemental Indenture, but does not include any amount payable by the Authority by reason only of the maturity of a Bond, and said future June 1 or December 1, or such other date as required by a Supplemental Indenture, is deemed to be the date when a Sinking Fund Installment is payable and the date of such Sinking Fund Installment and said Outstanding Bonds are deemed to be Bonds entitled to such Sinking Fund Installment, and when used with respect to Option Bonds or Variable Interest Rate Bonds of a Series, so long as such Bonds are Outstanding, the amount of money required by the Supplemental Indenture pursuant to which such Bonds were issued, to be paid on a single future date for the retirement of any Outstanding Bonds of said Series which mature after said future date, but does not include any amount payable by the Authority by reason only of the maturity of a Bond, and said future date is deemed to be the date when a Sinking Fund Installment is payable and the date of such Sinking Fund Installment and said Outstanding Option Bonds or Variable Rate Interest Bonds of such Series are deemed to be Bonds entitled to such Sinking Fund Installment.

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“Sponsor” means the National League of Cities, the National Association of Counties, the Wisconsin Counties Association, the League of Wisconsin Municipalities, and any other Person that holds itself out, or is identified by the Authority, as an organization sponsoring the Authority.

“Standby Purchase Agreement” means an agreement by and between the Authority and another Person or by and among the Authority, one or more Participants and another Person, pursuant to which such Person is obligated to purchase an Option Bond tendered for purchase.

“Supplemental Indenture” means any indenture supplementary to, or amendatory of, the Master Indenture now or thereafter duly executed and delivered in accordance with the provisions of the Master Indenture.

“Taxable Bonds” means any Series of Bonds issued pursuant to the Master Indenture and a Supplemental Indenture, the interest on which is not excludable from the gross income of the Holders thereof for federal income tax purposes.

“Tax Certificate” means the Tax Certificate, if any, concerning certain matters pertaining to the use of proceeds of the Bonds executed by and delivered to the Authority and the Trustee on the date of issuance of the Tax-Exempt Bonds, including any and all exhibits attached thereto.

“Tax-Exempt Bonds” means any Series of Bonds issued pursuant to the Master Indenture and a Supplemental Indenture, the interest on which is excludable from the gross income of the Owners thereof for federal income tax purposes.

“Term Bonds” means, with respect to Bonds of a Series, the Bonds so designated in an Applicable Supplemental Indenture and payable from Sinking Fund Installments.

“Trustee” means The Bank of New York Mellon, a corporation organized and existing under the laws of the State of New York, having its principal office in New York, New York, and a Paying Agency Office in New York, New York, in its capacity as trustee under the Indenture, and its successor or successors as trustee under the Indenture.

“Unassigned Rights” means the rights of the Authority under Sections 3.2, 3.3(b), 3.4(c), and 3.8(3) and (4) of the Applicable Loan Agreement and, to the extent not expressly provided in said sections (or in any other sections hereof or thereof) the Authority’s rights thereunder and under this Indenture and any Supplemental Indenture to (i) inspect books and records; (ii) give or receive notices, approvals, consents, requests, and other communications; (iii) receive payment or reimbursement for expenses, including without limitation “Additional Payments” as defined in the Applicable Loan Agreement and the Authority’s annual fee; (iv) immunity from and limitation of liability; and (v) indemnification by the Participant; and further, to enforce, in its own name and on its own behalf, those provisions hereof and of the Applicable Loan Agreement and any other document, instrument or agreement entered into with respect to the Bonds that provides generally for the foregoing enumerated rights or any similar rights of the Authority. For avoidance of doubt, the “Unassigned Rights” referenced in clauses (iv) and (v), above, shall be interpreted broadly to encompass (but not be limited to) the rights of the Authority Indemnified Persons to immunity from and limitation of liability and indemnification by the Participant as provided in the Applicable Loan Agreement.

“Variable Interest Rate” means the rate or rates of interest to be borne by a Series of Bonds or any one or more maturities within a Series of Bonds which is or may be varied from time to time in accordance with the method of computing such interest rate or rates specified in the Supplemental Indenture authorizing such Bonds, which shall be based on (i) a percentage or percentages or other function of an objectively determinable interest rate or rates (e.g., a prime lending rate) which may be in effect from time to time or at a particular time or times or (ii) a stated interest rate that may be changed from time to time as provided in the Supplemental Indenture authorizing such Bonds; provided, however, that such variable interest rate may be subject to a Maximum Interest Rate and a Minimum Interest Rate and that there may be an initial rate specified, in each case as provided in such Supplemental Indenture; provided, further, that such Supplemental Indenture shall also specify either (x) the particular period or periods of time or manner of determining such period or periods of time for which each

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variable interest rate shall remain in effect or (y) the time or times at which any change in such variable interest rate shall become effective or the manner of determining such time or times.

“Variable Interest Rate Bond” means any Bond which bears a Variable Interest Rate; provided, however, that a Bond the interest rate on which shall have been fixed for the remainder of the term thereof shall no longer be a Variable Interest Rate Bond.

“Verification Agent” means an independent certified public accountant or firm of independent certified public accountants.

SUMMARY OF THE MASTER INDENTURE

Master Indenture, the Supplemental Indentures and the Bonds Constitute Separate Contracts

With respect to each Applicable Series of Bonds, in consideration of the purchase and acceptance of any and all of the Bonds of an Applicable Series authorized to be issued under the Master Indenture and under the Applicable Supplemental Indenture by those who shall hold or own the same from time to time, the Master Indenture and the Applicable Supplemental Indenture shall be deemed to be and shall constitute a contract among the Authority, the Trustee and the Owners from time to time of the Bonds of an Applicable Series, and the pledge and assignment made in the Master Indenture and the covenants and agreements set forth therein to be performed by or on behalf of the Authority shall be for the equal and ratable benefit, protection and security of the Owners of any and all of the Bonds of such Series, all of which, regardless of the time or times of their issue or maturity, shall be of equal rank without preference, priority or distinction of any Bonds of a Series over any other Bonds of such Series except as expressly provided in the Master Indenture or permitted by the Master Indenture or by the Applicable Supplemental Indenture. (Section 1.03)

Liability under Bonds

The Bonds are not an obligation or debt of NYSAC, and except as otherwise provided in the Master Indenture or Applicable Supplemental Indenture with respect to the obligations of each Participant under its own Participant Bonds: (I) the Bonds are special limited obligations of the Authority payable solely from Pledged Revenues and, if any, such other Funds and amounts pledged for their payment pursuant to the Master Indenture and the Applicable Supplemental Indenture, and except from such source, none of the Authority, any Member, any Sponsor, any Authority Indemnified Person, the State of Wisconsin or the State of New York or any political subdivision or agency of either State or any political subdivision approving the issuance of the Bonds shall be obligated to pay the principal of, premium, if any, or interest thereon or any costs incidental thereto; (II) the Bonds do not, directly, indirectly or contingently, obligate in any manner, any Member, the State of Wisconsin or the State of New York or any political subdivision of either State or any political subdivision approving the issuance of the Bonds, to levy any tax or to make any appropriation for payment of the principal of, premium, if any, or interest on the Bonds or any costs incidental thereto; and (III) neither the faith and credit or taxing power of any Member, the State of Wisconsin or the State of New York or any political subdivision of either State or any political subdivision approving the issuance of the Bonds, nor the faith and credit of the Authority or of any Sponsor or Authority Indemnified Person, shall be pledged to the payment of the principal of, premium, if any, or interest on, the Bonds or any costs incidental thereto. The Authority has no taxing power. (Section 1.04)

Waiver of Personal Liability

No Authority Indemnified Person shall be individually or personally liable for the payment of any principal of, premium, if any, or interest on the Bonds or any costs incidental thereto or any sum under the Master Indenture, any Supplemental Indenture, any Loan Agreement or the Bonds or any claim based thereon, or be subject to any personal liability or accountability by reason of the execution and delivery of any of the foregoing. Furthermore, no Authority Indemnified Person shall be individually liable for the breach by the Authority of any representation or covenant contained in the Master Indenture any Supplemental Indenture, any Loan Agreement or the Bonds.

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(Section 1.05)

Non-Liability of Authority

(1) The Authority shall not be obligated to pay the principal of, premium, if any, or interest on any Applicable Series of Bonds or any costs incidental thereto, except from the Applicable Pledged Revenues. The Authority shall not be directly, indirectly, contingently or otherwise liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or in connection with the Master Indenture, any Supplemental Indenture, any Series of Applicable Bonds or any Applicable Loan Agreement, except only to the extent amounts are received for the payment thereof from the Participant under the Applicable Loan Agreement.

(2) The Trustee acknowledges that the Authority’s sole source of moneys to repay the Applicable Series of Bonds will be provided by the Applicable Pledged Revenues, and agrees that if such amounts shall ever prove insufficient to pay all principal of, premium, if any, and interest on the applicable Series Bonds as the same shall become due (whether by maturity, redemption or otherwise) or any costs incidental thereto, then the Trustee shall give notice to the Applicable Participant in accordance with Section 14.11 of the Master Indenture to pay such amounts as are required from time to time to prevent any deficiency or default in the payment of such principal, premium, if any, or interest, or costs incidental thereto including, but not limited to, any deficiency caused by acts, omissions, nonfeasance or malfeasance on the part of the Trustee, the Applicable Participant, the Authority or any third party, subject to any right of reimbursement from the Trustee, the Authority or any such third party, as the case may be; provided however, no Applicable Participant shall be required to pay to the Authority any amounts in excess of the amounts to which it is obligated to the Authority under its Applicable Loan Agreement. (Section 1.06)

Authorization of Bonds

Bonds of the Authority of each Applicable Series are authorized to be issued as provided in the Master Indenture. The Bonds of each Series shall be special obligations of the Authority payable solely from the Pledged Revenues and all funds and accounts (excluding the Applicable Arbitrage Rebate Fund) authorized by the Master Indenture and established by the Applicable Supplemental Indenture, all in the manner more particularly provided in the Master Indenture. The aggregate principal amount of Bonds of a Series which may be executed, authenticated and delivered is not limited except as provided by the Master Indenture and by the Applicable Supplemental Indenture. (Section 2.01)

Additional Obligations

The Authority reserves the right to issue bonds, notes or any other obligations or otherwise incur indebtedness pursuant to other and separate resolutions or agreements of the Authority, so long as such bonds, notes or other obligations are not, or such other indebtedness is not entitled to a charge, lien or right prior or equal to the charge or lien created by the Master Indenture and pursuant to an Applicable Supplemental Indenture, or prior or equal to the rights of the Authority and Owners of an Applicable Series of Bonds provided by the Master Indenture or with respect to the moneys pledged under the Master Indenture or pursuant to an Applicable Supplemental Indenture. (Section 2.05)

Additional Payments

The Trustee, except as otherwise provided in the Applicable Loan Agreement, shall transfer any Additional Payments (as defined in the Applicable Loan Agreement) promptly upon receipt thereof from the Participant, to the Authority at the address specified in the Master Indenture for notice to the Authority or as otherwise directed by the Authority; except that payments of the Authority’s annual fee shall be remitted to the Authority at the times specified in the Applicable Loan Agreement. (Section 2.06)

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Authorization of Redemption

Bonds subject to redemption prior to maturity shall be redeemable, at such times, at such Redemption Prices and upon such terms as may otherwise be specified in the Master Indenture or in the Applicable Supplemental Indenture authorizing such Series. (Section 4.01)

Redemption at the Election or Direction of the Authority

The Authority shall give written notice to the Trustee of its election or direction to redeem, of the Series and of the principal amounts of the Bonds of each maturity of such Series to be redeemed in accordance with the Master Indenture. Such notice shall be given by the Authority at the request of an Applicable Participant on behalf of the Authority to redeem the Allocable Portion of the Applicable Series of Bonds and, upon the delivery of such request by the Applicable Participant to the Trustee, the Authority shall be deemed, without any action on its part, to have given the notice required under this paragraph. The Series, maturities and principal amounts thereof to be redeemed at the election or direction of the Authority shall correspond to the maturities and principal amounts of the Participant Bonds being redeemed by the Applicable Participant making the request, subject to any limitations with respect thereto contained in the Master Indenture or in the Supplemental Indenture authorizing such Series. Such notice shall be given to the Trustee at least sixty (60) days prior to the date on which such Bonds are to be redeemed, or such lesser number of days as shall be acceptable to the Trustee. (Section 4.02)

