City of Cleveland, Ohio $67,395,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A

This Preliminary Official Statement and information contained herein are subject to change, completion or amendment without notice. These securities may not be sold nor may offers to buy be accepted prior to the time this Preliminary Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. counsel, Wilkerson&AssociatesCo, LPA.ItisexpectedthatdeliveryoftheSeries2017ABondswill bemadeonoraboutJune__,2017. be passeduponfortheCitybyBarbara A.Langhenry,itsDirectorofLaw.Certainlegalmatterswillbe passeduponfortheUnderwritersbytheir legal mattersrelatingtotheirissuance bySquirePattonBoggs(US)LLP,BondCounsel,andcertain otherconditions.Certainlegalmatterswill thereof forthepaymentofDebtServiceonSeries2017A Bonds. taxes, otherthantheCityincometaxlevied,byCity, State ofOhioorthetaxingauthorityanyotherpoliticalsubdivision and the Pledged Funds as providedin the Indenture. City orapledgeofthefullfaithandcreditCity.DebtService ontheSeries2017ABondsispayablesolelyfromRevenues close ofbusinessonthelastdaycalendarmonthprecedingthat InterestPaymentDate. Interest PaymentDate(April1andOctoberofeachyear,beginning October1,2017)totheregisteredownerasshownonRegisterat trust officeofU.S.BankNationalAssociation,Cleveland,Ohio(the “BondRegistrar”)andinteresttransmittedbytheBondRegistraroneach Siebert Cisneros Shank&Co.,L.L.C. Academy Securities (defined herein).See“ parity with the Outstanding Bonds, as defined herein, and any additional series of Bonds that may be issued in the future under the Trust Indenture general obligationdebt,allasmorefullydescribedherein.See“SecurityandSourcesofPayment.”TheSeries2017ABondsarebeing issued ona generally theCity’smunicipalincometaxrevenues,toextentthoserevenuesarenotneededpaydebtservicechargeson unvoted The Series2017ABondsarepayablesolelyfromandsecuredundertheIndenturebyapledgeoflienonRevenues(definedherein), being each seriesoftheSeries2017ABondsandcostsrefundingRefundedBonds.See“The–Authorization Purpose.” (i) paycostsofvariousmunicipalimprovements,(ii)advancerefundtheRefundedBonds(definedherein)and(iii) issuanceof provisions oftheIndenture(definedherein),betweenCityandU.S.BankNationalAssociation,astrustee(the“Trustee”),toprovide fundsto Dated: DateofDelivery NEW ISSUEBOOK-ENTRYONLY

for subsequentdisbursementtotheownersofbook-entryinterests. See“ respect totheSeries2017ABondsfromTrustee.DTCisrequired byitsrulesandprocedurestoremitsuchpaymentsparticipantsinDTC transfer toanothernomineeofDTCorasotherwisedescribedinthisOfficialStatement.DTC,itsnominee,willreceiveallpayments with physical deliveryofbondcertificates.TheSeries2017ABondsincertificatedformassuchwillnotbetransferableorexchangeable, exceptfor Series 2017ABondswillbemadeindenominationsof$5,000andanywholemultiplethereof.Ownersbook-entryinterests not receive name ofCede&Co.,asnomineeforTheDepositoryTrustCompany,NewYork,York(“DTC”).Purchasesbook-entryinterests inthe Redemption.”] * Preliminary, subjecttochange. tax aspects,see“TAXMATTERS”herein. a corporation’sadjustedcurrentearningsforpurposesofthecorporatealternativeminimumtax.Formorecompletediscussion on certaincorporations,includingthecorporatealternativeminimumtaxasaresultofinclusionthatinterestincalculation the networthbaseofcorporatefranchisetax.InterestonSeries2017ABondsmaybesubjecttocertainfederaltaxesimposedonly insurance companytax,thedealersinintangiblestaxleviedonbasisoftotalequitycapitalfinancialinstitutions,and exchange orotherdispositionof,theSeries2017ABondsareexemptfromallOhiostateandlocaltaxation,exceptestatetax,domestic for purposesof,andthusmaybesubjectto,thecorporatealternativeminimumtax,(ii)intereston,anyprofitmadeonsale, and corporations;however,interestontheSeries2017ABondsisincludedincalculationofacorporation’sadjustedcurrentearnings income taxpurposesandisnotanitemofpreferenceforthefederalalternativeminimumimposedonindividuals covenants andtheaccuracyofcertainrepresentations,interestonSeries2017ABondsisexcludedfromgrossincomeforfederal

Improvement andRefundingBonds, (Public FacilitiesImprovements) The Series2017ABondsareoffered when,asandifissuedbytheCityacceptedUnderwriters, subjecttotheopinionsoncertain The Series2017ABondsarespecialobligationsoftheCityand donotrepresentorconstitutegeneralobligationdebtofthe Principal andinterestwillbepayabletotheregisteredowner(DTC), principaluponpresentationandsurrenderatthedesignatedcorporate The Series2017ABonds(definedherein)arespecialobligationsoftheCityCleveland,Ohio(the“City”)issuedunderandsecured bythe In theopinionofSquirePattonBoggs(US)LLP,BondCounsel,underexistinglaw(i)assumingcontinuingcompliancewithcertain The Series2017ABondswillbeinitiallyissuedasfullyregisteredbondsunderabook-entrysystem, and willberegisteredinitially in the [Certain oftheSeries2017ABondsaresubjecttoredemptionpriormaturity,asdescribedherein.See“ Subordinate LienIncomeTax Series 2017A-1 $15,940,000* Subordinate LienIncomeTaxImprovementandRefundingBonds,Series2017A S The dateofthisOfficial Statementis______,2017, andtheinformationspeaksonly asofthatdate. ecurity

Refunding Bonds,Series2017A-4 (Revitalization Improvements) Subordinate LienIncomeTax

and PRELIMINARY OFFICIAL STATEMENT DATED MAY 24, 2017 S ources

$2,540,000*

of P ayment (Bridges andRoadwaysImprovements) C Improvement andRefundingBonds,

ity –OtherOutstandingIndebtedness.” Subordinate LienIncomeTax

of H olders of the Series 2017A Bonds do not have the right to have excises or $67,395,000* US B C Series 2017A-2 Consisting of $27,385,000* le v ancorp eland A ppendix Refunding Bonds,Series2017A-5 Subordinate LienIncomeTax (Cemeteries Improvements) C–B , Oh Due: October1,asshownontheinsidefrontcoverpage ook $450,000* io -E ntry O Series 2017A-3(ParksandRecreation nly Improvement andRefundingBonds, S Subordinate LienIncomeTax ystem Facilities Improvements) .” $21,080,000* T he S Raymond James eries William Blair B 2017A (See “Ratings”) Moody’s Ratings S&P

onds

AA+ A1 –

MATURITY SCHEDULE

City of Cleveland, Ohio $67,395,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A

Consisting of

Dated: Date of Delivery Due: October 1, as shown below $15,940,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A-1 (Public Facilities Improvements)

Principal Interest CUSIP+ Maturity Amount Rate Yield Price No.

$______% TERM BOND DUE OCTOBER 1, 20__ YIELD ____% PRICE _____ CUSIP NO. _____

$27,385,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A-2 (Bridges and Roadways Improvements)

Principal Interest CUSIP+ Maturity Amount Rate Yield Price No.

$______% TERM BOND DUE OCTOBER 1, 20__ YIELD ____% PRICE _____ CUSIP NO. _____

$21,080,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A-3 (Parks and Recreation Facilities Improvements)

Principal Interest CUSIP+ Maturity Amount Rate Yield Price No.

$______% TERM BOND DUE OCTOBER 1, 20__ YIELD ____% PRICE _____ CUSIP NO. _____

+ Copyright American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the City and are included solely for the convenience of the holders of the Series 2017A Bonds. The City is not responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the Series 2017A Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Series 2017A Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Series 2017A Bonds.

*Preliminary, subject to change.

$2,540,000* Subordinate Lien Income Tax Refunding Bonds, Series 2017A-4 (Revitalization Improvements)

Principal Interest CUSIP+ Maturity Amount Rate Yield Price No.

$______% TERM BOND DUE OCTOBER 1, 20__ YIELD ____% PRICE _____ CUSIP NO. _____

$450,000* Subordinate Lien Income Tax Refunding Bonds, Series 2017A-5 (Cemeteries Improvements)

Principal Interest CUSIP+ Maturity Amount Rate Yield Price No.

$______% TERM BOND DUE OCTOBER 1, 20__ YIELD ____% PRICE _____ CUSIP NO. _____

*Preliminary, subject to change. [THIS PAGE INTENTIONALLY LEFT BLANK]

CITY OF CLEVELAND, OHIO

MAYOR PRESIDENT OF COUNCIL FRANK G. JACKSON KEVIN J. KELLEY

CLERK OF COUNCIL PATRICIA J. BRITT

DEPARTMENT OF FINANCE Director of Finance SHARON A. DUMAS

Assistant Secretary, Sinking Fund Commission ELIZABETH C. HRUBY

DEPARTMENT OF LAW Director of Law BARBARA A. LANGHENRY

TRUSTEE U.S. Bank National Association Cleveland, Ohio

BOND COUNSEL Squire Patton Boggs (US) LLP Cleveland, Ohio

FINANCIAL ADVISORS

Phoenix Capital Partners LLP Philadelphia, Pennsylvania

and

Government Capital Management, L.L.C. Rutherford, New Jersey

INDEPENDENT AUDITOR Clark Schaefer Hackett

REGARDING THIS OFFICIAL STATEMENT

This Official Statement does not constitute an offering of any security other than the original offering of the Series 2017A Bonds identified on the cover hereof. No person has been authorized by the City or the Underwriter to give any information or to make any representation other than as contained in this Official Statement. Any other information or representation should not be relied upon as having been given or authorized by the City or the Underwriters. 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 2017A Bonds by any person in any jurisdiction in which it is unlawful to make such offer, solicitation or sale.

The information and expressions of opinion in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale made hereunder shall create, under any circumstances, or give rise to any implication that there has been no change in the affairs of the City since its date.

Any statements made in this Official Statement that involve opinions or estimates, whether expressly stated to be such, are made as such and are not representations of fact or certainty, and no representation is made that any of those statements have been or will be realized. Information in this Official Statement that has been derived by the City from its officials and other sources is believed to be accurate and reliable. Information other than that obtained from official records of the City has not been independently confirmed or verified by the City, and its accuracy is not guaranteed.

This Official Statement contains statements which, to the extent they are not recitations of historical fact, constitute “forward-looking statements.” The words “estimate,” “project,” “anticipate,” “expect,” “intend,” “believe,” and similar expressions are intended to identify forward-looking statements. A number of factors affecting the City’s financial results could cause actual results to differ materially from those stated in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

THE COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.

THE SERIES 2017A BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND THE INDENTURE HAS NOT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE SERIES 2017A BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAWS OF THE STATES IN WHICH THE SERIES 2017A BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL, STATE OR OTHER GOVERNMENTAL ENTITY OR AGENCY WILL HAVE PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT OR APPROVED THE SERIES 2017A BONDS FOR SALE. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.

THE UNDERWRITERS HAVE PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION IN THIS OFFICIAL STATEMENT. THE UNDERWRITERS HAVE 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

UNDERWRITERS DO NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION.

The Underwriters have provided the following sentences for inclusion in this Official Statement. In connection with this offering of the Series 2017A Bonds, the Underwriters may overallot or effect transactions that stabilize or maintain the market prices of the Series 2017A Bonds at levels above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time without prior notice. The prices and other terms of the offering and sale of the Series 2017A Bonds may be changed from time to time by the Underwriters after the Series 2017A Bonds are released for sale, and the Series 2017A Bonds may be offered and sold at prices other than the initial offering prices, including sales to dealers, without prior notice.