Selection of Bonds to Be Redeemed

Unless otherwise provided in the Supplemental Indenture authorizing the issuance of Bonds of a Series, in the event of redemption of less than all of the Outstanding Bonds of like Series, maturity and tenor, the Trustee shall assign to each Outstanding Bond of the Series, maturity and tenor to be redeemed a distinctive number for each unit of the principal amount of such Bond equal to the lowest denomination in which the Bonds of such Series are authorized to be issued and shall select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to such Bonds as many numbers as, at such unit amount equal to the lowest denomination in which the Bonds of such Series are authorized to be issued for each number, shall equal the principal amount of such Bonds to be redeemed. In making such selections the Trustee may draw the Bonds by lot (i) individually or (ii) by one or more groups, the grouping for the purpose of such drawing to be by serial numbers (or, in the case of Bonds of a denomination of more than the lowest denomination in which the Bonds of such Series are authorized to be issued, by the numbers assigned thereto as provided in the Master Indenture) which end in the same digit or in the same two digits. In case, upon any drawing by groups, the total principal amount of Bonds drawn shall exceed the amount to be redeemed, the excess may be deducted from any group or groups so drawn in such manner as the Trustee may determine. The Trustee may in its discretion assign numbers to aliquot portions of Bonds and select part of any Bond for redemption. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of each such Bond of a denomination of more than the lowest denomination in which the Bonds of such Series are authorized to be issued shall be redeemed as shall equal the lowest denomination in which the Bonds of such Series are authorized to be issued for each number assigned to it and so selected. (Section 4.04)

Notice of Redemption

Whenever Bonds are to be redeemed, the Trustee shall give notice of the redemption of the Bonds in the name of the Authority. Such notice, unless the Bonds are Book Entry Bonds, shall be given by mailing a copy of such notice not less than thirty (30) days nor more than sixty (60) days prior to the redemption date. Such notice, unless the Bonds are Book Entry Bonds, shall be sent by first class mail, postage prepaid, to the registered owners of the Bonds which are to be redeemed, at their last known addresses, if any, appearing on the registration books not more than ten (10) Business Days prior to the date such notice is given. Upon giving such notice, the Trustee shall promptly certify

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to the Authority that it has mailed or caused to be mailed such notice to the Owners of the Bonds to be redeemed in the manner provided in the Master Indenture. Such certificate shall be conclusive evidence that such notice was given in the manner required by the Master Indenture. The failure of any Owner of a Bond to be redeemed to receive such notice shall not affect the validity of the proceedings for the redemption of the Bonds.

Any notice of redemption, unless moneys shall be received by the Trustee prior to giving such notice sufficient to pay the principal of and premium, if any, and interest on the Bonds to be redeemed, may state that such redemption shall be conditional upon the receipt of such moneys by the Trustee by 11:00 A.M. (New York time) on the date fixed for redemption. If such moneys shall not have been so received said notice shall be of no force and effect, the Authority shall not redeem such Bonds and the Trustee shall give notice, in the manner in which the notice of redemption was given, that such moneys were not so received.

The Trustee shall (i) if any of the Bonds to be redeemed are Book Entry Bonds, electronically mail a copy of the notice of redemption to the Depository for such Book Entry Bonds not less than thirty-five (35) days prior to the redemption, but, if notice of redemption is to be published as aforesaid, in no event later than five (5) Business Days prior to the date of publication, and (ii) mail a copy of the notice of redemption to Kenny Information Systems Notification Service, at 65 Broadway New York, New York 10006, and to Standard & Poor’s Called Bond Record, at 55 Water Street, New York, New York 10041, or in each case at the most recent address therefor, or to any successor thereof. (Section 4.05)

Payment of Redeemed Bonds

If, on the redemption date, moneys for the redemption of all Bonds or portions thereof of any like Series, maturity and tenor to be redeemed, together with interest accrued and unpaid thereon to the redemption date, shall be held by the Trustee and Paying Agents so as to be available therefor on such date and if notice of redemption shall have been mailed as stated in the Master Indenture, then, from and after the redemption date, interest on the Bonds or portions thereof so called for redemption shall cease to accrue and such Bonds shall no longer be considered to be Outstanding under the Master Indenture. If such moneys shall not be so available on the redemption date, such Bonds or portions thereof shall continue to bear interest until paid at the same rate as they would have borne had they not been called for redemption. (Section 4.06)

Pledge of Revenues and Participant Bonds

The proceeds from the sale of an Applicable Series of Bonds, the Applicable Pledged Revenues, the Applicable Participant Bonds, the Applicable Loan Agreements (except for the Unassigned Rights and payments in respect thereof), the Authority’s security interest in the Applicable Pledged Revenues, and all funds authorized by the Master Indenture and established pursuant to an Applicable Supplemental Indenture, other than an Applicable Arbitrage Rebate Fund, are, subject to the execution of an Applicable Supplemental Indenture, pledged and assigned by the Master Indenture to the Trustee as security for the payment of the principal, Sinking Fund Installments, if any, and Redemption Price of and interest on the Applicable Series of Bonds and as security for the performance of any other obligation of the Authority under the Master Indenture and under an Applicable Supplemental Indenture with respect to such Series, all in accordance with the provisions of the Master Indenture and of the Applicable Supplemental Indenture. The pledge made by the Master Indenture, subject to the adoption of an Applicable Supplemental Indenture, shall relate only to the Bonds of an Applicable Series authorized by such Supplemental Indenture and no other Series of Bonds and such pledge shall not secure any such other Series of Bonds. The Bonds of each Applicable Series shall be special obligations of the Authority payable solely from and secured by a pledge of the proceeds from the sale of an Applicable Series of Bonds, the Applicable Pledged Revenues, the Applicable Participant Bonds, the Applicable Loan Agreements (except for the Unassigned Rights and payments in respect thereof), the Authority’s security interest in the Applicable Pledged Revenues, and all funds authorized by the Master Indenture and established pursuant to an Applicable Supplemental Indenture, other than an Applicable Arbitrage Rebate Fund, which pledge shall constitute a first lien thereon. Notwithstanding the foregoing, interest earnings on the Debt Service Fund held by the Trustee and properly allocable to one Participant may not be used to make up a deficiency caused by

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the failure of another Participant to pay its Basic Debt Service Payment. Further notwithstanding the foregoing, the Authority does not pledge, assign or convey to the Trustee the Unassigned Rights or any claims by or payments due to the Authority, against or by any Person, in respect thereof. (Section 5.01)

Establishment of Funds

The following funds are authorized to be established, held and maintained for each Applicable Series by the Trustee under the Applicable Supplemental Indenture separate from any other funds established and maintained pursuant to any other Supplemental Indenture:

Cost of Issuance Fund;

Debt Service Fund; and

Arbitrage Rebate Fund

Accounts and sub-accounts within each of the foregoing funds may from time to time be established in accordance with an Applicable Supplemental Indenture. In addition, an Applicable Supplemental Indenture may provide for the establishment of additional funds. All moneys at any time deposited in any fund created by the Master Indenture, other than the Applicable Arbitrage Rebate Fund, shall be held in trust for the benefit of the Owners of the Applicable Series of Bonds, but shall nevertheless be disbursed, allocated and applied solely in connection with Applicable Series of Bonds for the uses and purposes provided in the Master Indenture. (Section 5.02)

Application of Bond Proceeds and Allocation Thereof

Upon the receipt of proceeds from the sale of a Series of Bonds, the Authority shall apply such proceeds to pay Costs of Issuance and to purchase Participant Bonds, at par, as specified in the Master Indenture and in the Supplemental Indenture authorizing such Series. The proceeds of any Bonds paid to an Applicable Participant shall be applied by each Applicable Participant in accordance with the requirements of the Local Finance Law of the State of New York and all authorizations pursuant to which the Applicable Participant Bonds were issued.

Accrued interest, if any, received upon the delivery of a Series of Bonds shall be deposited in the Debt Service Fund unless all or any portion of such amount is to be otherwise applied as specified in the Supplemental Indenture authorizing such Series. (Section 5.03)

Deposit of Revenues and Allocation Thereof

1. The Applicable Revenues and any other moneys which, by any of the provisions of the Applicable Loan Agreement, are required to be deposited in each Applicable Debt Service Fund, shall upon receipt by the Trustee be deposited to the credit of the Applicable Debt Service Fund. To the extent not required to pay, (a) each Participant’s Allocable Portion of the interest becoming due on Outstanding Bonds of the Applicable Series on the next succeeding Interest Payment Date of such Bonds; (b) each Participant’s Allocable Portion of the amount necessary to pay the principal and Sinking Fund Installments becoming due on the Applicable Series of Outstanding Bonds on each Interest Payment Date; and (c) moneys which are required or have been set aside for the redemption of Bonds of the Applicable Series, moneys in the Applicable Debt Service Fund shall be paid by the Trustee on or before the business day preceding each Interest Payment Date to the Authority, unless otherwise paid, such amounts as are payable to the Authority relating to such Series for: (i) the fees and expenses of the Authority and the Applicable Trustee and Paying Agents, as required by the Master Indenture, (ii) all other expenditures reasonably and necessarily incurred by the Trustee in connection with the financing of the Applicable Project, including expenses incurred by the Trustee to compel full and punctual performance of all the provisions of the Applicable Loan Agreement in accordance with the

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terms thereof, and (iii) any fees of the Authority and any amounts due to the Authority in respect of indemnification provided under the Applicable Loan Agreement upon its written request therefor.

2. After making the payments required by subdivision 1 of Section 5.04 of the Master Indenture, any balance remaining on the immediately succeeding Interest Payment Date shall be paid by the Trustee to each of the respective Applicable Participants in an amount equal to its Allocable Portion of the balance, free and clear of any pledge, lien, encumbrance or security interest created by the Master Indenture or by any of the Loan Agreements or applied by the Trustee as otherwise provided in the Applicable Loan Agreement or in the Applicable Supplemental Indenture; provided that the Trustee shall not pay any of such remaining balance to any Applicable Participant in the event that such Applicable Participant is in default in the payment of its Basic Debt Service. The Trustee shall notify the Authority and the Applicable Participants promptly after making the payments required by the Master Indenture of any balance remaining in the Applicable Debt Service Fund on the immediately succeeding Interest Payment Date. (Section 5.04)

Debt Service Fund

1. The Trustee shall on or before the Business Day preceding each Interest Payment Date pay to itself and any other Paying Agent out of the Applicable Debt Service Fund:

(a) each Participant’s Allocable Portion of the interest due and payable on all Outstanding Bonds of the Applicable Series on such Interest Payment Date; (b) each Participant’s Allocable Portion of the principal amount due and payable on all Outstanding Bonds of the Applicable Series on such Interest Payment Date; and (c) each Participant’s Allocable Portion of the Sinking Fund Installments or other amounts related to a mandatory redemption, if any, due and payable on all Outstanding Bonds of the Applicable Series on such Interest Payment Date.

The amounts paid out pursuant to Section 5.05 of the Master Indenture shall be irrevocably pledged to and applied to such payments.

2. Notwithstanding the provisions of subdivision 1 of Section 5.05 of the Master Indenture, the Authority may, at any time subsequent to the first day of any Bond Year but in no event less than forty-five (45) days prior to the succeeding date on which a Sinking Fund Installment is scheduled to be due, direct the Trustee to purchase, with moneys on deposit in the Applicable Debt Service Fund, at a price not in excess of par plus interest accrued and unpaid to the date of such purchase, Term Bonds of the Applicable Series to be redeemed from such Sinking Fund Installment. Any Term Bond so purchased shall be cancelled upon receipt thereof by the Trustee and evidence of such cancellation shall be given to the Authority. The principal amount of each Term Bond so cancelled shall be credited against the Sinking Fund Installment due on such date; provided, however, that such Term Bond is cancelled by the Trustee prior to the date on which notice of redemption is given.