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 offering document for purposes of, and as that term is defined in, SEC Rule 15c2-12.

iii

BOND ISSUE SUMMARY

THIS BOND ISSUE SUMMARY CONTAINS CERTAIN INFORMATION FOR QUICK SUMMARY. THE INFORMATION CONTAINED IN THIS BOND ISSUE SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE ENTIRE OFFICIAL STATEMENT. POTENTIAL INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.

Issuer: City of Cleveland, Ohio Issue: $67,395,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A, consisting of (a) $15,940,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A-1 (Public Facilities Improvements), (b) $27,385,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A-2 (Bridges and Roadways Improvements), (c) $21,080,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A- 3 (Parks and Recreation Facilities Improvements), (d) $2,540,000* Subordinate Lien Income Tax Refunding Bonds, Series 2017A-4 (Revitalization Improvements), and (e) $450,000* Subordinate Lien Income Tax Refunding Bonds, Series 2017A-5 (Cemeteries Improvements). Dated Date: Date of Delivery Interest Payment Dates: Interest will be payable on April 1 and October 1 of each year, beginning October 1, 2017. Principal Payment Dates: October 1 in the years and amounts set forth on the inside front covers. Prior Redemption: [Optional Redemption. The Series 2017A Bonds maturing on and after October 1, 20__ are subject to prior redemption on and after October 1, 20__, by and at the sole option of the City, in whole or in part on any date at a redemption price of 100% of the principal amount redeemed plus accrued interest to the redemption date.]

Purpose: See “THE SERIES 2017A BONDS – Authorization and Purpose.” Security: The Series 2017A Bonds are special obligations of the City payable solely from the Revenues and the Pledged Funds as provided in the Indenture. The Revenues consist of the income tax collections of the City remaining after there has been paid to the Escrow Agent for the City’s unvoted General Obligation Bonds the amount required under the General Bond Ordinance to be withheld and paid to the Escrow Agent to provide for payment of debt service on those General Obligation Bonds, as further described below under “SECURITY AND SOURCES OF PAYMENT – Prior Pledge of Revenues to General Obligation Bonds.” The City grants a lien on the Revenues under the Trust Indenture as security for the payment of the Outstanding Bonds, the Series 2017A Bonds, and any additional Bonds issued and outstanding, from time to time, under the Trust Indenture. The City is permitted under the Trust Indenture to grant a lien on the Revenues as security for the payment of Parity Obligations, and that lien may be on a parity with the lien given as security for the payment of Bonds. See “APPENDIX A – SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE – Additional Bonds” and “– Parity Obligations.” The City covenants in the Trust Indenture to appropriate annually sufficient amounts from the income taxes to meet the debt charges on the outstanding unvoted General Obligation Bonds, the Bonds outstanding under the Trust Indenture, any Parity Obligations and the Unrestricted Income Tax Obligations. See “SECURITY AND SOURCES OF PAYMENT – Pension Bonds” for a description of the City’s Unrestricted Income Tax Obligations and their lien on the City’s income tax receipts. The City further covenants that so long as Bonds are outstanding under the Trust Indenture, it shall not repeal or amend, or suffer the repeal of, any ordinance for the levy or collection of its income taxes in any manner or to such extent that the City would not be able to meet its obligations to the Holders of the Bonds.

The Series 2017A Bonds are special obligations of the City and do not represent or constitute general obligation debt of the City or a pledge of the full faith and credit of the City. Holders of the Series 2017A Bonds do not have the right to have excises or taxes levied by the City, other than the City income tax, the State of Ohio or the taxing authority of any other political subdivision thereof for the payment of Debt Service on the Series 2017A Bonds.

Credit Rating: The Series 2017A Bonds are rated “A1” by Moody’s Investors Service and “AA+” by S&P Global Ratings.

Tax Matters: In the opinion of Squire Patton Boggs (US) LLP, Bond Counsel, under existing law (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the Series 2017A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Series 2017A Bonds is included in the calculation of a corporation’s adjusted current earnings for purposes of, and thus may be subject to, the corporate alternative minimum tax, and (ii) interest on, and any profit made on the sale, exchange or other disposition of, the Series 2017A Bonds are exempt from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax. Interest on the Series 2017A Bonds may be subject to certain federal taxes imposed only on certain corporations, including the corporate alternative minimum tax as a result of the inclusion of that interest in the calculation of a corporation’s adjusted current earnings for purposes of the corporate alternative minimum tax. For a more complete discussion of the tax aspects, see “TAX MATTERS” herein.

Legal Opinion: Squire Patton Boggs (US) LLP

Trustee and Bond Registrar: U.S. Bank National Association

Financial Advisors: Phoenix Capital Partners, LLP

Government Capital Management, L.L.C.

Book-Entry Only System: The Series 2017A Bonds will be initially issued as fully registered bonds, issuable under a book- entry only system, initially registered in the name of The Depository Trust Company (“DTC”) or its nominee. There will be no distribution of the Series 2017A Bonds to the ultimate purchasers. The Series 2017A Bonds in certificated form as such will not be transferable or exchangeable, except for transfer to another nominee of DTC or as otherwise described in this Official Statement. The principal of and interest on the Series 2017A Bonds will be payable by wire transfer made to DTC. See “APPENDIX C – BOOK-ENTRY ONLY SYSTEM.”

Delivery and Payment: It is expected that delivery of the Series 2017A Bonds in definitive form will be made through DTC on or about June ____, 2017. The Series 2017A Bonds will be released to the Underwriters against payment of the purchase price of the Series 2017A Bonds.

City Official: Questions concerning the Official Statement should be directed to Elizabeth C. Hruby, Assistant Secretary, Sinking Fund Commission, Department of Finance, 601 Lakeside Avenue, Cleveland, Ohio 44114. Telephone (216) 664-3663.

TABLE OF CONTENTS

Page

INTRODUCTION ...... 1 The City ...... 2 Purpose of the Series 2017A Bonds ...... 2 Terms of the Series 2017A Bonds ...... 2 Indenture ...... 2 Security for the Series 2017A Bonds ...... 3 Additional Bonds ...... 3 THE SERIES 2017A BONDS ...... 3 Authorization and Purpose ...... 3 Plan of Refunding ...... 5 Terms ...... 6 Transfer and Exchange of Series 2017A Bonds; Persons Treated as Owners ...... 6 Redemption ...... 6 Purchase in Lieu of Redemption ...... 8 Selection of Bonds to be Redeemed ...... 9 Notice of Call for Redemption ...... 9 Revision of Book-Entry System; Replacement Bonds ...... 9 SOURCES AND USES OF FUNDS ...... 10 DEBT SERVICE REQUIREMENTS ...... 11 SECURITY AND SOURCES OF PAYMENT ...... 11 General ...... 11 Prior Pledge of Revenues to General Obligation Bonds ...... 12 Covenants ...... 13 Pledged Funds ...... 13 Additional Bonds ...... 14 Outstanding Bonds ...... 15 Pension Bonds ...... 15 Debt Service Requirements and Pledged Taxes ...... 15 ENFORCEMENT OF REMEDIES ...... 17 THE CITY – GENERAL INFORMATION ...... 18 General Introduction ...... 18 City Government ...... 18 FINANCIAL MATTERS ...... 18 Budgeting, Tax Levy and Appropriations Procedures ...... 19 Financial Reports and Audits ...... 20 Summary of Major City Funds ...... 20 Summary of General Fund Cash Receipts and Expenditures – Non-GAAP Budgetary Basis ...... 21 General Fund Financial Budget for 2017 ...... 22 Management Discussion of the City’s Unaudited General Fund Results for the Fiscal Year Ended December 31, 2016 – Budget Basis ...... 24

General Fund Balances ...... 27 Management Discussion of Unaudited General Fund GAAP Basis Results for the Fiscal Year Ended December 31, 2016 ...... 27 Investment Policy ...... 28 THE CITY – MAJOR GENERAL FUND REVENUE SOURCES ...... 29 Municipal Income Taxes ...... 29 Local Government Fund (LGF)/Local Government Revenue Assistance Fund (LGRAF) ...... 30 Ad Valorem Property Taxes ...... 32 Overlapping Governmental Entities ...... 38 Tax Incentive Programs ...... 39 CITY DEBT AND OTHER OBLIGATIONS ...... 40 Debt Limitations ...... 40 Direct Debt Limitations ...... 40 Indirect Debt Limitation ...... 41 Debt Outstanding ...... 43 Overlapping Subdivisions – Millage Requirements ...... 43 Leases and Other Obligations ...... 44 Derivative Transactions Payable from General Fund ...... 44 Other Financings ...... 45 THE CITY – ECONOMIC AND DEMOGRAPHIC INFORMATION ...... 45 Population ...... 46 Employment ...... 46 Corporate Headquarters ...... 48 Home Values, Housing Units and Home Sales ...... 48 Building Permits ...... 49 Utilities ...... 49 Transportation ...... 49 Financial Services ...... 51 Education ...... 51 Health Care ...... 51 Recreation and Entertainment ...... 51 Downtown and Other Economic Development ...... 52 Housing and Neighborhood Development ...... 55 Brownfield Redevelopment ...... 57 Pension Obligations ...... 58 Employees ...... 59 Police and Fire Overtime ...... 60 LITIGATION ...... 60 LEGAL MATTERS ...... 61 TAX MATTERS ...... 62 Risk of Future Legislative Changes and/or Court Decisions ...... 63 Original Issue Discount and Original Issue Premium ...... 64 INDEPENDENT AUDITOR ...... 65 RATINGS ...... 65 FINANCIAL ADVISORS ...... 65

vii

UNDERWRITING ...... 65 VERIFICATION ...... 66 TRUSTEE ...... 66 CONTINUING DISCLOSURE CERTIFICATE ...... 66 CONCLUDING STATEMENT ...... 68 APPENDIX A SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE ...... A-1 Definitions ...... A-1 Security for the Bonds ...... A-9 Application of Revenues ...... A-9 Covenants of the City Concerning the Revenues ...... A-10 Additional Bonds ...... A-11 Parity Obligations ...... A-11 Annual Audit ...... A-12 Investment of Pledged Funds ...... A-12 Events of Default and Remedies ...... A-13 Amendments and Supplemental Indentures ...... A-15 Defeasance ...... A-15 Limitations on Enforceability of Remedies ...... A-15 APPENDIX B SUMMARY OF CERTAIN PROVISIONS OF THE GENERAL BOND ORDINANCE AND THE SINKING FUND ORDINANCE ...... B-1 Certain Definitions ...... B-1 Summary of the Codified Ordinances Relating to the Sinking Fund ...... B-2 Summary of Certain Provisions of the General Bond Ordinance and Sinking Fund Ordinance ...... B-6 APPENDIX C BOOK-ENTRY SYSTEM; DTC ...... C-1 APPENDIX D TEXT OF OPINION OF BOND COUNSEL ...... D-1 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE ...... E-1 APPENDIX F – SCHEDULE OF REFUNDED BONDS ...... F-1

viii

OFFICIAL STATEMENT

Relating to

City of Cleveland, Ohio $67,395,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A

Consisting of

$15,940,000* $27,385,000* $21,080,000* Subordinate Lien Income Tax Subordinate Lien Income Tax Subordinate Lien Income Tax Improvement and Refunding Improvement and Refunding Improvement and Refunding Bonds, Series 2017A-1 Bonds, Series 2017A-2 Bonds, Series 2017A-3 (Public Facilities Improvements) (Bridges and Roadways (Parks and Recreation Facilities Improvements) Improvements)

$2,540,000* $450,000* Subordinate Lien Income Tax Subordinate Lien Income Tax Refunding Bonds, Series 2017A-4 Refunding Bonds, Series 2017A-5 (Revitalization Improvements) (Cemeteries Improvements)

INTRODUCTION

The City of Cleveland, Ohio (the “City”) is furnishing this Official Statement, which includes the cover page, inside cover pages, and appendices hereto, to provide certain information in connection with the issuance and sale by the City of its $67,395,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A (the “Series 2017A Bonds”), consisting of its (a) $15,940,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A-1 (Public Facilities Improvements) (the “Series 2017A- 1 Bonds”), (b) $27,385,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A- 2 (Bridges and Roadways Improvements) (the “Series 2017A-2 Bonds”), (c) $21,080,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A-3 (Parks and Recreation Facilities Improvements) (the “Series 2017A-3 Bonds”), (d) $2,540,000* Subordinate Lien Income Tax Refunding Bonds, Series 2017A-4 (Revitalization Improvements) (the “Series 2017A-4 Bonds”), and (e) $450,000* Subordinate Lien Income Tax Refunding Bonds, Series 2017A-5 (Cemeteries Improvements) (the “Series 2017A-5 Bonds”). All terms, unless otherwise defined herein, shall have the meanings given to them in “APPENDIX A – SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE” and “APPENDIX B – SUMMARY OF CERTAIN PROVISIONS OF THE GENERAL BOND ORDINANCE AND THE SINKING FUND ORDINANCE.”

The Series 2017A Bonds are special obligations of the City. The payment of principal of, premium, if any, and interest on (“Debt Service”) the Series 2017A Bonds is secured by and payable solely from the Revenues and the Pledged Funds as provided under the Indenture. See “SECURITY FOR THE SERIES 2017A BONDS” and “SECURITY AND SOURCES OF PAYMENT.”

All financial and other information presented in this Official Statement relating to the City has been provided by the City from its records, except for information expressly attributed to other sources. The presentation of information, including tables of receipts from taxes and other sources, is intended to show recent historical information, and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. No representation is made that past experience, as shown by the financial and other information, will necessarily continue or be repeated in the future.

This Official Statement should be considered in its entirety and no one subject considered less important than another by reason of its location in the text. Descriptions of instruments, including, without

*Preliminary, subject to change. 1

limitation, the Series 2017A Bonds and the Indenture, are qualified by reference to the entire text of those instruments, and reference should be made to laws, reports or documents referred to in this Official Statement for more complete information regarding their content. Prior to issuance and delivery of the Series 2017A Bonds, copies of the Indenture and the Series 2017A Bond Legislation (defined below) may be obtained at the office of the City’s Department of Finance, 601 Lakeside Avenue, Cleveland, Ohio 44114, at cost to the requesting party; thereafter copies will be available for inspection at the designated corporate trust office of U.S. Bank National Association (the “Trustee”) at 1350 Euclid Avenue, Cleveland, Ohio 44115.

References to provisions of Ohio law, whether codified in the Ohio Revised Code (the “Revised Code”) or uncodified, or of the Ohio Constitution, are references to those provisions in effect on the date of this Official Statement. Those provisions may be amended, repealed or supplemented from time to time.

The City

The City is a municipal corporation and political subdivision of the State of Ohio (the “State” or “Ohio”). For detailed information relating to the City, see “THE CITY – General Information,” “FINANCIAL MATTERS,” “THE CITY – Major General Fund Revenue Sources,” “CITY DEBT AND OTHER OBLIGATIONS,” and “THE CITY – Economic and Demographic Information.”

Purpose of the Series 2017A Bonds

The proceeds of the Series 2017A Bonds will be used to (i) pay costs of certain municipal improvements, (ii) provide funds to advance refund certain Outstanding Bonds and (iii) pay the costs of issuance of each series of the Series 2017A Bonds and the costs of refunding the Refunded Bonds. See “THE SERIES 2017A BONDS – Authorization and Purpose.”

Terms of the Series 2017A Bonds

The Series 2017A Bonds will bear interest on their unpaid principal amounts payable on April 1 and October 1 of each year, commencing October 1, 2017 (each an “Interest Payment Date”), at the respective interest rates shown on the inside front cover pages of this Official Statement, and will be subject to redemption prior to maturity to the extent and as described herein. See “THE SERIES 2017A BONDS – Redemption.” Interest on the Series 2017A Bonds will accrue from one Interest Payment Date to, but not including, the next Interest Payment Date. Interest on the Series 2017A Bonds will be calculated on the basis of a 360-day year consisting of twelve 30-day months. See “THE SERIES 2017A BONDS – Terms.”

Indenture

The Series 2017A Bonds are issued under and secured by the Trust Indenture dated as of April 1, 2008, as amended by Section 6.1 of the Second Supplemental Trust Indenture dated as of June 1, 2010 (together, the “Trust Indenture”), as supplemented by the Ninth Supplemental Trust Indenture dated as of June 1, 2017 (the “Ninth Supplemental Indenture,” and together with the Trust Indenture, as it may be further supplemented and amended from time to time in accordance with its terms, the “Indenture”), each between the City and the Trustee. The Trust Indenture secures Outstanding Bonds, currently of several Series of Bonds. See “SECURITY AND SOURCES OF PAYMENT-Outstanding Bonds.” The Series 2017A Bonds, the Outstanding Bonds, and any additional Bonds that may be issued in the future as permitted under the Indenture are herein collectively referred to as the “Bonds.”

Security for the Series 2017A Bonds

The Series 2017A Bonds are special obligations of the City payable solely from the Revenues and the Pledged Funds as provided in the Indenture.

The Revenues consist of the income tax collections of the City remaining after there has been paid to the Escrow Agent for the City’s unvoted General Obligation Bonds the amount required under the General Bond Ordinance to be withheld and paid to the Escrow Agent to provide for payment of debt service on those General Obligation Bonds, as further described below under “SECURITY AND SOURCES OF PAYMENT – General.” The City grants a lien on the Revenues under the Trust Indenture as security for the payment of the Outstanding Bonds, the Series 2017A Bonds, and any additional Bonds issued and outstanding, from time to time, under the Trust Indenture. The City is permitted under the Trust Indenture to grant a lien on the Revenues as security for the payment of Parity Obligations, and that lien may be on a parity with the lien given as security for the payment of Bonds. See “APPENDIX A – SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE – Additional Bonds” and “– Parity Obligations.”

The City covenants in the Trust Indenture to appropriate annually sufficient amounts from the income taxes to meet the debt charges on the outstanding unvoted General Obligation Bonds, the Bonds outstanding under the Trust Indenture, any Parity Obligations and the Unrestricted Income Tax Obligations. See “SECURITY AND SOURCES OF PAYMENT – Pension Bonds” for a description of the City’s Unrestricted Income Tax Obligations and their lien on the City’s income tax receipts. The City further covenants that so long as Bonds are outstanding under the Trust Indenture, it shall not repeal or amend, or suffer the repeal of, any ordinance for the levy or collection of its income taxes in any manner or to such extent that the City would not be able to meet its obligations to the Holders of the Bonds.

The Series 2017A Bonds are special obligations of the City and do not represent or constitute general obligation debt of the City or a pledge of the full faith and credit of the City. Debt Service on the Series 2017A Bonds is payable solely from the Revenues and Pledged Funds as provided in the Indenture. Holders of the Series 2017A Bonds do not have the right to have excises or taxes, other than the City income tax, levied by the City, the State of Ohio, or the taxing authority of any other political subdivision of thereof for the payment of Debt Service on the Series 2017A Bonds.

Additional Bonds

Upon compliance with certain conditions set forth in the Trust Indenture, the City may issue additional series of Bonds or Notes and incur Parity Obligations payable on a parity with the Series 2017A Bonds with respect to Revenues. See “SECURITY AND SOURCES OF PAYMENT – Additional Bonds” and “APPENDIX A – Summary of Certain Provisions of the Trust Indenture.”

THE SERIES 2017A BONDS

Authorization and Purpose

The Series 2017A-1 Bonds are issued pursuant to Ordinance No. 1592-14, passed on December 8, 2014 by the Council of the City (“City Council”) (the “Refunding Ordinance”) and Ordinance No. 412-17 passed on April 24, 2017 by City Council, and the Certificate of Award authorized thereunder (together, the “Series 2017A-1 Bond Legislation”). The Series 2017A-2 Bonds are issued pursuant to the Refunding Ordinance and Ordinance No. 413-17 passed on April 24, 2017 by City Council, and the Certificate of Award authorized thereunder (together, the “Series 2017A-2 Bond Legislation”). The Series 2017A-3 Bonds are issued pursuant to the Refunding Ordinance and Ordinance No. 411-17 passed on April 24, 2017 by City Council, and the Certificate of Award authorized thereunder (together, the “Series 2017A-3 Bond

Legislation”). The Series 2017A-4 Bonds are issued pursuant to the Refunding Ordinance, and the Certificate of Award authorized thereunder (together the “Series 2017A-4 Bond Legislation”). The Series 2017A-5 Bonds are issued pursuant to the Refunding Ordinance, and the Certificate of Award authorized thereunder (together the “Series 2017A-5 Bond Legislation”, and collectively with the Series 2017A-1 Bond Legislation, the Series 2017A-2 Bond Legislation, the Series 2017A-3 Bond Legislation, and the Series 2017A-4 Bond Legislation, the “Series 2017A Bond Legislation”).

All Bonds are issued under the Ohio Constitution, the laws of the State, the Charter of the City (the “Charter”), and ordinances of City Council.

The Series 2017A Bonds are being issued to finance the costs of certain municipal improvements, advance refund the Refunded Bonds, and to pay costs of issuance of the Series 2017A Bonds and the costs of refunding the Refunded Bonds, as follows:

(a) The Series 2017A-1 Bonds are being issued to (i) improve facilities for the discharge of governmental functions or for services otherwise benefiting the public safety, health and welfare, including constructing, reconstructing, installing, renovating, enlarging and otherwise improving buildings, structures and other facilities in, of and for police stations, fire stations, training facilities, emergency medical centers, service stations, parking facilities, centers and other facilities, the provision of necessary fixtures, furnishings, equipment, information technology hardware and software, utilities, site improvements and appurtenances, the acquisition of vehicles, and the acquisition of any required real estate and interests in real estate and (ii) to refund the Series 2008A Refunded Bonds and the Series 2012 Refunded Bonds.

(b) The Series 2017A-2 Bonds are being issued to (ii) improve the municipal street system and related facilities, including streets, expressways, roadways, driveways, driveway approaches, sidewalks and pedestrian walkways, by acquiring, installing, constructing, reconstructing, improving, opening, extending, widening, grading, draining, paving, sealing, resurfacing, striping, lighting and curbing; removing and installing landscape plantings around streetscapes and sidewalks; installing on-street bicycle facilities, bicycle paths and lanes, bike parking facilities, sidewalks and related pedestrian improvements; constructing and improving culverts; constructing sanitary sewers, storm sewers and water lines; resetting and constructing catch basins and other storm water drainage facilities; constructing, reconstructing, replacing and renovating bridges; acquiring any real estate and interests in real estate, including easements, necessary for such purpose; acquiring and installing street lighting and signs, signals, markings and other equipment and devices for traffic control purposes, together with all necessary and incidental appurtenances and (ii) to refund the Series 2008B Refunded Bonds.