3. Moneys in the Applicable Debt Service Fund in excess of the amount required to pay the principal and Sinking Fund Installments of Outstanding Bonds of the Applicable Series payable during the next succeeding Bond Year, the interest on Outstanding Bonds of the Applicable Series payable on and prior to the next succeeding Interest Payment Date assuming that a Variable Interest Rate Bonds will bear interest, from and after the next date on which the rate at which such Variable Interest Rate Bond bears interest is to be adjusted, at a rate per annum equal to the rate per annum at which such Bonds then bear interest, plus one percent (1%) per annum, and the purchase price or Redemption Price of Outstanding Bonds theretofore contracted to be purchased or called for redemption, plus accrued interest thereon to the date of purchase or redemption, shall be paid or applied by the Trustee in accordance with the provisions of the Master Indenture or the Applicable Supplemental Indenture (i) to the purchase of Outstanding Bonds of the Applicable Series at purchase prices not exceeding the Redemption Price applicable on the next Interest Payment Date on which such Bonds are redeemable, plus accrued and unpaid interest to such date, at such times, at such purchase prices and in such manner as the Authority shall direct or

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(ii) to the redemption of Bonds of the Applicable Series as provided in Article IV of the Master Indenture, at the Redemption Prices specified in the Applicable Supplemental Indenture authorizing the issuance of the Bonds to be redeemed. (Section 5.05)

Arbitrage Rebate Fund

The Arbitrage Rebate Fund, if established pursuant to the Applicable Supplemental Indenture, shall be maintained by the Trustee as a fund separate from any other fund established and maintained under the Master Indenture. The Trustee shall deposit to the Applicable Arbitrage Rebate Fund any moneys delivered to it by the Applicable Participants for deposit therein and, notwithstanding any other provisions of Article V of the Master Indenture, shall transfer to the Applicable Arbitrage Rebate Fund, in accordance with the directions of the Authority, moneys on deposit in any other funds held by the Trustee under the Master Indenture at such times and in such amounts as shall be set forth in such directions. Within the Arbitrage Rebate Fund, the Trustee shall maintain such accounts as shall be required by the Authority in order to comply with the terms and requirements of the Tax Certificate. All money at any time deposited in the Arbitrage Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement (as defined in the Tax Certificate), for payment to the Treasury Department of the United States of America, and the Authority or the owner of any Bonds shall not have any rights in or claim to such money. All amounts deposited into or on deposit in the Arbitrage Rebate Fund shall be governed by the Master Indenture and by the Tax Certificate (which is incorporated in the Master Indenture by reference). The Trustee shall be deemed conclusively to have complied with the Master Indenture and with such provisions of the Tax Certificate if it follows the directions of the Arbitrage Rebate Consultant including supplying all necessary written information in the manner provided in the Tax Certificate and shall have no liability or responsibility for compliance (except as specifically set forth in the Master Indenture or in the Tax Certificate) or to enforce compliance by the Authority with the terms of the Tax Certificate.

The Trustee shall have no obligation to rebate any amounts required to be rebated pursuant to the Master Indenture, other than from moneys held in the funds and accounts created under the Master Indenture.

The Trustee shall invest all amounts held in the Arbitrage Rebate Fund as provided in written directions of the Arbitrage Rebate Consultant. The Authority, in issuing such directions, shall comply with the restrictions and instructions set forth in the Tax Certificate. Moneys may only be applied from the Arbitrage Rebate Fund as provided under the Master Indenture.

The Trustee, upon the receipt of written instructions and certification of the Rebate Requirement from the Arbitrage Rebate Consultant, shall pay the amount of such Rebate Requirement to the Treasury Department of the United States of America, out of amounts in the Arbitrage Rebate Fund, as so directed.

Notwithstanding any other provisions of the Master Indenture, the obligation to remit the Rebate Requirement to the United States of America and to comply with all other requirements of the Master Indenture concerning the Arbitrage Rebate Fund and the Tax Certificate shall survive the defeasance or payment in full of the Bonds.

Because the Authority is issuing the Bonds on behalf of the Participants and is serving solely as a conduit issuer of the Bonds, the Participants agree to engage an Arbitrage Rebate Consultant and to assume exclusive responsibility for complying with the Rebate Requirement and each Participant acknowledges that its obligations in this regard are absolute and unconditional. (Section 5.06)

Application of Moneys in Certain Funds for Retirement of Bonds

Notwithstanding any other provisions of the Master Indenture, if at any time the amounts held in the Applicable Debt Service Fund are sufficient to pay the principal or Redemption Price of all Outstanding Bonds of the

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Applicable Series and the interest accrued and unpaid and to accrue on such Bonds to the next date of redemption when all such Bonds are redeemable. or to make provision pursuant to the section of the Master Indenture described below under the heading “Defeasance” for the payment of the Outstanding Bonds at the maturity or redemption dates thereof, the Authority may (i) direct the Trustee to redeem all such Outstanding Bonds, whereupon the Trustee shall proceed to redeem or provide for the redemption of such Outstanding Bonds in the manner provided for redemption of such Bonds by the Master Indenture and by each Applicable Supplemental Indenture as provided in the Master Indenture, or (ii) give the Trustee irrevocable instructions and make provision for the payment of the Outstanding Bonds at the maturity or redemption dates thereof in accordance with the Master Indenture. Such direction or instructions shall, on behalf of the Authority, be given by all Applicable Participant(s) having Participant Bonds then outstanding and, upon the delivery of such notice by all such Applicable Participant(s) to the Authority and the Trustee, shall be deemed, without any action on its part, to have given the direction or instructions described in the Master Indenture. (Section 5.07)

Transfer of Investments

Whenever moneys in any fund or account established under an Applicable Supplemental Indenture are to be paid in accordance with the Master Indenture to another such fund or account, such payment may be made, in whole or in part, by transferring to such other fund or account investments held as part of the fund or account from which such payment is to be made, whose value, together with the moneys, if any, to be transferred, is at least equal to the amount of the payment then to be made; provided, however, that no such transfer of investments would result in a violation of any investment standard or guideline applicable to such fund. (Section 5.08)

Security for Deposits

All moneys held under the Master Indenture by the Trustee shall be continuously and fully secured, for the benefit of the Authority and the Owners of the Applicable Series of Bonds, by direct obligations of the United States of America or obligations the principal of and interest on which are guaranteed by the United States of America of a market value equal at all times to the amount of the deposit so held by the Trustee; provided, however, (a) that if the securing of such moneys is not permitted by applicable law, then in such other manner as may then be required or permitted by applicable state or federal laws and regulations regarding the security for, or granting a preference in the case of, the deposit of trust funds, and (b) that it shall not be necessary for the Trustee or any Paying Agent to give security for the deposit of any moneys with them pursuant to the Master Indenture and held in trust for the payment of the principal, Sinking Fund Installments, if any, or Redemption Price of or interest on any Bonds, or for the Trustee to give security for any moneys which shall be represented by obligations purchased or other investments made under the provisions of the Master Indenture as an investment of such moneys. (Section 6.01)

Investment of Funds and Accounts Held by the Trustee

Moneys held under the Master Indenture by the Trustee, if permitted by law, shall, as nearly as may be practicable, be invested by the Trustee, in accordance with the Applicable Supplemental Indenture, in an Eligible Account, Government Obligations, Federal Agency Obligations, Exempt Obligations, and, if not inconsistent with the investment guidelines of a Facility Provider or a Rating Agency applicable to funds held under the Master Indenture, any other Permitted Investment; provided, however, that each such investment shall permit the moneys so deposited or invested to be available for use at the times at which the Trustee determines such moneys will be required for the purposes of the Master Indenture; provided, further, that (i) any Permitted Collateral required to secure any Permitted Investment shall have a market value, determined by the Trustee or its agent periodically, but no less frequently than weekly, at least equal to the amount deposited or invested including interest accrued thereon, (ii) the Permitted Collateral shall be deposited with and held by the Trustee or an agent of the Trustee and (iii) the Permitted Collateral shall be free and clear of claims of any other person.

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Permitted Investments purchased as an investment of moneys in any fund or account held by the Trustee under the provisions of the Master Indenture shall be deemed at all times to be a part of such fund or account and the income or interest earned, profits realized or losses suffered by a fund or account due to the investment thereof shall be retained in, credited or charged, as the case may be, to such fund or account.

In computing the amount in any fund or account held by the Trustee under the provisions of the Master Indenture, each Permitted Investment shall be valued at par or the market value thereof, plus accrued interest, whichever is lower. (Section 6.02)

Liability for Investments

Neither the Authority nor the Trustee shall have any liability arising out of or in connection with the making of any investment authorized by the provisions of the Master Indenture, in the manner provided therein, for any depreciation in value of any such investment, or for any loss, direct or indirect, resulting from any such investment. (Section 6.03)

Payment of Principal and Interest

The Authority covenants that it shall pay or cause to be paid the principal, Sinking Fund Installments, if any, or Redemption Price of and interest on every Bond of each Series on the date and at the places and in the manner provided in the Bonds according to the true intent and meaning thereof. (Section 7.01)

Powers as to Bonds of an Applicable Series and Pledge

The Authority is duly authorized under the Act and all applicable laws to create and issue the Bonds of each Applicable Series, to execute the Master Indenture and each Applicable Supplemental Indenture and to pledge and assign the proceeds from the sale of such Bonds, the Applicable Revenues, the Applicable Bonds, the Applicable Loan Agreements and all funds established by the Master Indenture which are pledged by the Master Indenture, in the manner and to the extent provided in the Master Indenture and in the Applicable Supplemental Indenture. The Bonds of each Applicable Series and the provisions of the Master Indenture and of each Applicable Supplemental Indenture are and shall be the valid and legally enforceable obligations of the Authority in accordance with their terms and the terms of the Master Indenture and of each Applicable Supplemental Indenture. The Authority shall at all times, to the extent permitted by law, at the Participant’s sole expense and subject to the provisions of the Master Indenture, defend, preserve and protect the pledge of the Applicable Revenues and all funds established by the Master Indenture which are pledged by the Master Indenture and by the Applicable Supplemental Indenture and all of the rights of the Owners of the Applicable Series of Bonds under the Master Indenture and the Applicable Supplemental Indenture against all claims and demands of all persons whomsoever. (Section 7.03)

Further Assurance

Subject to the section of the Master Indenture described below under the heading “Authority’s Performance”, the Authority, at any and all times, shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver all and every such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring, conveying, granting, assigning and confirming all and singular the rights, and the pledges made by the Master Indenture and pursuant to Applicable Supplemental Indenture or intended so to be, or which the Authority may thereafter become bound to pledge or assign. (Section 7.04)

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Accounts and Audits

The Authority shall keep proper books of records and accounts (separate from all other records and accounts), which shall be kept on behalf of the Authority by the Trustee, in which complete and correct entries shall be made of its transactions relating to each Applicable Series of Bonds, which books and accounts, at reasonable hours and subject to the reasonable rules and requirements of the Trustee, shall be subject to the inspection of the Applicable Participants, the Trustee or of any Owner of a Bond of the Applicable Series or his, her or its representative duly authorized in writing. The Trustee shall annually prepare a report which shall be furnished to the Authority, each Facility Provider, each Credit Facility Issuer and the Applicable Participants. Such report shall include at least: a statement of all funds and accounts (including investments thereof) held by such Trustee pursuant to the provisions of the Master Indenture and of each Applicable Supplemental Indenture; a statement of the Applicable Revenues collected from each Applicable Participant in connection with the Master Indenture and with each Applicable Supplemental Indenture; and complete and correct entries of all transactions relating to an Applicable Supplemental Indenture. (Section 7.05)

Creation of Liens

Except as permitted by the Master Indenture the Authority shall not knowingly create or knowingly cause to be created any lien or charge prior or equal to that of the Bonds of an Applicable Series on the proceeds from the sale of such Bonds, the Applicable Revenues, the Applicable Pledged Revenues or the funds and accounts established by the Master Indenture and pursuant to the Applicable Supplemental Indenture which are pledged by the Master Indenture. (Section 7.06)

Offices for Payment and Registration of Bonds

The Trustee shall at all times maintain an office or agency in the State of New York where Bonds may be presented for payment. The Authority may, pursuant to a Supplemental Indenture or pursuant to an indenture adopted in accordance with the Master Indenture, designate an additional Paying Agent or Paying Agents where Bonds of the Series authorized thereby or referred to therein may be presented for payment. The Bonds may be presented for registration, transfer or exchange at the Corporate Trust Office. (Section 7.07)

Amendment, Change, Modification or Waiver of Loan Agreement and Bonds

An Applicable Loan Agreement (and the related Applicable Bonds) may not be amended, changed, modified, altered or terminated so as to materially adversely affect the interest of the Owners of the Outstanding Bonds of the Applicable Series; provided, however, that if such modification or amendment will, by its terms, not take effect so long as any Bonds of any Applicable Series remain Outstanding, the consent of the Owners of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Outstanding Bonds of the Applicable Series under the Master Indenture; provided, further, that no such amendment, change, modification, alteration or termination will reduce the percentage of the aggregate principal amount of Outstanding Bonds of such Series the consent of the Owners of which is a requirement for any such amendment, change, modification, alteration or termination, or decrease the amount of any payment required to be made by the Participant under the Applicable Loan Agreement that is to be deposited with the Trustee or extend the time of payment thereof. Except as otherwise provided in the Master Indenture, a Loan Agreement may be amended, changed, modified or altered without the consent of the Owners of Outstanding Bonds of the Applicable Series or the Applicable Trustee. Specifically, and without limiting the generality of the foregoing, a Loan Agreement may be amended, changed, modified or altered without the consent of the Trustee and the Owners of Outstanding Bonds of such Series (i) to provide changes in connection with the acquisition, construction, reconstruction, rehabilitation, renovation and improvement or otherwise, the providing, furnishing and equipping of any facilities constituting a part of the Applicable Project or which may be added to such Project; (ii) to provide for the issuance of Bonds of an Applicable

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Series; or (iii) to cure any ambiguity or correct or supplement any provisions contained in the Applicable Loan Agreement, which may be defective or inconsistent with any other provisions contained in the Master Indenture or in such Loan Agreement.