(c) The Series 2017A-3 Bonds are being issued to (i) provide funds to improve municipal parks and recreation facilities by constructing, reconstructing, installing, renovating, enlarging and otherwise improving parks and recreation centers and areas, pools, aquatic facilities, skating rinks, greenhouses, bicycle paths, playgrounds, playfields, basketball courts, tennis courts, baseball fields and other recreational tracks and fields, and related buildings, structures, walkways, pavement, safety surfaces and facilities, and providing necessary water systems, drainage, lighting, signage, fixtures, furnishings, equipment, safety modifications and site improvements, together with all necessary and incidental appurtenances and the acquisition of any required real estate and interests in real estate and the demolition of any existing buildings, structures, walkways and facilities and (ii) to refund the Series 2008C Refunded Bonds.

(d) The Series 2017A-4 Bonds are being issued to refund the Series 2008D Refunded Bonds.

(e) The Series 2017A-5 Bonds are being issued to refund the Series 2008E Refunded Bonds.

(f) The City may refund additional series of Outstanding Bonds or certain maturities of Outstanding Bonds if market conditions warrant such refunding on the pricing date.

Plan of Refunding

Application of the Refunding Proceeds

The City will use a portion the proceeds of the Series 2017A Bonds to advance refund at a lower interest cost certain of the City’s (i) Subordinate Lien Income Tax Bonds, Series 2008A (the “Series 2008A Refunded Bonds”), (ii) Subordinate Lien Income Tax Bonds, Series 2008B (the “Series 2008B Refunded Bonds”), (iii) Subordinate Lien Income Tax Bonds, Series 2008C (the “Series 2008C Refunded Bonds”), (iv) Subordinate Lien Income Tax Bonds, Series 2008D (the “Series 2008D Refunded Bonds”), (v) Subordinate Lien Income Tax Bonds, Series 2008E (the “Series 2008E Refunded Bonds”), and (vi) Subordinate Lien Income Tax Bonds, Series 2012 (the “Series 2012 Refunded Bonds”, and together with the Series 2008A Refunded Bonds, the Series 2008B Refunded Bonds, the Series 2008C Refunded Bonds, the Series 2008D Refunded Bonds, and the Series 2008E Refunded Bonds, the “Refunded Bonds”). See “APPENDIX F – SCHEDULE OF REFUNDED BONDS” for a description of the Refunded Bonds. The City may refund additional series of Outstanding Bonds or certain maturities of Outstanding Bonds if market conditions warrant such refunding on the pricing date.

The Series 2008A Bonds were issued on May 1, 2008 in the par amount of $26,360,000 to provide funds for improvements to facilities used for the discharge of governmental functions or for services otherwise benefiting public safety, health and welfare and are currently outstanding in the amount of $4,585,000. The Series 2008B Bonds were issued on May 1, 2008 in the par amount of $18,510,000 to pay costs of improving the municipal street system and related facilities, including streets, expressways, roadways, driveways, underground vaults, sidewalks and pedestrian walkways and are currently outstanding in the amount of $3,250,000. The Series 2008C Bonds were issued on May 1, 2008 in the par amount of $6,295,000 to pay costs of improving municipal parks and recreation facilities and are currently outstanding in the amount of $2,830,000. The Series 2008D Bonds were issued on May 1, 2008 in the par amount of $6,180,000 to pay costs of revitalizing lands in the City and the clearance, remediation and cleanup of those lands and are currently outstanding in the amount of $2,785,000. The Series 2008E Bonds were issued on May 1, 2008 in the par amount of $2,215,000 to pay costs of improving municipal cemetery facilities, buildings, structures and grounds and are currently outstanding in the amount of $545,000. The Series 2012 Bonds were issued on November 29, 2012 in the par amount of $15,180,000 to provide funds for improvements to facilities used for the discharge of governmental functions or for services otherwise benefiting public safety, health and welfare and are currently outstanding in the amount of $13,575,000.

Refunding of the Refunded Bonds

Proceeds from the sale of the Series 2017A Bonds that will be used to advance refund the Refunded Bonds will be deposited in an Escrow Fund held by U.S. Bank National Association as escrow trustee (the “Escrow Trustee”), pursuant to an Escrow Agreement between the City and the Escrow Trustee dated June __, 2017 (the “Escrow Agreement”). The money deposited in the Escrow Fund will be (a) held in cash to the extent not needed to make the investments described in (b) below, and (b) invested in direct obligations of or obligations guaranteed as to payment by the United States (within the meaning of Section 133.34(D) of the Revised Code) that mature or are subject to redemption by and at the option of the holder, in amounts sufficient, together with any uninvested cash in the Escrow Fund but without further investment or reinvestment, for the (i) payment of interest on the Refunded Bonds when due on each interest payment date prior to their applicable maturity date or prior optional redemption date, and (ii) payment of the principal amount of and interest on the

Refunded Bonds upon their applicable maturity date or prior optional redemption date (as set forth in “APPENDIX F”). The Refunded Bonds will be redeemed at maturity or pursuant to prior optional redemption at a redemption price equal to 100% of the principal amount redeemed, plus interest accrued to the redemption date.

Terms

The Series 2017A Bonds will be issued under the Indenture in the aggregate principal amounts set forth on the inside cover pages of this Official Statement. The Series 2017A Bonds will be dated their date of delivery, will bear interest from that date as described herein, payable semi-annually on each Interest Payment Date commencing October 1, 2017, and will mature on October 1 in the years and in the principal amounts set forth on the inside cover pages of this Official Statement. Interest on the Series 2017A Bonds will be calculated on the basis of a 360-day year consisting of twelve 30-day months. Certain of the Series 2017A Bonds will be subject to optional redemption prior to maturity as described below. See “THE SERIES 2017A BONDS – Redemption.”

Interest on the Series 2017A Bonds will be payable by check or draft mailed or delivered on the Interest Payment Date to Holders registered at the close of business on the last day of the calendar month next preceding that Interest Payment Date; provided that, so long as the Series 2017A Bonds are registered in the name of Cede & Co., as nominee of DTC, such payments will be made directly to DTC. See “APPENDIX C – BOOK- ENTRY ONLY SYSTEM.”

The Series 2017A Bonds will be issued as fully registered bonds, initially in a book-entry only system, registered in the name of Cede & Co., as nominee of DTC. Purchases of beneficial interests in the Series 2017A Bonds will be made in book-entry form in denominations of $5,000 and whole multiples thereof. If at any time the book-entry only system is discontinued, the Series 2017A Bonds will be exchangeable for other fully registered certificated Series 2017A Bonds in any Authorized Denominations. See “APPENDIX C – BOOK- ENTRY ONLY SYSTEM.” The Trustee may impose a charge sufficient to reimburse the City or the Trustee for any tax, fee or other governmental charge required to be paid with respect to such exchange or any transfer of a Series 2017A Bond. The cost, if any, of preparing each new Series 2017A Bond issued upon such exchange or transfer, and any other expenses of the City or the Trustee incurred in connection therewith, will be paid by the person requesting that exchange or transfer.

Transfer and Exchange of Series 2017A Bonds; Persons Treated as Owners

The person in whose name any Series 2017A Bond is registered will be deemed and regarded as the absolute owner thereof for all purposes, and payment of principal of or interest thereon will be made only to or upon the order of the registered owner thereof or his or her legal representative. All such payments will be valid and effective to satisfy and discharge the liability upon that Series 2017A Bond to the extent of the sum or sums so paid.

So long as the Series 2017A Bonds are held in book-entry form, transfers of the Series 2017A Bonds by beneficial owners may be made only as described in “APPENDIX C – BOOK-ENTRY ONLY SYSTEM.” At any other time, any Series 2017A Bonds may be transferred or exchanged only upon the books kept for the registration and transfer of Series 2017A Bonds as provided in the Indenture.

[Redemption

Certain of the Series 2017A Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as follows:

Optional Redemption. The Series 2017A Bonds maturing on and after October 1, 20__ are subject to prior redemption on and after October 1, 20__, by and at the sole option of the City, in whole or in part on any date at a redemption price of 100% of the principal amount redeemed plus accrued interest to the redemption date.

Mandatory Sinking Fund Redemption. The Series 2017A-1 Bonds maturing on October 1, 20__ will be subject to mandatory redemption prior to maturity at a redemption price of 100% of the principal amount thereof to be redeemed, plus interest accrued to the redemption date in the following principal amounts in the years specified:

Year Amount

The remaining $______principal amount of the Series 2017A-1 Bonds due October 1, 20__ will be payable at maturity.

The Series 2017A-2 Bonds maturing on October 1, 20__ will be subject to mandatory redemption prior to maturity at a redemption price of 100% of the principal amount thereof to be redeemed, plus interest accrued to the redemption date in the following principal amounts in the years specified:

Year Amount

The remaining $______principal amount of the Series 2017A-2 Bonds due October 1, 20__ will be payable at maturity

The Series 2017A-3 Bonds maturing on October 1, 20__ will be subject to mandatory redemption prior to maturity at a redemption price of 100% of the principal amount thereof to be redeemed, plus interest accrued to the redemption date in the following principal amounts in the years specified:

Year Amount

The remaining $______principal amount of the Series 2017A-3 Bonds due October 1, 20__ will be payable at maturity

The Series 2017A-4 Bonds maturing on October 1, 20__ will be subject to mandatory redemption prior to maturity at a redemption price of 100% of the principal amount thereof to be redeemed, plus interest accrued to the redemption date in the following principal amounts in the years specified:

Year Amount

The remaining $______principal amount of the Series 2017A-3 Bonds due October 1, 20__ will be payable at maturity

The Series 2017A-5 Bonds maturing on October 1, 20__ will be subject to mandatory redemption prior to maturity at a redemption price of 100% of the principal amount thereof to be redeemed, plus interest accrued to the redemption date in the following principal amounts in the years specified:

Year Amount

The remaining $______principal amount of the Series 2017A-3 Bonds due October 1, 20__ will be payable at maturity]]

Purchase in Lieu of Redemption

The City has the option to purchase any Series 2017A Bonds that are redeemable by optional redemption at a purchase price no less than the redemption price required to be paid to bondholders upon optional redemption. The City may exercise purchase in lieu of redemption by written notice from the Director of Finance to the Trustee.

Selection of Bonds to be Redeemed

If fewer than all outstanding Series 2017A Bonds are called for optional redemption at one time, they will be called as selected by and selected in a manner determined by the Director of Finance and in whole multiples of $5,000. If fewer than all of the Series 2017A Bonds (when issued in certificated form) of a single maturity and interest rate are to be redeemed, the selection of Series 2017A Bonds (or portions of Series 2017A Bonds in whole multiples of $5,000) to be redeemed will be made by the Trustee by lot in a manner determined by the Trustee.

If less than all of the Series 2017A Bonds of one maturity and interest rate under a book-entry only system are to be called for redemption, the Trustee will give notice of redemption only to DTC or its nominee as registered owner. The selection of the book-entry interests in that Series 2017A Bond to be redeemed, and notice of call to the owners of those interests called, is the responsibility of DTC pursuant to its rules and procedures and its Participants and Indirect Participants. See “APPENDIX C – BOOK-ENTRY ONLY SYSTEM.”

In the case of a partial redemption by lot when Series 2017A Bonds of denominations greater than $5,000 are then outstanding, each $5,000 unit of principal will be treated as though it were a separate Series 2017A Bond of the denomination of $5,000.

Notice of Call for Redemption

The Trustee is to cause notice of the call for redemption, identifying the Series 2017A Bonds or portions of Series 2017A Bonds to be redeemed, to be sent by first class mail, postage prepaid, at least thirty (30) days prior to the date fixed for redemption, to the registered owner of each Series 2017A Bond subject to redemption in whole or in part at the registered owner’s address shown on the Register at the close of business on the 15th day preceding that mailing. Any defect in the notice or any failure to receive notice by mailing will not affect the validity of any proceedings for the redemption of any Series 2017A Bond.

Notice having been mailed in the manner provided, on the date designated for redemption, the Series 2017A Bonds and portions thereof called for redemption shall become due and payable. If the Trustee then holds sufficient moneys for the redemption of all the Series 2017A Bonds and portions thereof to be redeemed, together with interest accrued thereon to the redemption date, interest on each Series 2017A Bond (or portion of a Series 2017A Bond) so called for redemption will cease to accrue on that date.

So long as all Series 2017A Bonds are held under a book-entry only system by a securities depository (such as DTC), call notice is sent by the Trustee only to the depository or its nominee. Selection of book-entry interests in the Series 2017A Bonds called, and notice of the call to the owners of those interests called, are the responsibilities of DTC (or any successor securities depository) pursuant to its rules and procedures, and of its participants. Any failure of DTC (or any successor securities depository) to advise any participant to notify the book-entry interest owners, of any such notice and its content or effect will not affect the validity of any proceedings for the redemption of any Series 2017A Bonds. See “APPENDIX C – BOOK-ENTRY ONLY SYSTEM.”

Revision of Book-Entry System; Replacement Bonds

The Indenture provides for issuance of fully registered Series 2017A Bonds (“Replacement Bonds”) directly to owners of Series 2017A Bonds other than DTC or its nominee only in the event that DTC determines not to continue to act as securities depository for the Series 2017A Bonds.

Upon occurrence of this event, the City may in its discretion attempt to have established a securities depository book-entry relationship with another securities depository. If the City does not do so, or is unable

to do so, and after the Trustee has made provisions for notification of the owners of book-entry interests in the Series 2017A Bonds by appropriate notice to DTC, the City and the Trustee will authenticate and deliver Replacement Bonds for the Series 2017A Bonds, in fully registered form, in Authorized Denominations for the Series 2017A Bonds. If the elimination of a securities depository book-entry system for the Series 2017A Bonds is not the result of City action or inaction, the delivery of Replacement Bonds will be at the expense (including printing costs) of any persons requesting issuance of Replacement Bonds.

Replacement Bonds will be exchangeable for fully registered Series 2017A Bonds of any denomination or denominations authorized by the Indenture in the aggregate principal amount not exceeding the unmatured and unredeemed principal amount of those Series 2017A Bonds and bearing interest at the same rate and maturing on the same date. Replacement Bonds will be transferable at the designated office of the Trustee or any Authentication Agent, without charge (except any tax, fee, or other governmental charge required to be paid). Exchange or transfer of then redeemable Replacement Bonds is not required to be made (a) during the 15 days preceding the date of a selection of Replacement Bonds to be redeemed, or (b) of a particular Replacement Bond selected for redemption (in whole or part). See “APPENDIX C – BOOK-ENTRY ONLY SYSTEM.”

SOURCES AND USES OF FUNDS

The following table sets forth the estimated sources and uses of funds in connection with the Series 2017A Bonds:

Total Series 2017A Bonds Sources of Funds: Principal Amount $67,395,000.00* Net Original Issue Premium Transfer from Debt Service Fund Total Sources

Uses of Funds: Deposit to Escrow Account Deposit to Project Fund Deposit to Costs of Issuance Fund(a) Deposit to Debt Service Fund(b) Total Uses

(a) The Costs of Issuance includes the amount necessary to pay costs of issuance of the Series 2017A Bonds and costs of refunding the Refunded Bonds, which includes underwriting discount, legal, printing, advisory and rating agency fees, verification, financial and other miscellaneous fees and expenses. See “UNDERWRITING.” (b) This amount represents capitalized interest on the Series 2017A Bonds.

(BALANCE OF PAGE INTENTIONALLY LEFT BLANK)

*Preliminary, subject to change.

DEBT SERVICE REQUIREMENTS

The table below sets forth the debt service on the Outstanding Bonds.

Year Ending Debt Service on the Principal on the Series Interest on the Total Debt Service December 31 Outstanding 2017A Series 2017A on the Bonds Bonds(a) Bonds Bonds

2017 $21,579,238 2018 21,834,017 2019 21,815,506 2020 21,501,723 2021 19,841,506 2022 19,796,020 2023 19,669,751 2024 19,628,817 2025 21,504,559 2026 21,516,818 2027 24,360,864 2028 24,322,780 2029 24,294,196 2030 24,312,380 2031 17,098,395 2032 12,390,275 2033 10,836,238 2034 10,831,169 2035 10,830,432 2036 10,351,131 2037 10,353,857 2038 4,545,750 2039 2,302,500 2040 2,301,750 2041 2,301,250 2042 2,300,750 TOTAL $402,421,672

(a) Gross amount of debt service prior to the issuance of the Series 2017A Bonds and the refunding of the Refunded Bonds and without adjustment for any Subsidy Payments. See “SECURITY AND SOURCES OF PAYMENT – Debt Service Requirements and Pledged Taxes.”

SECURITY AND SOURCES OF PAYMENT

General

The Series 2017A Bonds are special obligations of the City payable solely from the Revenues and the Pledged Funds as provided in the Indenture. The Series 2017A Bonds are not general obligation debt of the City or a pledge of the full faith and credit of the City.

The Revenues consist of the income tax receipts of the City remaining after there has been paid to the Escrow Agent for the City’s unvoted General Obligation Bonds the amount required under the General Bond Ordinance to be withheld and paid to the Escrow Agent to provide for payment of debt service on those General Obligation Bonds.

The City income tax is imposed on net profits from the operations of a business or profession, on gross salaries and wages earned in the City by non-residents of the City, and on gross salaries, wages and other compensation of City residents earned within or outside the City. The tax is currently levied at the rate of 2.5% since January 1, 2017. Prior to that date, the tax was levied at the rate of 2.0%. The income tax liability of a

City resident employed outside the City is reduced by a credit equal to 50% of the tax paid to the municipality in which the City resident is employed. One-ninth of the receipts of the total 2.5% tax must be used only for capital improvements or debt service on obligations issued for capital improvements or for the payment of past deficits during any fiscal emergency period as defined by State law. The remaining eight-ninths of the receipts of the municipal income tax are unrestricted and may also be used for debt service. See “THE CITY – Major General Fund Revenue Sources – Municipal Income Taxes.”

The Central Collection Agency, within the City’s Division of Taxation, is the collector of the municipal income taxes of the City. Under the General Bond Ordinance, the Central Collection Agency must disburse directly to the Escrow Agent each month the total amount of the City’s income tax receipts scheduled to be paid into the Sinking Fund in that month, as described below, before the Central Collection Agency may disburse any of the City’s income tax receipts to other funds of the City.

The City’s audited income tax receipts for 2015 (collected at the rate of 2.0%), presented on a budget basis of accounting, totaled approximately $347,565,000. Of that amount, $14,500,000 was applied to the payment of debt service on the City’s unvoted General Obligation Bonds, after ad valorem property tax receipts, investment earnings on Sinking Fund accounts, and other lawfully available moneys were applied for that purpose. $13,982,000 was applied to the payment of debt service on the Outstanding Bonds.

The City’s unaudited income tax receipts for 2016 (collected at the rate of 2.0%), presented on a budget basis of accounting, totaled approximately $354,151,000. Of that amount, $11,000,000 was applied to the payment of debt service on the City’s unvoted General Obligation Bonds, after ad valorem property tax receipts, investment earnings on Sinking Fund accounts, and other lawfully available moneys were applied for that purpose. Of the remaining amount, $16,070,000 was applied to the payment of debt service on the Outstanding Bonds.

Prior Pledge of Revenues to General Obligation Bonds

The General Bond Ordinance constitutes the basic security document for the City’s unvoted General Obligation Bonds issued since 1980. In the General Bond Ordinance, the City has pledged the City income tax receipts to the extent required to pay debt service charges on the unvoted General Obligation Bonds. That pledge is a first lien and is prior to the pledge given to secure Bonds issued under the Trust Indenture.

The City agrees in the General Bond Ordinance to have an Escrow Agent hold the City’s Sinking Fund into which the City deposits ad valorem property taxes and, to the extent necessary, income taxes for the payment of the unvoted General Obligation Bonds. The Escrow Agent is The Huntington National Bank. The City deposits with the Escrow Agent income tax receipts in amounts and at times sufficient to supplement the unvoted ad valorem property taxes deposited with the Escrow Trustee. The amounts to be deposited are determined in the budgeting process and are subject to adjustment as needed.

The General Bond Ordinance requires the City to prepare a schedule that itemizes on a monthly basis the monies, exclusive of the income tax receipts, available for payment of debt service on the unvoted General Obligation Bonds and the amounts payable each month as debt service on the unvoted General Obligation Bonds (the “Schedule”). The Schedule is required to identify any deficiency in non-income tax revenues available for debt service payments on unvoted General Obligation Bonds and to indicate the funding of any such deficiency by equal monthly deposits of income tax receipts. The Schedule is required to be amended by the City as necessary.

The Schedule for 2017 calls for the City to deposit $11,000,000 of income tax receipts to the Sinking Fund for payment of debt service on unvoted General Obligation Bonds.

The City must monitor its actual performance in comparison with the Schedule, and if receipts, other than income taxes, expected to be deposited to the Sinking Fund are less than estimated, or the debt service requirements payable therefrom exceed the budgeted amounts, the Director of Finance is required to certify a revised schedule to the Central Collection Agency, increasing the deposits of income tax receipts accordingly.

Covenants

The City covenants in the Trust Indenture, for so long as any Bonds are outstanding under the Trust Indenture, not to repeal or amend, or suffer the repeal or amendment of, any ordinance for the levy or collection of its income taxes in any manner or to such extent that the City would not be able to meet its obligations to the Holders of the Bonds, including the Series 2017A Bonds. See “APPENDIX A – SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE.”

The City further covenants not to assign the Revenues or create or authorize to be created any debt, lien, security interest or charge thereon, other than the security interest given in the General Bond Ordinance, the security interest given under the Trust Indenture, the security interest given to secure the Parity Obligations described below, and the security interests permitted to be given to secure Unrestricted Income Tax Obligations. See “APPENDIX A – SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE.”

The City will appropriate in its annual appropriation measure for each fiscal year (including any temporary appropriation measure) Revenues in an amount sufficient to pay the Debt Service Charges on the unvoted General Obligation Bonds identified in the Schedule to be paid from income tax receipts and all Debt Service Charges on the Outstanding Bonds under the Trust Indenture, any Parity Obligations, and the Unrestricted Tax Obligations due and payable during the then current fiscal year as provided in the Trust Indenture. In the event that 10 days prior to any Interest Payment Date the amount in the Debt Service Fund is not sufficient to pay Debt Service Charges due and payable on that Interest Payment Date, the City immediately will, if necessary, make a supplemental appropriation for, and will deposit into the Debt Service Fund, an amount sufficient to make up any such deficiency. See “APPENDIX A – SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE.”

Pledged Funds

The Trust Indenture establishes the Debt Service Fund in the custody of the Trustee. The City is required to make monthly payments from the Revenues to the Debt Service Fund to provide for the payment of Debt Service Charges when due. Those payments are to be in amounts such that if the same amount were paid in each of the months preceding the next Interest Payment and Principal Payment Date, the aggregate of the amounts so paid would be sufficient to pay the interest and principal due and payable on all outstanding Bonds on the next payment date. Amounts in the Debt Service Fund will be used solely for the payment of Debt Service Charges on the Bonds.