The Trustee shall be entitled to rely upon an opinion of counsel, including an opinion of Bond Counsel, which counsel shall be satisfactory to the Trustee, with respect to whether any amendment, change, modification or alteration adversely affects the interests of any Owners of Bonds of the Applicable Series then Outstanding in any material respect. (Section 7.08)

Notice as to Agreement Default

The Authority shall notify the Applicable Trustee in writing that an “Event of Default” under the Applicable Loan Agreement, as such term is defined in the Applicable Loan Agreement (including the failure to pay the Applicable Bonds), has occurred and is continuing, or that which notice shall be given within five (5) days after the Authority has obtained actual (and not implied, imputed or constructive) knowledge thereof, provided, however, that the Authority shall not be liable for any failure to or delay in providing such notice. (Section 7.09)

Basic Debt Service Payment

The Applicable Loan Agreement shall provide for the payment of Basic Debt Service Payment which shall be sufficient at all times to pay the Participant’s Allocable Portion of the principal and Sinking Fund Installments of and interest on Outstanding Bonds of the Applicable Series as the same become due and payable. (Section 7.10)

General

Upon the date of issuance of a Series of Bonds, all conditions, acts and things required by the laws of the State of Wisconsin, including particularly the Act, and by the Master Indenture to exist, to have happened and to have been performed precedent to and in the issuance of such Bonds, shall exist, have happened and have been performed and the issuance of such Bonds, together with all other indebtedness of the Authority, shall be within every debt and other limit prescribed by the laws of the State of Wisconsin. (Section 7.12)

Modification and Amendment of Supplemental Indentures without Consent

Notwithstanding any other provisions of the Master Indenture, the Authority may amend the Master Indenture at any time or from time to time for any one or more of the following purposes, and any such amendment shall become effective in accordance with its terms upon the filing with the Trustee of a copy thereof certified by an Authorized Officer of the Authority:

(a) In connection with the execution and delivery of a Supplemental Indenture authorizing the issuance of additional Bonds as provided in Article 2 of the Master Indenture (b) To add additional covenants and agreements of the Authority for the purpose of further securing the payment of the Bonds of an Applicable Series, provided such additional covenants and agreements are not contrary to or inconsistent with the covenants and agreements of the Authority contained in the Master Indenture; (c) To prescribe further limitations and restrictions upon the issuance of Bonds of an Applicable Series and the incurring of indebtedness by the Authority which are not contrary to or inconsistent with the limitations and restrictions thereon theretofore in effect;

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(d) To surrender any right, power or privilege reserved to or conferred upon the Authority by the terms of the Master Indenture, provided that the surrender of such right, power or privilege is not contrary to or inconsistent with the covenants and agreements of the Authority contained in the Master Indenture; (e) To confirm, as further assurance, any pledge under the Master Indenture or under the Applicable Supplemental Indenture, and the subjection to any lien, claim or pledge created or to be created by the provisions of the Master Indenture, of the Applicable Revenues, or any pledge of any other moneys, investments thereof or funds; (f) To modify any of the provisions of the Master Indenture or of any previously adopted Supplemental Indentures in any other respects, provided that such modifications shall not be effective until after all Bonds of an Applicable Series of Bonds Outstanding as of the date of adoption of such Supplemental Indenture shall cease to be Outstanding, and all Bonds of an Applicable Series issued under an Applicable Supplemental Indenture shall contain a specific reference to the modifications contained in such subsequent resolutions; or (g) With the consent of the Trustee, to cure any ambiguity or defect or inconsistent provision in the Master Indenture or to insert such provisions clarifying matters or questions arising under the Master Indenture as are necessary or desirable, provided that any such modifications are not contrary to or inconsistent with the Master Indenture as theretofore in effect, or to modify any of the provisions of the Master Indenture or of any previously adopted Applicable Supplemental Indenture in any other respect, provided that such modification shall not adversely affect the interests of the Bondowners of the Applicable Series in any material respect. (Section 9.02)

Supplemental Indentures Effective with Consent of Bondowners

The provisions of the Master Indenture and of an Applicable Supplemental Indenture may also be modified or amended at any time or from time to time by a Supplemental Indenture, subject to the consent of the Applicable Bondowners in accordance with and subject to the provisions of the Master Indenture, such Supplemental Indenture to become effective upon the filing with the Trustee of a copy thereof certified by an Authorized Officer of the Authority. (Section 9.03)

General Provisions Relating to Supplemental Indentures

The Master Indenture shall not be modified or amended in any respect except in accordance with and subject to the provisions of the Master Indenture. Nothing contained in the Master Indenture shall affect or limit the rights or obligations of the Authority to adopt, make, do, execute or deliver any resolution, act or other instrument pursuant to the provisions of the Master Indenture or the right or obligation of the Authority to execute and deliver to the Trustee or any Paying Agent any instrument elsewhere in the Master Indenture provided or permitted to be delivered to the Trustee or any Paying Agent.

A copy of every Applicable Supplemental Indenture adopted by the Authority, when filed by the Trustee, shall be accompanied by an opinion of Bond Counsel stating that such Supplemental Indenture has been duly and lawfully adopted in accordance with the provisions of the Master Indenture, is authorized or permitted by the Master Indenture and is valid and binding upon the Authority and enforceable in accordance with its terms and if applicable, such opinion shall further comply with the requirements of Master Indenture.

The Trustee is authorized by the Master Indenture to accept delivery of a certified copy of any Supplemental Indenture permitted or authorized pursuant to the provisions of the Master Indenture and to make all further agreements and stipulations which may be contained therein, and, in taking such action, the Trustee shall be fully protected in relying on the opinion of Bond Counsel that such Supplemental Indenture is authorized or permitted by the provisions of the Master Indenture.

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No Supplemental Indenture changing, amending or modifying any of the rights or obligations of the Trustee or of any Paying Agent shall become effective without the written consent of the Trustee or Paying Agent affected thereby. (Section 9.04)

Powers of Amendment of Master Indenture

Any modification or amendment of the Master Indenture and of the rights and obligations of the Authority which shall affect an Applicable Series of Bonds and of the Owners of the such Applicable Series of Bonds under the Master Indenture, in any particular, may be made by a Supplemental Indenture, with the written consent given as provided in the section of the Master Indenture described below under the heading “Consent of Bondholders,” (i) of the Owners of at least a majority in principal amount of the Bonds of such Series Outstanding at the time such consent is given, or (ii) in case the modification or amendment changes the amount or date of any Sinking Fund Installment, of the Owners of at least a majority in principal amount of the Bonds of the Applicable Series, maturity and interest rate entitled to such Sinking Fund Installment, Outstanding at the time such consent is given; provided, however, that if such modification or amendment will, by its terms, not take effect so long as any Bonds of any specified like Series, maturity and tenor remain Outstanding, the consent of the Owners of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Outstanding Bonds under this Section. No such modification or amendment shall permit a change in the terms of redemption or maturity of the principal of any Outstanding Bond or of any installment of interest thereon or a reduction in the principal amount or the Redemption Price thereof or in the rate of interest thereon without the consent of the Owner of such Bond, or shall reduce the percentages or otherwise affect the classes of Bonds the consent of the Owners of which is required to effect any such modification or amendment. (Section 10.01)

Consent of Bondowners

The Authority may at any time execute a Supplemental Indenture making a modification or amendment permitted by the provisions of the Master Indenture to take effect when and as provided in the Master Indenture. A copy of such Supplemental Indenture (or brief summary thereof or reference thereto in form approved by the Trustee) together with a request to the Bondowners for their consent thereto in form satisfactory to the Trustee, shall promptly after adoption be mailed by the Authority to the Bondowner (but failure to mail such copy and request to any particular Bondowner shall not affect the validity of the Supplemental Indenture when consented to as provided in the master Indenture). Such Supplemental Indenture shall not be effective unless and until (i) there shall have been filed by the Trustee (a) the written consent of the Owners of the percentages of Outstanding Bonds specified in the section of the Master Indenture described below under the heading “Powers of Amendment of Master Indenture” and (b) an opinion of Bond Counsel stating that such Supplemental Indenture has been duly and lawfully executed in accordance with the provisions of the Master Indenture, is authorized or permitted by the Master Indenture, and is valid and binding upon the Authority and enforceable in accordance with its terms, and (ii) a notice shall have been mailed as provided in this paragraph. Each such consent shall be effective only if accompanied by proof of the holding or owning at the date of such consent, of the Bonds with respect to which such consent is given, which proof shall be such as is permitted by the Master Indenture. A certificate or certificates by the Trustee filed by the Trustee that it has examined such proof and that such proof is sufficient in accordance with the Master Indenture shall be conclusive proof that the consents have been given by the Owners of the Bonds described in the certificate or certificates of the Trustee. Any consent given by a Bondowner shall be binding upon the Bondowner giving such consent and, anything in the Master Indenture to the contrary notwithstanding, upon any subsequent Owner of such Bond and of any Bonds issued in exchange therefor (whether or not such subsequent Owner thereof has notice thereof), unless such consent is revoked in writing by the Bondowner giving such consent or a subsequent Owner thereof by filing such revocation with the Trustee, prior to the time when the written statement of the Trustee is filed. The fact that consent has not been revoked may likewise be proved by a certificate of the Trustee filed with the Trustee to the effect that no revocation thereof is on file by the Trustee. At any time after the Owners of the required percentages of Bonds shall have filed their consents to the Supplemental Indenture, the Trustee shall make and file with the Authority and the Trustee a written statement that such Owners of such required percentages of Bonds have filed such consents. Such written statement shall be conclusive that such consents have been so filed. At any time thereafter notice, stating in substance that the

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Supplemental Indenture (which may be referred to as a Supplemental Indenture adopted by the Authority on a stated date, a copy of which is on file with the Trustee) has been consented to by the Owners of the required percentages of Bonds and will be effective as provided in this paragraph, shall be given to the Bondowners by the Authority by mailing such notice to the Bondowners and by publishing the same at least once not more than ninety (90) days after the Owners of the required percentages of Bonds shall have filed their consents to the Supplemental Indenture and the written statement of the Trustee provided for above is filed (but failure to publish such notice shall not prevent such Supplemental Indenture from becoming effective and binding as in this paragraph provided). A transcript, consisting of the papers required or permitted by this paragraph to be filed by the Trustee, shall be proof of the matters therein stated. Such Supplemental Indenture making such amendment or modification shall be deemed conclusively binding upon the Authority, the Trustee, each Paying Agent and the Owners of all Bonds upon the filing with the Trustee of proof of the mailing of such notice or at the expiration of thirty (30) days after the filing with the Trustee of the proof of the first publication of such last mentioned notice, if such notice is published, except in the event of a final decree of a court of competent jurisdiction setting aside such Supplemental Indenture in a legal action or equitable proceeding for such purpose commenced within such thirty (30) day period; provided, however, that the Authority, the Trustee and any Paying Agent during such thirty (30) day period and any such further period during which any such action or proceeding may be pending shall be entitled in their reasonable discretion to take such action, or to refrain from taking such action, with respect to such Supplemental Indenture as they may deem expedient.