The Trust Indenture permits the establishment in the custody of the Trustee of a Debt Service Reserve Fund for any series of Bonds. Provision is to be made in the Supplemental Indenture for the respective series for the amount of any such reserve and for the deposit of Revenues to establish and maintain the required reserve. No Debt Service Reserve Fund is established for the Series 2017A Bonds, and none was established for any other Series of Outstanding Bonds.

References in this Official Statement to the Pledged Funds means (a) with respect to the Series 2017A Bonds and the Outstanding Bonds, the Debt Service Fund, and (b) with respect to any additional Bonds for which provision is made in a Supplemental Indenture for a Debt Service Reserve Fund, the Debt Service Fund and the Debt Service Reserve Fund. For a further description of the establishment of Funds and Accounts and

the application of Funds under the Trust Indenture, see “APPENDIX A – SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE.”

Additional Bonds

Upon compliance with certain conditions set forth in the Trust Indenture, the City may issue additional Bonds payable on a parity with the Series 2017A Bonds and the Outstanding Bonds with respect to Revenues and Pledged Funds. See “APPENDIX A – SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE.” Prior to issuing any additional Bonds, the Trustee must receive from the City, among other things, a certificate of the Director of Finance of the City to the effect that the highest aggregate Annual Debt Service Requirement in the current or any subsequent Year for all Outstanding General Obligation Bonds, all Bonds and Notes Outstanding under the Trust Indenture, any outstanding Parity Obligations, any outstanding Unrestricted Income Tax Obligations, and the Bonds proposed to be issued does not exceed 50% of the income tax collections for the most recently completed Year for which audited financial statements are available, adjusted for any subsequent change in the City’s rate of income tax.

For purposes of the above calculation, the Trust Indenture provides that Annual Debt Service Requirements on Outstanding General Obligation Bonds will be net of the amount of ad valorem property taxes pledged under the General Bond Ordinance to the payment of the unvoted General Obligation Bonds, as shown in the audited financial statements used for making that calculation, adjusted for any subsequent change in the rate of those taxes. Such Annual Debt Service Requirements also will be net of any grants or payments made to the City by the federal or Ohio governments for the payment of debt service on the outstanding obligations included in the calculation, such as the Subsidy Payments made with respect to certain subseries of the Series 2010 Bonds, as described below. See “SECURITY AND SOURCES OF PAYMENT – Debt Service Requirements and Pledged Taxes.” If Bonds are to be issued for the purpose of refunding any outstanding Bonds, the Annual Debt Service Requirements of the refunding Bonds will be used in lieu of the Annual Debt Service Requirements of the Bonds being refunded. See “APPENDIX A – SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE.”

The City may issue Notes in anticipation of the issuance of Bonds subject to the same requirements in the Trust Indenture for the issuance of additional Bonds. As permitted by Revised Code Section 133.22, Notes may bear interest at variable rates.

Upon compliance with certain conditions set forth in the Trust Indenture, the City may issue or incur Parity Obligations payable from, and secured on a parity with the Bonds with respect to the pledge of and security interest in the Revenues. However, any Parity Obligations will not be protected or secured by the Pledged Funds. See “APPENDIX A – SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE.”

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Outstanding Bonds

The Outstanding Bonds currently consist of the following:

Series SubSeries Outstanding Original Par Amount Amount Outstanding 2008 2008A, B, C, D, E $59,560,000 $13,995,000 2010 2010A-2, B, C 27,380,000 20,680,000 2012 N/A 15,180,000 13,575,000 2013A 2013A-1, A-2, A-3 35,840,000 31,385,000 2014A 2014A-1, A-2, A-3 31,460,000 30,585,000 2014B 2014B-1, B-2, B-3 37,740,000 34,390,000 2015A 2015A-1, A-2, A-3, A-4 86,105,000 86,105,000 2015B 2015B-1, B-2, B-3, B-4, B-5 27,445,000 27,445,000

Pension Bonds

On August 6, 2008, the City issued $59,960,000 Subordinate Lien Unrestricted Income Tax Bonds, Series 2008 (Police and Fire Pension Payment), now outstanding in the principal amount of $3,985,000 (the “Series 2008 Pension Bonds”), and on November 18, 2015, the City issued $28,975,000 Subordinate Lien Unrestricted Income Tax Refunding Bonds, Series 2015 (Police and Fire Pension Payment), now outstanding in the principal amount of $28,975,000 (the “Series 2015 Pension Bonds” and together with the Series 2008 Pension Bonds, the “Pension Bonds”), payable from and secured by a lien on the unrestricted income tax receipts of the City remaining after any payment from the unrestricted income tax receipts of debt service on the City’s unvoted General Obligation Bonds (the “Pledged Unrestricted Income Taxes”). The unrestricted income tax receipts consist of the gross income tax receipts of the City net of the amount restricted by Chapter 191 of the Codified Ordinances of the City to the payment of capital expenditures. One-ninth of the City’s 2.5% income tax is so restricted, with eight-ninths being unrestricted.

The Series 2008 Pension Bonds were issued for the purpose of currently refunding special obligations issued by the City in 1994 to fund a payment to the Police and Fire Pension Fund of the State of Ohio in satisfaction at a reduced amount of certain obligations of the City for employer’s accrued liability to that Pension Fund. The Series 2008 Pension Bonds also funded a termination payment with respect to one of two hedge agreements the City entered into with respect to the 1994 obligations. See “CITY DEBT AND OTHER OBLIGATIONS – Derivative Transactions Payable from the General Fund.” The Series 2015 Pension Bonds were issued for the purpose of advance refunding certain of the Series 2008 Pension Bonds. The Pension Bonds were issued under authority of Section 3 of Article XVIII of the Ohio Constitution, Section 717.07 of the Revised Code, the Charter of the City, and ordinances of City Council. The City’s obligations under the remaining hedge agreement are also secured by a pledge of the Pledged Unrestricted Income Taxes.

The agreements of the City relating to the Pension Bonds and the related hedge permit the City to grant a parity lien on the Pledged Unrestricted Income Taxes as security for parity obligations. Bonds issued under the Trust Indenture, including the Series 2017A Bonds, are permitted parity obligations within the meaning of those agreements.

Debt Service Requirements and Pledged Taxes

As indicated above, ad valorem property taxes and the City’s income taxes are pledged for the payment of debt service on all of the City’s unvoted General Obligation Bonds. In addition, the City’s unrestricted income taxes are pledged to the payment of the Pension Bonds, on a basis subordinate to the pledge given as

security for the unvoted General Obligation Bonds and on a parity basis with the pledge given as security for the Bonds. Set forth below are actual debt service requirements on the unvoted General Obligation Bonds, the Pension Bonds, and the Outstanding Bonds and historical, unaudited 2016 and budgeted 2017 amounts of receipts from municipal income taxes, all presented on a budget basis of accounting. The General Bond Ordinance does not require the City to meet any specific debt service coverage test with respect to the issuance of additional unvoted General Obligation Bonds. However, the City must comply with applicable State law debt limitations for unvoted tax-supported general obligations. See “CITY DEBT AND OTHER OBLIGATIONS – Indirect Debt Limitation.”

DEBT SERVICE AND PLEDGED TAXES -BUDGET BASIS Actual Unaudited Budgeted 2012 2013 2014 2015 2016 2017 Income Tax Collections $326,783,000 $338,229,000 $334,264,000 $347,565,000 $354,151,000 $447,005,000 General Obligation Debt Service Paid from Income Taxes (19,500,000) (15,600,000) (16,000,000) (14,500,000) (11,000,000) (11,000,000) Net Income Tax Collections Available for Debt Service $307,283,000 $322,629,000 $318,264,000 $333,065,000 $343,151,000 $436,005,000 Pension Bonds Debt Service $5,601,950 $5,600,450 $5,601,200 $5,598,825 $5,451,927 $4,020,875 Outstanding Bonds Debt Service(a) 6,981,021 8,247,550 12,355,149 16,687,088 20,058,286 21,579,238(b) Series 2017A Bonds(c) N/A N/A N/A N/A N/A 1,000,000 Total Subordinate Lien Debt Service $12,582,971 $13,848,000 $17,956,349 $22,285,913 $25,510,213 $26,600,113 Coverage 24.42 23.30 17.72 14.95 13.45 16.39 (a) Debt service numbers do not reflect the receipt of any Subsidy Payments, as described below, with respect to the various subseries of Series 2010 Bonds. (b) Prior to the issuance of the Series 2017A Bonds or the refunding of the Refunded Bonds. (c) Estimated partial year debt service on the new money portion of the Series 2017A Bonds as reflected in the budget approved prior to the sale of the Series 2017A Bonds. See "DEBT SERVICE REQUIREMENTS."

The Series 2010A-2 Bonds were designated as Build America Bonds (“BABs”) and the Series 2010B Bonds and the Series 2010C Bonds were designated as Recovery Zone Economic Development Bonds (“RZEDBs”) under provisions of the Internal Revenue Code. As BABs and RZEDBs, the City is to receive interest subsidy payments equal to a percentage of the interest payable on those subseries directly from the federal government (“Subsidy Payments”).

The Subsidy Payments have been and continue to be subject to change. The City originally expected to receive and originally did receive Subsidy Payments amounting to 35% of each interest payment on the Series 2010A-2 Bonds and 45% of each interest payment on the Series 2010B Bonds and Series 2010C Bonds. However, the federal budget sequestration reduced the Subsidy Payments beginning with its October 1, 2013 interest payments. The Subsidy Payments allocable to the 2016 interest payments were reduced by 6.8%. The Subsidy Payments allocable to the 2017 interest payments are expected to be reduced by 6.9%. It is not known whether the federal government will continue to reduce such Subsidy Payments through and after the end of the federal 2017 fiscal year (September 30, 2017).

The City has not pledged the Subsidy Payments as security for the Series 2010 Bonds but has covenanted to deposit any Subsidy Payments it receives into the Debt Service Fund, and any Subsidy Payments received by the City are taken into account in a calculation required before the issuance of additional Bonds.

See “SECURITY AND SOURCES OF PAYMENT – Additional Bonds.” Amounts shown as debt service on the Series 2010 Bonds in this Official Statement are not net of Subsidy Payments.

ENFORCEMENT OF REMEDIES

The exercise by the Trustee of remedies upon the occurrence and continuance of an Event of Default under the Trust Indenture is subject to the rights of the trustee for the General Obligation Bonds to enforce and protect the first lien on the income tax receipts of the City given as security for the payment of Debt Service Charges on the City’s unvoted General Obligation Bonds. Subject to that limitation, the Trustee may pursue any available remedy to enforce the payment of Debt Service Charges on the Bonds, including the Series 2017A Bonds, and the performance by the City of its covenants under the Trust Indenture. A Holder of Series 2017A Bonds does not have the right to institute proceedings for enforcement of the Trust Indenture unless the Trustee shall have failed to exercise remedies after having been directed to do so by the Holders of at least 25% of the Aggregate Principal Amount of Bonds then outstanding under the Trust Indenture and having been offered indemnity as provided in the Trust Indenture. See “APPENDIX A – SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE – Events of Default and Remedies.”