For the purposes of the Master Indenture, the purchasers of the Bonds of a Series, whether purchasing as underwriters, for resale or otherwise, upon such purchase from the Authority, may consent to a modification or amendment permitted by the Master Indenture in the manner provided therein, except that no proof of ownership shall be required, and with the same effect as a consent given by the Owner of such Bonds; provided, however, that, if such consent is given by a purchaser who is purchasing as an underwriter or for resale, the nature of the modification or amendment and the provisions for the purchaser consenting thereto shall be described in the official statement, prospectus, offering memorandum or other offering document prepared in connection with the primary offering of the Bonds of such Series. (Section 10.02)

Modifications by Unanimous Consent

The terms and provisions of the Master Indenture and the rights and obligations of the Authority and of the Owners of the Bonds of an Applicable Series may be modified or amended in any respect upon the execution and filing with the Trustee by the Authority of a copy of a Supplemental Indenture certified by an Authorized Officer of the Authority and the consent of the Owners of all of the Applicable Bonds then Outstanding, such consent to be given as provided in the Master Indenture, except that no notice to the Bondowners either by mailing or publication shall be required. (Section 10.03)

Consent of Facility Provider

Whenever by the terms of the Master Indenture the consent of any of the Owners of the Bonds to a modification or amendment of the Master Indenture made by a Supplemental Indenture is required, such modification or amendment shall not become effective until the written consent of each Applicable Facility Provider has been obtained; provided, however, that the consent of a Facility Provider which has provided a Credit Facility or a Liquidity Facility shall not be required unless the modification or amendment requires the consent of the Owners of any percentage in principal amount of Outstanding Bonds or of the Owners of any percentage in principal amount of the Bonds of the Series in connection with which such Credit Facility or Liquidity Facility was provided. No modification or amendment of the Master Indenture which adversely affects a Facility Provider shall be made without the written consent thereto of the Facility Provider affected thereby. Notice of the execution of any such Supplemental Indenture and of the effectiveness of the modification or amendment made thereby shall be given to each Facility Provider by mail at the times and in the manner provided in the Master Indenture with respect to notices thereof required to be given to the Owners of the Bonds. Notice thereof shall also be given to the Rating Agency as soon as practical after execution of such Supplemental Indenture and of the effectiveness thereof. (Section 10.04)

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Events of Default

An Event of Default shall exist under the Master Indenture and under an Applicable Supplemental Indenture if:

(a) With respect to an Applicable Series of Bonds, payment of the principal, Sinking Fund Installments or Redemption Price of any such Bond shall not be made when the same shall become due and payable, either at maturity or upon redemption or otherwise; or

(b) With respect to an Applicable Series of Bonds, payment of an installment of interest on any such Bond shall not be made when the same shall become due and payable; or

(c) With respect to an Applicable Series of Bonds, any “Event of Default” as provided in the Applicable Supplemental Indenture; or

(d) With respect to an Applicable Series of Bonds, the Authority shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Master Indenture or in the Bonds of the Applicable Series or in the Applicable Supplemental Indenture on the part of the Authority to be performed and such default shall continue for thirty (30) days after written notice specifying such default and requiring same to be remedied shall have been given to the Authority by the Trustee, which may give such notice in its discretion and shall give such notice at the written request of the Owners of not less than twenty-five per centum (25%) in principal amount of such Outstanding Bonds, unless, if such default is not capable of being cured within thirty (30) days, the Authority has commenced to cure such default within said thirty (30) days and diligently prosecutes the cure thereof; or

An Event of Default under the Master Indenture in respect of an Applicable Series of Bonds shall not in and of itself be or constitute an Event of Default in respect of any other Applicable Series of Bonds. The Bonds are not subject to acceleration upon an event of default under the Master Indenture. (Sections 11.01 and 11.02)

Enforcement of Remedies

Upon the happening and continuance of any event of default specified in Section 11.01 of the Master Indenture, then and in every such case, the Trustee may proceed, and upon the written request of the Applicable Facility Provider or the Owners of not less than twenty-five per centum (25%) in principal amount of the Outstanding Bonds of the Applicable Series shall proceed (in either case with the written consent of the Facility Provider for such Series) or, in the case of a happening and continuance of an event of default specified in paragraph (c) of the section of the Master Indenture described above under the heading “Events of Default,” upon the written request of the Applicable Facility Provider or the Owners of not less than twenty-five per centum (25%) in principal amount of the Outstanding Bonds of the Applicable Series with the written consent of the Facility Provider for such Series, shall proceed (subject to the provisions of the Master Indenture), to protect and enforce its rights and the rights of the Bondowners or of such Facility Provider under the Master Indenture or under the Applicable Supplemental Indenture or under the laws of the State of Wisconsin or the State of New York by such suits, actions or special proceedings in equity or at law, either for the specific performance of any covenant contained under the Master Indenture or under the Applicable Supplemental Indenture or in aid or execution of any power in the Master Indenture or therein granted, or for an accounting against the Authority as if the Authority were the trustee of an express trust, or for the enforcement of any proper legal or equitable remedy as the Trustee shall deem most effectual to protect and enforce such rights.

In the enforcement of any remedy under the Master Indenture and under the Applicable Supplemental Indenture the Trustee shall be entitled to: (i) sue for, enforce payment of, and receive any and all amounts then, or during any default becoming, and at any time remaining, due from the Authority for principal or interest or otherwise under any of the provisions of the Master Indenture or of the Applicable Supplemental Indenture or of the Applicable Bonds, with interest on overdue payments of the principal of or interest on the Applicable Bonds at the rate or rates of interest specified in such Bonds, together with any and all costs and expenses of collection and of all proceedings under the Master Indenture and under the Applicable Supplemental Indenture and under such Bonds, without

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prejudice to any other right or remedy of the Trustee or of the Owners of such Bonds, and to recover and enforce judgment or decree against the Authority but solely as provided in the Master Indenture, in the Applicable Supplemental Indenture and in such Bonds, for any portion of such amounts remaining unpaid, with interest, costs and expenses, and to collect in any manner provided by law, the moneys adjudged or decreed to be payable; and (ii) sue for, enforce payment of, and receive any and all amounts then, or during any default becoming, and at any time remaining, due from the Applicable Participants for principal or interest or otherwise under any of the Applicable Participant Bonds or Applicable Loan Agreements (other than the Unassigned Rights). (Section 11.03)

Limitation of Rights of Individual Bondowners

No Owner of any of the Bonds shall have any right to institute any suit, action or proceeding in equity or at law for the execution of any trust under the Master Indenture, or for any other remedy under the Master Indenture unless such Owner previously shall have given to the Trustee written notice of the event of default on account of which such suit, action or proceeding is to be instituted, and unless also the Owners of not less than twenty-five per centum (25%) in principal amount of the Outstanding Bonds of the Applicable Series or, in the case of , any “Event of Default” as provided in the Applicable Supplemental Indenture, the Owners of not less than twenty-five per centum (25%) in principal amount of the Outstanding Bonds of the Applicable Series, shall have made written request to the Trustee after the right to exercise such powers or right of action, as the case may be, shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers granted by the Master Indenture or to institute such action, suit or proceeding in its or their name, and unless, also, there shall have been offered to the Trustee reasonable security and indemnity against the costs, expenses, and liabilities to be incurred therein or thereby, and the Trustee shall have refused or neglected to comply with such request within a reasonable time. (Section 11.07)

Defeasance

If the Authority shall pay or cause to be paid to the Owners of Bonds of an Applicable Series the principal, Sinking Fund Installments, if any, or Redemption Price of and interest thereon, at the times and in the manner stipulated therein, in the Master Indenture, and in the Applicable Supplemental Indenture, then the pledge of the Revenues or other moneys and securities pledged to such Bonds and all other rights granted by the Master Indenture to such Owners of Bonds shall be discharged and satisfied.

Notwithstanding any provision of the Master Indenture to the contrary, if any Participant shall have prepaid the amounts due under its Loan Agreement and in accordance therewith shall pay or cause to be paid its Allocable Portion of the principal, Sinking Fund Installments, if any, or Redemption Price, if applicable, and interest on the Bonds or portions thereof applicable to such Loan Agreement at the times and in the manner stipulated therein, in the Master Indenture, and in the Applicable Supplemental Indenture, then the pledge of the Revenues or other moneys and securities pledged with respect to such Loan Agreement or any portion thereof and all other rights granted under such Loan Agreement shall be discharged and satisfied. In such event, the Trustee shall, upon the request of the Authority, execute and deliver such documents to evidence such discharge and satisfaction as may be reasonably required by the Participant, and the Authority, and all moneys or other securities held by it pursuant to the Master Indenture and to a Supplemental Indenture which are not required for the payment or redemption of its Allocable Portion of the Bonds of such Series to be defeased or any portion thereof not theretofore surrendered for such payment or redemption shall be paid or delivered by the Trustee as follows: first, to the Arbitrage Rebate Fund, the amount required to be deposited therein in accordance with the Master Indenture or the Applicable Supplemental Indenture or Applicable Tax Certificate; second, to the Authority the amount certified by the Authority to be then due or past due pursuant to the Applicable Loan Agreement to be prepaid for fees and expenses of the Authority or pursuant to any indemnity; and, then, the balance thereof to the Participant. Such moneys or investments so paid or delivered shall be released from any trust, pledge, lien, encumbrance or security interest created by the Master Indenture, by a Supplemental Indenture or by such Loan Agreement.

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Bonds for the payment or redemption of which moneys shall have been set aside and shall be held in trust by the Trustee (through deposit of moneys for such payment or redemption or otherwise) at the maturity or redemption date thereof shall be deemed to have been paid within the meaning and with the effect expressed in the paragraph above. All Outstanding Bonds of any Applicable Series or any maturity within a Series or a portion of a maturity within a Series shall prior to the maturity or redemption date thereof be deemed to have been paid within the meaning and with the effect expressed in the paragraph above if (a) in case any of said Bonds are to be redeemed on any date prior to their maturity, the Authority shall have given to the Trustee, in form satisfactory to it, irrevocable instructions to give as provided in the Master Indenture notice of redemption on said date of such Bonds, (b) there shall have been deposited with the Trustee either moneys in an amount which shall be sufficient, or Defeasance Securities, accompanied by a report prepared by the Verification Agent, the principal of and interest on which when due will provide moneys which, together with the moneys, if any, deposited with the Trustee at the same time, shall be sufficient to pay when due the principal, Sinking Fund Installments, if any, or Redemption Price, if applicable, and interest due and to become due on said Bonds on and prior to the redemption date or maturity date thereof, as the case may be, (c) the Trustee shall have received the written consent of each Applicable Facility Provider which has given written notice to the Trustee and the Authority that amounts advanced under an Applicable Credit Facility or Liquidity Facility issued by it or the interest thereon have not been repaid to such Facility Provider, and (d) in the event said Bonds are not by their terms subject to redemption within the next succeeding sixty (60) days, the Authority shall have given the Trustee, in form satisfactory to it, irrevocable instructions to give, as soon as practicable, by first class mail, postage prepaid, to the Owners of said Bonds at their last known addresses appearing on the registration books, and by posting to the MSRB. The Authority shall give written notice to the Trustee of its selection of the Series and maturity payment of which shall be made in accordance with the provisions of the Master Indenture described in this paragraph. Such notice shall be given on behalf of the Authority to the Trustee by the Applicable Participants then having Participant Bonds outstanding and upon the delivery of such notice, the Authority shall be deemed, without any action on its part, to have properly given such notice under this Section. The Trustee shall select the Bonds of like Series and maturity payment of which shall be made in accordance with the Master Indenture. Neither the Defeasance Securities nor moneys deposited with the Trustee pursuant to the provisions of the Master Indenture described in this paragraph nor principal or interest payments on any such Defeasance Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal, Sinking Fund Installments, if any, or Redemption Price, if applicable, of and interest on said Bonds; provided, however, that any moneys received from such principal or interest payments on such Defeasance Securities deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable, be reinvested in Defeasance Securities maturing at times and in amounts sufficient to pay when due the principal, Sinking Fund Installments, if any, or Redemption Price, if applicable, of and interest to become due on said Bonds on and prior to such redemption date or maturity date thereof, as the case may be. Any income or interest earned by, or increment to, the investment of any such moneys so deposited, shall, to the extent certified by the Trustee to be in excess of the amounts required hereinabove to pay the principal, Sinking Fund Installments, if any, or Redemption Price, if applicable, of and interest on such Bonds, as realized, be paid by the Trustee as follows: first, to the Applicable Arbitrage Rebate Fund if any, the amount required to be deposited therein in accordance with the direction of the Authority; second, to the Authority the amount certified by the Authority to be then due or past due pursuant to the Applicable Loan Agreement for fees and expenses of the Authority or pursuant to any indemnity; third, to each Applicable Facility Provider the payments owed to it which have not been repaid, pro rata, based upon the respective amounts then unpaid to each Facility Provider; and, then, the balance thereof to the Participant. The moneys so paid by the Trustee shall be released of any trust, pledge, lien, encumbrance or security interest created by the Master Indenture. (Section 12.01)

No Recourse under Master Indenture or on the Bonds

All covenants, stipulations, promises, agreements and obligations of the Authority contained in the Master Indenture shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any Authority Indemnified Person in his or its individual capacity, and no recourse shall be had for the payment of the principal, Sinking Fund Installments, if any, or Redemption Price of or interest on the Bonds or for any claims based thereon, on the Master Indenture or on the Supplemental Indenture against any Authority Indemnified Person or

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any Person executing the Bonds, all such liability, if any, being expressly waived and released by every Owner of Bonds by the acceptance of the Bonds.