Federal and State laws provide procedures for the adjustment of indebtedness of political subdivisions, such as the City. Chapter 9 of the U.S. Bankruptcy Code would permit the City to make such an adjustment if (i) it were “insolvent” (i.e., the City was not paying its debt charges as they came due or it was unable to pay those debt charges as they became due), (ii) it met certain other criteria (e.g., having negotiated in good faith with its creditors and failed to reach agreement or such negotiation was impractical because of time restrictions, the number of creditors or other reasons) and (iii) it is authorized under State law (by legislation or by a governmental officer) to seek relief under Chapter 9. The State’s Uniform Public Securities Law provides that the City or other subdivision must obtain the approval of the State Tax Commissioner in order to file a bankruptcy petition stating that it is insolvent and “that it desires to effect a plan for the composition or adjustment of its debts and to take such further proceedings” under the Bankruptcy Code. That law also states:

“No taxing subdivision shall be permitted, in availing itself of such acts of congress [the Bankruptcy Code], to scale down, cut down, or reduce the principal sum of its securities, except that interest thereon may be reduced in whole or in part.” (Section 133.36 of the Revised Code.)

The County may also initiate proceedings under the Bankruptcy Code. Because it collects, distributes, or otherwise provides revenues to the City, the City’s financial condition could be affected by such action.

The State has pledged to and agreed with holders of securities such as the Series 2017A Bonds that

“…the State will not, by enacting any law or adopting any rule, repeal, revoke, repudiate, limit, alter, stay, suspend, or otherwise reduce, rescind, or impair the power or duty of a subdivision to exercise, perform, carry out, and fulfill its responsibilities or covenants under this Chapter [133, the State’s Uniform Public Securities Law] or legislation or agreements as to its Chapter 133. securities, including a credit enhancement facility, passed or entered into pursuant to this chapter, or repeal, revoke, repudiate, limit, alter, stay, suspend, or otherwise reduce, rescind, or impair the rights and remedies of any such holders fully to enforce such responsibilities, covenants, and agreements or to enforce the pledge and agreement of the State contained in this division, or otherwise exercise any sovereign power materially impairing or materially inconsistent with the provisions of such legislation, covenants, and agreements.” (Section 133.25(D) of the Revised Code)

THE CITY – GENERAL INFORMATION

General Introduction

The City is a municipal corporation and political subdivision of the State of Ohio (the “State” or “Ohio”). It is located on the southern shore of Lake Erie and is the county seat of Cuyahoga County (the “County”) in northeastern Ohio. The City was incorporated as a village in 1814 and became a city in 1836.

City Government

The City operates under and is governed by the Charter, which was first adopted by the voters in 1913 and has been and may be further amended by the voters from time to time. The City is also subject to certain general State laws that are applicable to all cities in the State. In addition, under Article XVIII, Section 3 of the Ohio Constitution, the City may exercise all powers of local self-government and may exercise police powers to the extent not in conflict with applicable general State laws. The Charter provides for a mayor- council form of government.

Legislative authority is currently vested in a 17-member City Council. The terms of City Council members and the Mayor are four years. All City Council members are elected from wards. The current terms of the Mayor and City Council members expire on January 1, 2018. The City Council fixes compensation of City officials and employees and enacts ordinances and resolutions relating to City services, tax levies, appropriating and borrowing money, licensing and regulating businesses and trades, and other municipal functions. The presiding officer is the President of Council, who is elected by the City Council members. Kevin J. Kelley was elected President of Council for the term beginning January 6, 2014.

Pursuant to the City Charter, City Council is required to redivide the City into wards based on the City’s population. As a result of this requirement, City Council adopted a reapportionment plan that reduced the number of wards to 17 for the November 2013 municipal election.

The City’s chief executive and administrative officer is the Mayor who is elected by the voters for a four-year term. On November 5, 2013, Frank G. Jackson was re-elected Mayor of the City for a third term beginning January 6, 2014. Prior to assuming office as Mayor, Mr. Jackson served as President of Council from January 2002 through December 2005 and as Ward 5 Council Member since 1989. The Mayor may veto any legislation passed by City Council. A veto may be overridden by a two-thirds vote of all members of City Council.

The Charter establishes certain administrative departments and City Council may establish divisions thereof or additional departments. The Mayor appoints all of the directors of the City’s 14 departments.

FINANCIAL MATTERS

The responsibilities for the City’s major financial functions are vested in the Director of Finance. The Director of Finance is responsible for preparing and implementing the City’s current Operating Budget and Capital Improvement Plan, collecting the City’s revenues, and procuring the City’s goods and services and making payments therefor. The Director of Finance is also responsible for maintaining an effective system of internal accounting control, which includes the maintenance of a centralized accounting system and the supervision of the City’s internal audit staff. Preparation and issuance of the City’s internal and external financial reports are supervised by the Director of Finance.

The Director of Finance for the City is Sharon A. Dumas. Ms. Dumas served as Assistant Director of Finance for Budget and Capital from October 13, 2003 until her appointment as Director of Finance on March 29, 2006. Prior to joining the City’s Finance Department, Ms. Dumas worked as Assistant Director of Community Development for the City. Ms. Dumas also served as Finance Director for the City of East Cleveland, Ohio from 1988 to 1994. Ms. Dumas holds a Masters of Accounting and Financial Information Systems from Cleveland State University and has over thirty years of experience in private and public sector accounting.

James T. Hartley was named an Assistant Finance Director in April 2007 and, in addition, has served as acting City Treasurer and now City Treasurer since April 2008. Prior to accepting his current positions, Mr. Hartley was the Chief Investment Officer for the Ohio Treasurer of State from 1999 until 2007. As a member of the Treasurer’s senior staff, he was responsible for overseeing and directing the State’s investment program, including the State Operating Fund, STAR Ohio Local Government Investment Pool, and the State Tobacco Settlement Funds.

James E. Gentile, CPA, returned to the City as Controller in February 2002. Prior to accepting the position, Mr. Gentile was Deputy Auditor for the Auditor of State’s Office since 1995 where he planned and supervised audits of cities, school districts and other local government agencies. From 1991 through 1995, he was employed by the City as an accountant and, in his final year, as Acting City Controller.

Elizabeth C. Hruby has served as the City’s debt manager since 1996. She is the Assistant Secretary to the Sinking Fund Commission. She has been employed by the City since 1982 when she began as a Budget Analyst in the Office of Budget and Management. She was promoted to Operating Budget Manager in 1987 and was responsible for the development and monitoring of the City’s annual operating budget. From January 7, 2002 until April 1, 2002, Ms. Hruby served as interim Director of Finance for the City.

Budgeting, Tax Levy and Appropriations Procedures

Detailed provisions for City budgeting, tax levies and appropriations procedures are set forth in the Revised Code and in the Charter. The procedures involve review by County and State officials.

The City’s fiscal year corresponds with the calendar year. The City’s budgeting process formally begins with the preparation by the City’s Office of Budget and Management, and then the adoption by City Council after a public hearing each year, of a tax budget for the following year. Pursuant to the General Bond Ordinance, the City has covenanted to maintain balanced budgets by estimating revenues no greater than, and expenses no less than, those for the previous year, except for variations justified on a specific basis as described in the General Bond Ordinance and certified by the City’s Director of Finance.

Unless an extension is obtained, the City is required to file by July 20 of each year certain information obtained during its budgeting process and set forth in a document entitled “Alternative Tax Budget Information.” The County Budget Commission, composed of the County Fiscal Officer, County Executive and County Prosecuting Attorney, reviews the Alternative Tax Budget Information and, with particular attention to debt service, determines and approves levies for debt service outside and inside the ten-mill limitation. The Revised Code provides that “if any debt charge is omitted from the budget, the County Budget Commission shall include it therein.” Upon approval of the tax budget, the County Budget Commission certifies to the City its action together with the estimate by the Fiscal Officer of the property tax rates outside and inside the ten-mill limitation. Thereafter, and before the end of the then calendar year, City Council approves the tax levies and certifies them to the proper County officials. The approved and certified property tax rates are then reflected in the tax bills sent to property owners. Real property taxes are payable by property owners to the County in two installments, the first in January and the second in July. The County Treasurer distributes property tax receipts in periodic installments throughout the year.

City Council adopts by each December of the preceding year, a temporary appropriation measure for the following fiscal year. A permanent appropriation measure is adopted by City Council after the start of the current fiscal year but no later than April 1. Annual appropriations may not exceed the County Budget Commission’s official estimate of resources, and the County Fiscal Officer must certify that the City’s appropriation measures do not appropriate moneys in excess of the amounts set forth in those estimates.

Financial Reports and Audits

In accordance with the requirements of the General Bond Ordinance, the City’s financial transactions are recorded and reported in conformity with GAAP. As required by the General Bond Ordinance, annual financial reports are prepared by the City and audited by a nationally recognized independent firm of certified public accountants or the State of Ohio Office of the Auditor, as required by Ohio law.

For financial statement purposes, all financial transactions for governmental and fiduciary funds are recorded on the modified accrual basis of accounting. Under this accounting method, revenues are recorded when received in cash, except for those revenues susceptible to accrual, which are recorded as revenues when measurable and available to finance current City operations. Revenues accrued at year end consist of reimbursements from other governments for grant expenditures, revenues from other governmental entities for services rendered and individual income tax receivables arising from payroll tax withholdings in December and received within 60 days after year end. Property taxes are recorded as revenue when distributed to the City after collection by the County. Governmental fund expenditures are accrued when the liability is incurred except for interest on long-term debt, which is recorded when due.

As required by State law, the City’s budgetary process accounts for certain transactions on a basis other than GAAP. The major differences between the budget basis and the GAAP basis are the following:

(a) Revenues are recorded when received in cash (budget) as opposed to when susceptible to accrual (GAAP).

(b) Expenditures are recorded when paid in cash or encumbered (budget) as opposed to when susceptible to accrual (GAAP basis). Encumbrances are recorded as expenditures (budget) as opposed to reservations of fund balances (GAAP).

The City maintains budgetary control by not permitting expenditures to exceed appropriations for personnel costs, benefits, and other costs within a division of the City without the approval of City Council. The City’s appropriation process does not include annual appropriation of revenues and expenditures for grant funds. Expenditures from grant funds are limited by the amount of the grant.

Under the City’s General Bond Ordinance, moneys used to pay debt service on the City’s unvoted General Obligation Bonds are derived from property tax revenues and a portion of the City’s municipal income tax revenues specifically earmarked for the payment of debt service. A portion of the property tax revenues, up to the amount of millage available for debt service (4.35 mills), is deposited directly by the County Treasurer with the Escrow Agent designated under the City’s General Bond Ordinance. A portion of the income tax receipts in an amount necessary to make principal and interest payments coming due is transferred directly by the Central Collection Agency to the Escrow Agent. Only after provision is made for debt service payments are income tax receipts available for other City purposes.

Summary of Major City Funds

The City’s major funds are the General Fund, the Enterprise Funds and the Special Revenue Funds. The General Fund is the major operating fund of the City and accounts for the general operating revenues and

expenditures of the City not recorded elsewhere. Enterprise Funds are used to account for operations that provide services that are financed in whole or in part by user charges. The four major Enterprise Funds consist of (a) the Port Control Fund (airports), (b) the Cleveland Public Power Fund, (c) the Water Fund, and (d) the Water Pollution Control Fund. The City also has separate funds for its minor enterprises, consisting of the Cemeteries Fund, the Convention Center Fund, the Municipal Golf Courses Fund, the West Side Market Fund, the Municipal Parking Facilities Fund and the Central Collection Agency. Special Revenue Funds are used to account for proceeds of certain specific revenue sources that are legally restricted to expenditures for specified purposes. Examples of the City’s Special Revenue Funds are the Restricted Income Tax Fund, funds for federal grant programs such as the Community Development Block Grant program and funds for State programs such as the Workforce Investment Act program and the Stadium Fund.

Summary of General Fund Cash Receipts and Expenditures – Non-GAAP Budgetary Basis

Set forth below is a comparative summary of General Fund actual cash receipts by source and expenditures by function for the years 2012 through 2016, and the budgeted amounts for 2017.