(Section 14.04)

Authority’s Performance

None of the provisions of this Indenture or any Supplemental Indenture shall require the Authority to expend or risk its own funds or otherwise to incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers hereunder, unless payable from the Pledged Revenues, or unless the Authority shall first have been adequately indemnified to its satisfaction against the cost, expense, and liability which may be incurred thereby. The Authority shall not be under any obligation hereunder to perform any administrative service with respect to the Bonds or any Project (including, without limitation, record keeping and legal services), it being understood that such services shall be performed or provided by the Trustee or the Applicable Participant. The Authority covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions expressly contained in this Master Indenture, the Applicable Loan Agreement, and any and every Bond executed, authenticated and delivered under this Master Indenture; provided, however, that the Authority shall not be obligated to take any action or execute any instrument pursuant to any provision hereof unless and until it shall have (i) been requested to do so in writing by the Participant, the Trustee or the Bondowners: (ii) received from the party requesting such action or execution assurance satisfactory to the Authority that the Authority’s reasonable expenses incurred or to be incurred in connection with taking such action or executing such instrument have been or will be paid or reimbursed to the Authority; and (iii) if applicable, received in a timely manner the instrument or document to be executed, in form and substance satisfactory to the Authority. In complying with any provision herein or in the Applicable Loan Agreement requiring the Authority to “cause” another Person to take or omit any action, the Authority shall be entitled to rely conclusively (and without independent investigation or verification) on the faithful performance by the Trustee or the Participant(s), as the case may be, of their respective obligations hereunder and under the Applicable Loan Agreement. The Authority shall not be required to take any action hereunder, under any Supplemental Indenture or any Loan Agreement that it reasonably believes to be unlawful. In acting, or in refraining from acting hereunder or the Applicable Loan Agreement, the Authority may conclusively rely on the advice of its counsel.

(Section 14.10)

No Obligation to Enforce Assigned Rights

Notwithstanding anything to the contrary in the Indenture, the Authority shall have no obligation to and instead the Trustee and/or the Bondowners, as the case may be, in accordance with the Indenture, shall have the right, without any direction from or action by the Authority, to take any and all steps, actions and proceedings, to enforce any or all rights of the Authority under the Indenture and Applicable Loan Agreement (other than the Unassigned Rights), including, without limitation, the rights to enforce the remedies upon the occurrence and continuation of an Event of Default and the obligations of the Participant under the Applicable Loan Agreement. (Section 14.12)

Non-Impairment

Nothing in the Indenture shall be deemed or construed to limit, impair or affect in any way the Authority’s (or any Authority Indemnified Person’s) right to enforce the Unassigned Rights, regardless of whether there is then existing an Event of Default (including, without limitation, a payment default), or any action based thereon or occasioned by an Event of Default or alleged Event of Default, and regardless of any waiver or forbearance granted by the Trustee or any Bondowner in respect thereof. Any default or Event of Default in respect of the Unassigned Rights may only be waived with the Authority’s written consent.

(Section 14.13)

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SUMMARY OF SUPPLEMENTAL INDENTURE NO. 1

Interest Payments

The Series 2015A Bonds shall bear interest from their date, payable semi-annually on June 15 and December 15, commencing June 15, 2016.

(Section 2.04)

Optional Redemption

The Series 2015A Bonds are subject to redemption at any time at the option of the Authority, upon direction of a Series 2015A Participant as provided in the Master Indenture, at an amount equal to the Make-Whole Redemption Price, plus accrued interest to the date of redemption; provided however, that if the County of Oneida requests the Authority to direct the optional redemption of the Series 2015A Bonds as provided in the Master Indenture, the Authority shall redeem such portion of the Series 2015A Term Bond maturing on December 15, 2023 as corresponds to the principal amount of the County of Oneida’s Participant Bonds being redeemed; provided further that if either the County of Wayne or the County of Onondaga requests the Authority to direct the optional redemption of the Series 2015A Bonds as provided in the Master Indenture, the Authority shall redeem such portion of the Series 2015A Term Bond maturing on December 15, 2025 as corresponds to the principal amount of the County of Wayne’s or County of Onondaga’s Participant Bonds, as the case may be, being redeemed.

(Section 2.07)

No Recourse on Series 2015A Bonds

No recourse shall be had for the payment of the principal, Sinking Fund Installments or Redemption Price of or interest on the Series 2015A Bonds or for any claim based thereon, on the Master Indenture or on Supplemental Indenture No. 1 against any Authority Indemnified Person, including any person executing the Series 2015A Bonds and no Authority Indemnified Person shall be subject to any personal liability or accountability by reason of the issuance thereof, all such liability being expressly waived and released by every Owner of Series 2015A Bonds by the acceptance thereof.

(Section 3.02)

Establishment of Funds

The following funds shall be established, held, maintained and applied by the Trustee in accordance with of the Master Indenture, except as provided in Supplemental Indenture No. 1. Each such fund shall be designated with the same designation as the Series 2015A Bonds.

(a) Series 2015A Cost of Issuance Fund; and (b) Series 2015A Debt Service Fund

The Trustee is authorized to keep amounts deposited in the Series 2015A Cost of Issuance Fund and the Series 2015A Debt Service Fund in an Eligible Account with the Trustee pending disbursement as provided in the Master Indenture.

(Section 4.01)

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Application of Proceeds and Deposit of Moneys

Simultaneously with the issuance and delivery of the Series 2015A Bonds, the cash proceeds of the sale of the Series 2015A Bonds (which sum is exclusive of the Underwriter’s discount) shall be deposited by the Trustee as follows: (a) the amount representing accrued interest, if any, on the Series 2015A Bonds from the date thereof to the date of delivery thereof, shall be deposited in the Series 2015A Debt Service Fund and (b) the amount representing a portion of the Costs of Issuance to be paid from the Series 2015A Bonds shall be deposited in the Costs of Issuance Account. The balance shall be paid to each Series 2015A Participant as provide in the Supplemental indenture No. 1.

The Allocable Portion of the principal amount of the Series 2015A Bonds, each maturity thereof, the costs of issuance and the proceeds of the Series 2015A Bonds allocable to each Series 2015A Participant is set forth in Exhibit B to Supplemental Indenture No. 1.

(Section 4.02)

Limitation of Rights

Nothing in Supplemental Indenture No. 1 or in the Series 2015A Bonds, express or implied, shall give or be construed to give any Person other than the Authority, the Trustee and the Owner or Owners of the Series 2015A Bond or their assigns, any legal or equitable right, remedy or claim under or in respect of Supplemental Indenture No. 1, or under any covenant, condition and provision therein contained, all its covenants, conditions and provisions being for the sole benefit of the Authority, the Trustee and of such Owner; provided, however, that (i) the Authority Indemnified Persons shall be considered intended third-party beneficiaries of Supplemental Indenture No. 1 in respect of their exculpation from liability as stated in Supplemental Indenture No. 1; and (ii) Supplemental Indenture No. 1 shall not serve to limit the rights of any Person (including any Authority Indemnified Person) as an intended third-party beneficiary of the Master Indenture, the Applicable Loan Agreements or any other document or instrument issued in respect of the Series 2015A Bonds.

(Section 6.02)

SUMMARY OF THE LOAN AGREEMENTS

Loan Clauses

(A) Loan Consummation. Subject to the conditions and in accordance with the terms of the Loan Agreement, the Authority agrees to make the Loan and the County agrees to accept and repay the Loan, and as evidence of the Loan made to the County, the County agrees to issue to or upon the order of the Authority, and to deliver to or upon the order of the Authority, the County Bonds in the aggregate principal amount, bearing interest at rates and maturing at the times and in the amounts and being subject to redemption as set forth in the Loan Agreement.

The Authority shall have the right to terminate the Loan Agreement if pursuant to the Bond Purchase Contract (as defined in the Authority Resolution) by and among the Authority and Underwriter (as defined in the Authority Resolution), either the Authority or the Underwriter shall have the right to terminate the Bond Purchase Contract and be relieved of its respective obligation to deliver or accept delivery of the Authority Bonds, as the case may be. In the event that the Underwriter does not purchase the Authority Bonds, then upon written notice delivered to the County by the Authority, the Authority may terminate both its obligation to make the Loan and the obligation of the County to deliver the County Bonds upon the terms set forth in the Loan Agreement, provided that the County’s obligation to pay its Allocable Portion of costs and expenses related to preparation of the preliminary and/or final official statement(s) relating to the Authority Bonds shall survive any such termination.

(B) Payment to Trustee. Commencing on the date set forth in the Loan Agreement, the County shall deposit or cause to be deposited with the Trustee the full amount of the payment due on the County Bonds as set forth in the Loan Agreement. Investment earnings on such amounts shall accrue to the benefit of the County and shall be

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applied as provided in the section of the Loan Agreement described below under the heading “Application of Interest Earnings.”

(Section 3.1)

Other Amounts Payable

(A) The County expressly agrees to pay to the Authority:

(i) Upon the issuance and sale of the Authority Bonds, the County’s Allocable Portion (or such other portion thereof as shall be agreed upon by the County and the Authority) of the costs and expenses of the Authority in the preparation, sale and delivery of the Authority Bonds, the preparation and delivery of any legal instruments, closing transcripts and documents necessary in connection with the Loan Agreement and therewith and their filing and recording, if required, and all taxes and charges payable in connection with any of the foregoing, including, without limitation, (i) to the Authority, the Authority’s issuance fee (less, if applicable, any application fee previously paid by the County to the Authority); and (ii) attorney’s fees incurred by the Authority in connection with the issuance of the Bonds. Such costs shall be in the amount and payable from the sources identified in Exhibit C to the Loan Agreement;

(ii) The amount of any Additional Payments (other than those paid pursuant to clause (i) above) shall be billed to the County by the Authority or the Trustee from time to time, together with a statement certifying that the amount billed has been incurred or paid by the Authority or the Trustee for one or more of the above items. The Authority may, but shall not be required to, submit a bill to the County for payment of the Authority’s annual fee, which shall be paid in semiannual installments on the six (6)-month anniversary of the Closing Date and subsequently on the same day every sixth (6th) month thereafter. The amount of each semiannual payment shall be determined by multiplying (i) the principal amount of the County’s Allocable Portion of the Authority Bonds then Outstanding as of the last day of the calendar month preceding the installment payment due date by (ii) 2/100 of 1 percent (2 basis points) by (iii) one-half (1/2).

(B) Indemnification. To the fullest extent permitted by law, the County agrees to indemnify, defend and hold harmless the Authority and each Authority Indemnified Person against any and all liabilities, losses, costs, expenses, fees, charges, damages or claims of any nature, kind or character, and shall pay any and all judgments or expenses of any and all kinds or nature and however arising, imposed by statute, law, regulation or at common law including interest thereon (collectively, “Liabilities”), which it or any of them may sustain, be subject to or be caused to incur by reason of any claim, action, suit, charge or proceeding arising from or out of (1) the issuance by the County of its Participant Bonds and the making of the Loan by the Authority to the County; (2) any failure by the County to deliver the County Bonds to the Authority in accordance with the provisions of the Loan Agreement; (3) an allegation that an official statement, prospectus, placement memorandum or other offering document prepared in connection with the sale and issuance of the Authority Bonds contained an untrue or misleading statement of a material fact obtained from the County relating to the County or the Project, or omitted to state a material fact relating to the County or the Project necessary in order to make the statements made therein in light of the circumstances under which they were made not misleading; (4) any other act or omission by or of the County of any kind or nature that constitutes a default, breach or violation of any representation, warranty, covenant or agreement of the County contained in the Loan Agreement, in the County’s Letter of Representation delivered in connection with the Bond Purchase Contract or in the Continuing Disclosure Agreement, in each case regardless of whether such default, breach or violation is declared to be an Event of Default thereunder and regardless of whether such Event of Default is waived or a forbearance granted by the Authority or the Trustee in connection therewith (collectively, the “Indemnified Liabilities”); or (5) the obligation of the Authority to defend and indemnify the Trustee pursuant to the Master Indenture; provided, however, that neither the Authority nor any Authority Indemnified Person shall be indemnified or held harmless from any Indemnified Liability arising out of the willful misconduct of the Authority or such Authority Indemnified Person.

The Authority agrees to give the County prompt notice in writing of the assertion of any claim or the institution of each such suit, action or proceeding and to cooperate with the County in the investigation of such claim and the defense, adjustment, settlement or compromise of any such action or proceeding. The Authority or Authority

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Indemnified Person shall not settle any such suit, action or proceeding without the prior written consent of counsel to the County.

Except as provided in the following paragraph, the County, at its own cost and expense, shall defend any and all suits, actions or proceedings which may be brought or asserted against the Authority or any Authority Indemnified Person, for which the County is required to indemnify the Authority or Authority Indemnified Person or hold the Authority or Authority Indemnified Person harmless, but this provision shall not be deemed to relieve any insurance company which has issued a policy of insurance as may be provided for in the Loan Agreement from its obligation to defend the County, the Authority or any Authority Indemnified Person or any other insured named in such policy of insurance in connection with claims, suits or actions covered by such policy.

The Authority and each Authority Indemnified Person shall, at the cost and expense of the County, be entitled to employ separate counsel in any action or proceeding arising out of any alleged act or omission which occurred or is alleged to have occurred while the Authority Indemnified Person was acting within the scope of his or her employment or duties in connection with the issuance of the Authority Bonds or the Loan or use of the Project, and to conduct the defense thereof, in which (i) the counsel to the County determines, based on his or her investigation and review of the facts and circumstances of the case, that the interests of such person and the interests of the County are in conflict, or in the event such counsel determines that no conflict exists, a court of competent jurisdiction subsequently determines that such person is entitled to employ separate counsel, or (ii) such person may have an available defense which cannot as a matter of law be asserted on behalf of such person by the County or by counsel employed by it, or (iii) such person may be subject to criminal liability, penalty or forfeiture, or (iv) the County has consented to the employment of separate counsel or the counsel retained by the County is not reasonably acceptable to the Authority or Authority Indemnified Person; provided, however, that the County shall not be liable for attorneys’ fees of separate counsel so retained or any other expenses incurred in connection with the defense of an action or proceeding described in this paragraph, unless the Authority Indemnified Person shall have prevailed on the merits or such action or proceeding was dismissed or withdrawn, or an adverse judgment was reversed upon appeal, and such action or proceeding may not be recommenced. Attorney’s fees of separate counsel retained in accordance with this paragraph shall be paid only upon the audit by an appropriate County officer.

The rights of the Authority and the Authority Indemnified Persons to indemnity under the Loan Agreement and rights to payment of fees and reimbursement of expenses shall survive the final payment or defeasance of the Authority Bonds and the provisions of the Loan Agreement shall remain valid and in effect notwithstanding repayment of the Loan or payment, redemption or defeasance of the Authority Bonds or termination of the Loan Agreement or the Indenture.

(Section 3.2)

Redemption of County Bonds

(A) Redemption Provisions. The County Bonds shall be subject to redemption prior to maturity in accordance with Exhibit B of the Loan Agreement. The County shall not, without the prior written consent of the Authority, redeem prior to maturity any of the County Bonds prior to the date on which the County’s Allocable Portion of the then outstanding Authority Bonds are redeemable.

(B) Costs. The County shall pay all costs and expenses of the Authority in effecting the redemption of any Authority Bonds prior to maturity that are so redeemed due to the redemption prior to maturity of any County Bonds, including any difference in the amount of interest due on the County Bonds and the amount of interest due on the Authority Bonds.

(Section 3.3)

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Application of Loan Proceeds and Unspent Proceeds

(A) To the extent the proceeds of the Loan are to be used to pay Costs of Issuance of Authority Bonds or County Bonds or any amounts payable to the Authority under the Loan Agreement, the portion of the proceeds to be so used shall be paid to or to the order of the Authority or the County, as the case may be, promptly and, until so paid, shall be held on deposit with the Trustee.

(B) To the extent that the proceeds of the Loan are to be used to finance the Project, they shall be maintained in a separate account established by the County (not commingled with any other funds of the County) pursuant to Section 165.00 of the State of New York’s Local Finance Law and Sections 10 and 11 of the State of New York’s General Municipal Law and maintained in accordance with the provisions of the Tax Certificate. Amounts in such account shall be invested as directed by the County in accordance with the State of New York’s General Municipal Law. Disbursements shall be made from such account upon delivery to the Bank of a written requisition of the County stating that such disbursement is (1) for payment to the County for the reimbursement of Costs of the Project previously paid by the County or (2) for direct payment of Project costs, accompanied by copies of the invoice(s) to be paid.

(Section 3.4)

Effective Date and Term; Survival

The date of the Loan Agreement is for reference purposes only and the Loan Agreement shall become effective upon the date of execution and delivery thereof by the parties thereto, shall remain in full force and effect from such date and shall expire on such date as all Authority Bonds shall be discharged and satisfied in accordance with the provisions thereof and all obligations of the County to the Authority under the Loan Agreement are satisfied.

(Section 3.5)

Execution and Delivery of County Bonds

At least five Business Days prior to the authentication by the Trustee and delivery of Authority Bonds and in order to evidence the obligation of the County to the Authority to repay the Loan financed with proceeds of the Authority Bonds, the Authority and the County agree that the County will execute and deliver to the Trustee its County Bonds, to be held in escrow pending delivery of the Authority Bonds. Such County Bonds shall be general obligations of the County that conform to the requirements of the Constitution and Local Finance Law of the State of New York, and shall (i) provide for payments of principal, premium, if any, and interest sufficient in the aggregate to make all payments of principal, premium, if any, and interest on the related portion of the Authority Bonds due on any date as set forth in Exhibit B of the Loan Agreement and (ii) contain redemption provisions (including premium, if any) consistent with the provisions contained in Exhibit B of the Loan Agreement.

(Section 3.6(b))

Trustee; Investment of Loan Proceeds and County Bond Prepayments

The County authorizes the Trustee to invest amounts that are held by the Trustee for the account of the County in accordance with the provisions of the Master Indenture. The County acknowledges that the Authority and the Trustee shall not be liable or responsible for any loss, direct or indirect, resulting from any investment authorized by the Master Indenture and the Loan Agreement or from the redemption, sale or maturity of any such investment as therein authorized or from any depreciation in value of any such investment.

(Section 3.7)

Application of Interest Earnings

The Authority agrees that it will cause to be deposited in the Debt Service Fund the interest earned and paid

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on the investment of moneys in the Debt Service Fund. Pursuant to the Master Indenture, the Authority agrees that, so long as no event of default has occurred under this Loan Agreement, the Authority shall pay to the County annually the County’s Allocable Portion (as determined by the Authority) of excess amounts in the Debt Service Fund described in the Master Indenture unless applied by the Authority as a credit towards the next succeeding debt service payments due from the County to the Authority on the County Bonds.

(Section 3.9)

Compliance with Laws and Agreements

(A) Compliance. The County agrees that the Project shall at all times during the term of any Loan be in compliance with applicable federal and State of New York laws and regulations. The County will at all times construct and operate (or cause to be constructed and operated) the Project, in compliance with all applicable federal, State of New York and local laws, ordinances, rules, regulations and the Loan Agreement, and with all other applicable laws and regulations to the extent necessary to ensure the availability of the Project for its intended purposes and to ensure the safety of the public.

(B) SEQRA. The County certifies with respect to the Project that it has complied, and agrees to continue to comply, with all requirements of the State of New York’s Environmental Quality Review Act.

(Section 4.1)

No Warranty Regarding Condition, Suitability or Cost of Project

The Authority makes no warranty, either express or implied, as to the Project or its condition or that it will be suitable for the County’s purposes or needs, or that the proceeds of the Loan will be sufficient to pay the costs of the Project. Nothing in the Loan Agreement shall relieve the County of its responsibility to properly plan, design, build and effectively operate and maintain the Project as required by laws, regulations, permits and good management practices. The County acknowledges and agrees that the Authority or its representatives are not responsible for increased costs resulting from defects in the plans, design drawings and specifications or other Project documents. Nothing in the Loan Agreement prohibits the County from requiring more assurances, guarantees, or indemnity or other contractual requirements from any party performing Project work.

(Section 4.2)

Construction of Project

(A) Construction. To the extent, if any, that the Project is not yet complete, the County agrees to ensure that the Project will be constructed expeditiously.

(B) Completion Certificate. To the extent, if any, that the Project is not yet complete, the County shall deliver to the Authority a certificate of the County stating that the Project has been completed in accordance with the Loan Agreement within seven (7) Business Days following such completion.

(Section 4.3)

Accounting and Records

The County agrees: (i) to permit the State Comptroller or the Authority, or their authorized representatives to review or audit all records relative to the Project and the Existing Indebtedness; and (ii) to promptly fulfill information requests by any of them or their authorized representatives.

The County expressly acknowledges and agrees that the Authority and the Trustee shall have the right to obtain and review the records relating to accounts established by the County pursuant to the Loan Agreement and agrees to deliver copies of such records to the Authority or the Trustee upon request. The County covenants and

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agrees to maintain records with respect to the Project costs for a period of not less than six (6) years subsequent to the maturity or earlier redemption of the Authority Bonds and expressly acknowledges and agrees to provide copies of such records to the Authority upon request.

(Section 4.4

Application of Loan Proceeds

The County shall apply the proceeds of the Loan solely as provided in the Agreement.

(Section 5.1)

Payment of County Bonds

The County covenants and agrees that it shall duly and punctually pay or cause to be paid the principal amount, premium, if any and interest on its County Bonds, at the dates and places and in the manner stated in such County Bonds and in accordance with the Loan Agreement and that such obligation shall not be subject to any defense (other than payment) or any rights of setoff, recoupment, abatement, counterclaim or deduction and shall be without any rights of suspension, deferment, diminution or reduction it might otherwise have against the Authority, the Trustee or the owner of any Authority Bond.

(Section 5.2)

Sinking Fund Deposits

The County covenants and agrees that: (1) it shall annually appropriate and make annual contributions to the Sinking Fund Account in accordance with the Required Balance Certificate and the Sinking Fund Agreement; and (2) upon the final maturity or earlier redemption of the County Bonds, it shall direct the Comptroller to pay the amount on deposit in the Sinking Fund Account to the Trustee in an amount sufficient to pay the principal amount due on such maturity or redemption date.

(Section 5.3)

Defaults

An “Event of Default” under the Loan Agreement shall mean any one or more of the following events: (a) failure by the County to pay or cause to be paid when due the amounts to be paid under the County Bonds; (b) failure by the County to pay or cause to paid when due any Sinking Fund Deposits; (c) failure by the County to pay or to cause to be paid when due any other payment required to be made under the Loan Agreement which failure continues for a period of thirty (30) days after payment thereof was due, provided that written notice thereof shall have been given to the County not less than thirty (30) days prior to the due date thereof; (d) failure by the County to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in subsections (a) and (b) of this paragraph, which failure shall continue for a period of thirty (30) days after written notice, specifying such failure and requesting that it be remedied, is given to the County by the Authority or such longer period, as is required to cure such default, if by reason of the nature of such failure the same cannot be remedied within such thirty (30) day period and the County has within such thirty (30) day period commenced to take appropriate actions to remedy such failure and is diligently pursuing such actions; (e) any representation or warranty of the County contained in the Loan Agreement shall have been at the time it was made untrue in any material respect; or (f) the County shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the County seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it for any substantial part of its property; or the County shall authorize any of the actions set forth above in this subsection (f).

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(Section 6.1)

Remedies

Whenever any Event of Default referred to in the Loan Agreement and described under the heading “Defaults” shall have happened and be continuing (except with respect to any event of default in connection with the Unassigned Rights), the Trustee shall, without requiring direction from the Authority, take whatever action at law or in equity may appear necessary or desirable to collect the payments then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the County under the Loan Agreement (including, without limitation, the County’s obligation to pay the principal of, premium, if any, and interest on the County Bonds).

(Section 7.1)

No Remedy Exclusive

No remedy conferred upon or reserved under the Loan Agreement is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under the Loan Agreement or now or thereafter existing at law or in equity or by statute. In order to entitle the Trustee or the Authority, as the case may be, to exercise any remedy reserved to either of them, it shall not be necessary to give any notice, other than such notice as may be expressly required in the Loan Agreement.

(Section 7.2)

Waiver and Non-Waiver

In the event any agreement contained in the Loan Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach under the Loan Agreement. Any Event of Default in respect of the Unassigned Rights may only be waived with the Authority’s written consent. No delay or omission by the Trustee or the Authority to exercise any right or power accruing upon default shall impair any right or power or shall be construed to be a waiver of any such default or acquiescence therein.

(Section 7.3)

Amendments, Supplements and Modifications

The Loan Agreement shall not be amended, supplemented or modified except by a written instrument executed by the Authority and the County and, if such amendment occurs after the issuance of the Authority Bonds, upon compliance with the provisions of the Master Indenture.

(Section 8.4)

Applicable Law and Non-Liability of Authority Indemnified Person

(1) The Loan Agreement shall be governed by and construed in accordance with the laws of the State of New York; provided, that, with respect to the existence, corporate powers, legal capacity, rights (including, without limitation, rights to indemnification and exculpation from liability), privileges, powers, obligations and liabilities of the Authority and the Authority Indemnified Persons, as applicable, this Agreement shall be governed by the laws of the State of Wisconsin, excluding conflicts of law principles.

(2) All claims of whatever character arising out of the Loan Agreement, or under any statute or common law relating in any way, directly or indirectly, to the subject matter of the Loan Agreement or to the dealings between the Authority and any other party to the Loan Agreement, if and to the extent that such claim involves the Authority Indemnified Persons or the Authority’s existence, corporate powers, legal capacity, rights (including, without limitation, rights to indemnification and exculpation from liability), privileges, powers, obligations and liabilities shall be brought in any state or federal court of competent jurisdiction located in Dane County, Wisconsin. By executing

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and delivering the Loan Agreement, each party thereto irrevocably: (i) accepts generally and unconditionally the exclusive jurisdiction and venue of such courts; (ii) waives any defense of forum non conveniens; and (iii) agrees not to seek removal of such proceedings to any court or forum other than as specified above. The foregoing shall not be deemed or construed to constitute a waiver by the Authority of any prior notice or procedural requirements applicable to actions or claims against or involving political subdivisions of the State of Wisconsin that may exist at the time of and in connection with such matter.

(3) No Authority Indemnified Person (including any Authority Indemnified Person who executes any certificate in connection with the Authority Bonds that restates or certifies as to the truth and accuracy thereof) nor the Trustee shall be individually liable for the breach by the Authority of any representation or covenant contained in the Loan Agreement.

(Section 8.6)

Non-Liability of Authority

The Authority shall not be obligated to pay the principal of, premium, if any, or interest on the Authority Bonds or any costs incidental thereto, except from the Revenues or other funds or moneys pledged for their payment in accordance with the Master Indenture. Neither the faith and credit nor the taxing power of any Sponsor, any Member, the State of Wisconsin or any other political subdivision or agency thereof, nor the faith and credit of the Authority, is pledged to the payment of the principal of, premium, if any, or interest on the Authority Bonds or any costs incidental thereto. The Authority has no taxing power. The Authority shall not be liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or in connection with the Loan Agreement, the Authority Bonds or the Master Indenture, except only to the extent amounts are received for the payment thereof from the County under the Loan Agreement, and except as may result solely from the Authority’s own gross negligence or willful misconduct.

The County acknowledges that the Authority’s sole source of moneys to repay the Authority Bonds are from the Revenues or other funds or moneys pledged for their payment in accordance with the Master Indenture, and hereby agrees that if the payments to be made under the Loan Agreement shall ever prove insufficient to pay all principal, premium, if any, and interest on the Authority Bonds as the same shall become due (whether by maturity, redemption, acceleration or otherwise), then upon notice or demand from the Trustee, the County shall pay such amounts as are required from time to time to prevent any deficiency or default in the payment of such principal, premium, if any, or interest when due, including, but not limited to, any deficiency caused by acts, omissions, nonfeasance or malfeasance on the part of the Trustee, the Authority or any third party, subject to any right of reimbursement from the Trustee, the Authority or any such third party, as the case may be, therefor.

(Section 8.8)

Further Assurances; Disclosure of Financial Information, Operating Data and Other Information

(A) The County shall, at the request of the Authority, authorize, execute, acknowledge and deliver such further resolutions, conveyances, transfers, assurances, Loan statements and other instruments as may be deemed necessary or desirable by the Authority, in its sole discretion, for better assuring, conveying, granting, assigning and confirming the rights, security interests and agreements granted or intended to be granted by the Loan Agreement and the County Bonds. The County also agrees to furnish to the Authority such additional information concerning the financial condition of the County as the Authority may from time to time reasonably request.

(B) Without limiting the generality of the foregoing, the County agrees to comply with the terms of the Continuing Disclosure Agreement.

(Section 8.10)

Assignment of Loan Agreement or County Bonds

The County consents to the pledge and assignment to the Trustee of (i) any portion of the Authority’s estate,

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right, title and interest and claim in, to and under the Loan Agreement (excepting with respect to the Unassigned Rights and any payments in respect thereof) and the right to make all related waivers and agreements in the name and on behalf of the Authority, as agent and attorney-in-fact, and to perform all other related acts which are necessary and appropriate under the Loan Agreement, if any, and (ii) the Authority’s estate, right, title and interest and claim in, to and under the County Bonds and payments under the County Bonds.

(Section 8.11)

Authority’s Performance

None of the provisions of the Loan Agreement shall require the Authority to expend or risk its own funds or otherwise to incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers thereunder, unless payable from the Revenues or other funds or moneys pledged for their payment in accordance with the Master Indenture, or unless the Authority shall first have been adequately indemnified to its satisfaction against the cost, expense, and liability which may be incurred thereby. The Authority shall not be under any obligation under the Loan Agreement to perform any administrative service with respect to the Authority Bonds or the Project (including, without limitation, record keeping and legal services), it being understood that such services shall be performed or provided by the Trustee or the County. The Authority covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions expressly contained in the Loan Agreement, the Master Indenture and any and every Bond executed, authenticated and delivered under the Indenture; provided, however, that the Authority shall not be obligated to take any action or execute any instrument pursuant to any provision of the Loan Agreement unless and until it shall have (i) been requested to do so in writing by the County, the Trustee, or the Bondowners; (ii) received from the party requesting such action or execution assurance satisfactory to the Authority that the Authority’s reasonable expenses incurred or to be incurred in connection with taking such action or executing such instrument have been or will be paid or reimbursed to the Authority; and (iii) if applicable, received in a timely manner the instrument or document to be executed, in form and substance satisfactory to the Authority. In complying with any provision in the Loan Agreement or in the Master Indenture requiring the Authority to “cause” another Person to take or omit any action, the Authority shall be entitled to rely conclusively (and without independent investigation or verification) on the faithful performance by the Trustee or the County, as the case may be, of their respective obligations under the Loan Agreement and under the Master Indenture. In acting, or in refraining from acting under the Loan Agreement, the Authority may conclusively rely on the advice of its counsel.

(Section 8.14)

Non-Impairment

Nothing in the Loan Agreement shall be deemed or construed to limit, impair or affect in any way the Authority’s (or any Authority Indemnified Person’s) right to enforce the Unassigned Rights, regardless of whether there is then existing an Event of Default (including, without limitation, a payment default), or any action based thereon or occasioned by an Event of Default or alleged Event of Default, and regardless of any waiver or forbearance granted by the Trustee or any Bondowner in respect thereof. Any default or Event of Default in respect of the Unassigned Rights may only be waived with the Authority’s written consent

(Section 8.15)

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APPENDIX C

FORM OF OPINION OF BOND COUNSEL

THIS PAGE INTENTIONALLY LEFT BLANK APPENDIX C FORM OF OPINION OF BOND COUNSEL

December __, 2015

Public Finance Authority 22 E. Mifflin Street, Suite 900 Madison, Wisconsin 53703

Ladies and Gentlemen:

We have served as bond counsel to the Public Finance Authority (the “Authority”) and not as counsel to any other party in connection with the issuance by the Authority of its $______aggregate principal amount Revenue Bonds (New York State Association of Counties Qualified Energy Conservation Bond Financing Program), Series 2015A (Federally Taxable) (the “Bonds”).

The Bonds are issued under and pursuant to a Master Trust Indenture, dated as of November 1, 2015 (the “Master Trust Indenture”), as supplemented by Supplemental Indenture No. 1, dated as of November 1, 2015 (the “Series Supplement” and, together with the Master Trust Indenture, the “Trust Indenture”), between the Authority and The Bank of New York Mellon, as trustee (the “Trustee”), and authorized by Resolution 15-29A adopted by the Authority’s Board of Directors on June 3, 2015. The Bonds are issued and secured under the Trust Indenture in accordance with Sections 66.0301, 66.0303 and 66.0304 of the Wisconsin Statutes, as from time to time amended and supplemented (the “Act”). The Bonds are being issued for the purposes set forth in the Trust Indenture. Capitalized terms used and not otherwise defined herein have the respective meanings given to them in the Trust Indenture.

With respect to the Bonds, the Authority has entered into Loan Agreements, each dated as of November 1, 2015 (collectively, the “Loan Agreements”), with Wayne County, New York, Onondaga County, New York and Oneida County, New York, respectively (each a “County” and collectively, the “Counties”), providing, among other things, for a loan to each County for the purposes set forth therein and in the Trust Indenture. Pursuant to each Loan Agreement, each County shall deliver to the Authority its general obligation bonds (the “County Bonds”) upon which each County is required to make payments scheduled to be sufficient to pay each County’s Allocable Portion of principal, sinking fund installments and redemption price of and interest on the Bonds as the same become due, which payments have been pledged by the Authority to the Trustee for the benefit of the holders of the Bonds. The Bonds mature on the dates and in the years and amounts, and interest on the Bonds is payable at the rates and in the amounts, set forth in the Series Supplement. The Bonds are issued in fully registered form in denominations of $5,000 or any integral multiple thereof. The Bonds are payable, subject to redemption prior to maturity, exchangeable, transferrable and secured upon the terms and conditions contained in the Trust Indenture. In connection with the foregoing, we have reviewed the applicable law of the State of Wisconsin, the State of New York, and the United States, the Trust Indenture, each of the Loan Agreements, the County Bonds issued by each of the Counties and delivered to the Authority pursuant to each of the Applicable Loan Agreements, opinions of counsel to the Authority, the Trustee, each of the Counties, and bond counsel to each of the Counties, certificates of the Authority, the Trustee, each of the Counties, and such other agreements, instruments, documents, opinions and matters to the extent we deemed necessary to issue the opinions set forth herein. We have assumed that Sinking Fund Agreements by and between each of the Counties and the New York State Comptroller relating to annual contributions to sinking funds established for payment of the County Bonds are valid, legal and enforceable agreements of the New York State Comptroller.

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Based upon the foregoing and subject to the limitations stated below, we are of the opinion that under existing law: 1. The Trust Indenture has been duly and lawfully adopted by the Authority. 2. The Trust Indenture and the Loan Agreements are legal, valid and binding obligations of the Authority, and assuming due execution and delivery by the other parties thereto, are enforceable in accordance with their respective terms. 3. The Bonds have been duly and validly authorized to be issued and constitute legal, valid and binding special obligations of the Authority payable as provided in the Trust Indenture, enforceable in accordance with their terms and the terms of the Trust Indenture, and are entitled to the equal benefits of the Trust Indenture and the Act. The Bonds do not represent or constitute a general obligation or a pledge of the faith and credit of the Authority, any Sponsor, any Member, the State of Wisconsin or the State of New York, or any political subdivision or public corporation of the State of Wisconsin or the State of New York. 4. The Trust Indenture creates a valid pledge to secure the payment of principal of and interest on the Bonds from the Applicable Pledged Revenues, the Applicable County Bonds, and the Applicable Loan Agreements (except for the Unassigned Rights and payments in respect thereof and all funds authorized in the Trust Indenture). 5. Interest on the Bonds is not excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”). The Bonds are not qualified energy conservation bonds pursuant to Section 54D of the Code. We express no opinion as to any other tax consequences with respect to the Bonds.

The opinions stated above are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. In issuing such opinions, we assume, without independent verification, and rely upon (i) the accuracy of the factual matters represented, warranted or certified in the proceedings and documents we have examined, (ii) the due and legal authorization, execution and delivery of such proceedings and documents by, and the valid, binding and enforceable nature thereof, upon any party other than the Authority, and (iii) the accuracy as a matter of law of the conclusions set forth in each of the opinions of counsel we have reviewed and delivered in connection with the authorization and issuance of the Bonds and all of the County Bonds. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the Bonds, the Trust Indenture or any of the Loan Agreements. The opinions contained herein are qualified to the extent that the enforceability of the Trust Indenture, the Bonds and each of the Loan Agreements may be limited by bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors’ rights generally or to the availability of any particular remedy. The opinions set forth herein speak only as of this date, and no other opinion shall be implied or inferred as a result of anything contained in or omitted herein. This opinion may be relied upon only by the parties to which it is addressed and by no other party without our written consent. Our engagement as bond counsel with respect to the Bonds has concluded on this date.

Very truly yours,

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