Summary of General Fund Cash Receipts by Source and Budgetary Expenditures by Function – Non-GAAP Budgetary Basis(a) (000’s Omitted) Audited Unaudited Budgeted 2012 2013 2014 2015 2016 2017 RECEIPTS

Income Taxes(b) $290,474 $300,648 $297,124 $308,947 $314,801 $397,338 Property Taxes(c) 36,028 32,705 32,338 32,684 32,421 32,572 State Local Government Fund 34,673 28,180 25,021 26,580 24,596 26,990 Other Taxes & Shared Revenues(d) (e) 46,929 54,954 49,921 53,576 60,482 52,991 Licenses & Permits(f) 12,372 13,521 13,106 16,684 18,290 15,669 Charges for Services(f) 33,837 32,954 33,418 31,395 34,082 34,575 Fines & Forfeitures(f) 21,626 20,174 23,733 15,691 11,578 9,457 Investment Earnings(f) 250 467 454 445 761 780 Miscellaneous(f) 41,812 30,095 40,118 30,781 29,188 36,961 Total Receipts $518,001 $513,698 $515,233 $516,783 $526,199 $607,333

(a) Table based upon budget basis of accounting. (b) Represents annual income tax receipts less receipts from the portion of the City’s income tax restricted to use for capital improvements and debt service. (c) Reflects the phasing out of the tangible personal property tax and adjustments to assessed values following the 2012 and 2015 reappraisals. (d) Includes admission tax, exhibition tax, motor vehicle lessor tax, video games excise tax and parking tax. (e) Includes state cigarette and liquor taxes, estate taxes, electric excise taxes, property tax rollbacks and revenue from the commercial activity tax. See “THE CITY – Major General Fund Revenue Sources – Ad Valorem Property Taxes.” (f) Certain of these receipts are committed to City obligations payable from, or secured by, non-tax revenues of the City.

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Summary of General Fund Cash Receipts by Source and Budgetary Expenditures by Function – Non-GAAP Budgetary Basis(a) (000’s Omitted)

Audited Unaudited Budgeted 2012 2013 2014 2015 2016 2017 EXPENDITURES Public Safety $294,746 $301,076 $299,797 $309,858 $323,060 $349,468 General Government 78,496 81,317 83,892 85,851 93,501 101,978 Public Works 63,848 63,827 64,977 65,341 64,037 73,607 Public Health 5,346 5,057 5,705 6,350 6,586 8,781 Community Development/Building & Housing 8,465 9,207 8,896 9,203 9,602 12,578 Economic Development 1,413 1,456 1,538 1,488 1,625 1,702 Other 16,229 23,972 22,779 16,985 24,979 20,909 Total Expenditures $468,543 $485,912 $487,584 $495,076 $523,390 $569,023 Excess of Cash Receipts Over Expenditures $49,458 $27,786 $27,649 $21,707 $2,809 $38,310

OTHER FINANCING SOURCES (USES) Operating Transfers Out: Other(b) (17,941) (29,682) (29,572) (29,862) (32,080) (38,294) Excess (Deficiency) of Cash Receipts and other Financing Sources over Expenditures and Other Uses 31,517 (1,896) 1,923 (8,155) (29,271) 16 Decertification (Recertification) of Prior Year Encumbrances 2,181 640 2,247 625 110 0 Fund Balances at Beginning of Year 16,861 50,559 49,303 49,627 42,097 12,936 Fund Balances at End of Year $50,559 $49,303 $49,627 $42,097 $12,936 $12,952

(a) Table based upon budget basis of accounting. (b) Includes transfers to cover deficiencies in other funds and amounts as needed for various City financings and other obligations.

General Fund Financial Budget for 2017

The Mayor’s proposed budget was delivered to City Council on February 1, 2017 in accordance with the Charter. After a series of public hearings, City Council passed the 2017 budget on March 27, 2017 as required by State law. General Fund revenue is projected to increase by 15.4% ($81.1 million) from 2016 actual levels to $607 million. Income tax receipts, the largest revenue source for the General Fund, are projected to increase by 26.2 percent over 2016 actual collections to $397 million. This large increase in income tax receipts is due to the passage of one half of one percent income tax increase which was passed in November 2016 and became effective January 1, 2017. This was the first income tax increase in more than 32 years. The additional dollars resulting from this income tax increase will be used to enhance City services and provide for a structurally balanced budget. Property tax revenue is projected to remain at the same levels as in 2016 ($32 million). The County certifies property tax receipts for the City each year. State Local Government Fund revenue is projected to increase by $2.4 million from 2016 actual receipts to $26.9 million.

Other Shared Revenue and Other Taxes include the following taxes: admission, parking, casino, hotel, property rollback, electric excise, motor vehicle lessor, cigarette and liquor, estate, and commercial activity. The 2017 budget for this category is $52.9 million, which represents a $7.5 million decrease from 2016 actual collections which were higher than budgeted due to the increased admissions, parking and hotel taxes collected in 2016 from several events. During 2016, the City hosted the World Series, the NBA Championship and the Republican National Convention, each generating a large amount of admissions, parking and hotel taxes. The 2017 budget assumes that collections of the aforementioned taxes will return to more normal levels. The State’s estate tax was repealed for estates of individuals with a date of death on or after January 1, 2013. The

impact of the repeal of the State’s estate tax is now complete and accounts for $179,749 of the $773,000 decrease. The 2017 budget reflects motor vehicle lessor, electric excise and video game taxes at levels similar to those collected in 2016. The City is projecting receipts of $9 million in casino revenue for the General Fund which is consistent with previous years. As in 2016, electric excise tax receipts are being evenly split between the General Fund and Cleveland Public Power (CPP), with the General Fund half estimated at $3 million. All of these numbers reflect the City’s conservative approach to budgeting revenues each year.

Revenues from Licenses and Permits are expected to decrease by $2.6 million from 2016 actual levels. The 2017 budgeted amount is $15.6 million compared to $18.2 million collected in 2016. The decrease is mainly attributable to the fact that many of the large construction projects taking place throughout the City in recent years have completed the permit process. The pace for construction projects accelerated the last two years in anticipation of finishing projects before the start of the 2016 Republican National Convention in July 2016. The 2017 budget for Charges for Services is $34.6 million. This is similar to actual collections during 2016 of $34 million.

The 2017 budget for Fines and Forfeitures is $9.4 million, compared to 2016 collections of $11.5 million, a net decrease of 18.2%. Criminal fines account for over 90% of the total decrease, but that is a conservative estimate. In 2015, there was a permanent decrease in this category due to the approval of a voter referendum effectively eliminating the violations related to traffic light cameras. The 2017 budget for Miscellaneous Revenue is projected to increase by $2.3 million from 2016 actual receipts due to indirect cost recoveries from the City’s Enterprise Funds as a result of an updated cost recovery plan. In addition, this category includes $2.1 million in revenue from the sale of City assets.

General Fund expenses for 2017 are budgeted at $607.3 million. This represents a 9.3% or $51.9 million increase in expenditures from 2016 actual levels. Salary and benefit increases account for the majority of the total expense increase, mainly as a result of hiring additional staff as part of the delivery of enhanced services.

The enhanced services include the addition of 350 new employees. Below are some of the major enhancements that will be provided by the General Fund:

• The Division of Police will increase personnel by 93 employees, adding two captains, three lieutenants, 11 sergeants, 65 patrol officers and 12 safety radio dispatchers. The new Neighborhood Impact Community Engagement Squad (N.I.C.E) is included in the enhanced budget of approximately $8.3 million.

• The Division of Fire will increase its budget by more than $2.8 million, with an additional fire company, four support personnel, ballistic vests and a Records Management System upgrade.

• The Division of Emergency Medical Services will add 60 new paramedics and eight dispatchers to reduce response times, four new captains to oversee field operations, and will purchase five new ambulances.

• The Division of Animal Care and Control will add 16 new employees, including two new animal control officers, a veterinarian, two veterinarian technicians, a supervisor, shelter manager and additional support staff for the new kennel, which will open in the fall of 2017.

• A Chief of Prevention, Intervention, and Opportunity for Youth and Young Adults has been appointed to aid in preventing and reducing youth violence. This appointment goes hand-in-hand with the

addition of two crime analysts, two outreach workers and a grants administrator, along with $1 million to partner with outside agencies for crime reduction through the Community Relations Board.

• The Department of Public Health’s staff will increase by 21 employees, who will focus on youth violence as a public health issue, preventing lead poisoning, reducing infant mortality, addressing the opiate epidemic and improving our environment.

• The City’s Division of Recreation will increase staff and programming by more than $2.3 million as a means of reducing youth violence and providing increased opportunity for young people.

• The Department of Public Works enhanced budget of nearly $4.6 million will add employees to improve services such as street sweeping, pothole repair, waste collection and leaf removal. It also allows for improved park and playground infrastructure maintenance, improved urban forestry, and a stronger focus on illegal dumping reduction and clean-up.

• The Building and Housing Department will add 33 employees to better inspect residential and vacant properties and remove condemned properties and blight from the City’s neighborhoods.

• The Office of Quality Control and Performance Management is a newly created department in the General Fund. This office will monitor and assess program and service delivery to citizens. This office will track departmental performance and incorporate efficient, effective and economically sound process improvement methods to ensure high levels of accountability, compliance and quality control, thereby improving service delivery to residents.

The City ended 2016 with a $12.9 million budget basis balance in the General Fund. A major reason for the 0.5% income tax increase was to ensure that going forward the City generated sufficient revenue on an annual basis to cover annual expenditures. The 2017 budget provides for expenditures equaling revenues in the current year while providing enhanced service levels throughout City departments. As a result, the City expects to end 2017 with the same $12.9 million balance that existed at the start of the year.

Management Discussion of the City’s Unaudited General Fund Results for the Fiscal Year Ended December 31, 2016– Budget Basis

Revenues – In 2016, General Fund revenue increased by $9.4 million to $526.2 million from the 2015 actual level of $516.8 million. Income taxes are the largest single source of General Fund revenue and accounted for 60% or $314.8 million of total receipts. Income tax receipts have rebounded since 2010 when they hit their low of $263.5 million following the 2008 recession. With collections totaling $314.8 million in 2016, there has been an increase of $51.3 million in annual collections. This rebound has coincided with the construction boom throughout the City, most notably in the downtown and University Circle areas, as well as with the opening of the new casino in May 2012 and the opening of the new convention center and the Global Center for Health Innovation in 2013. Additionally, the convention center hotel opened in 2016 along with several other downtown hotels. The City’s income tax collections are divided between the General Fund (the “unrestricted share”) which receives eight-ninths of the receipts, and the Restricted Income Tax Fund which receives the remaining one-ninth. The Restricted Income Tax portion may only be used for capital improvements or for debt service on obligations issued to provide funds for capital improvements. See “MAJOR GENERAL FUND REVENUE SOURCES – Municipal Income Taxes.”

The two other major components of General Fund revenues were ad valorem property taxes and the State Local Government Fund. Together these two sources accounted for 10.8% of total receipts. In Ohio, the true value of taxable real property is adjusted by the counties every three years to reflect current market values.

The last complete reappraisal for all properties in the County occurred in 2012 for collections beginning in 2013 with the triennial adjustment taking place in 2015 for 2016 collections. Property tax revenues have remained constant since the initial drop in collections stemming from the 2012 reappraisal. In 2016, the General Fund received $32.6 million in property taxes. See “MAJOR GENERAL FUND REVENUE SOURCES-Ad Valorem Property Taxes.”

Local Government Fund (LGF) receipts reached their peak at $56.2 million in 2007 but began to fall as various adjustments have been made to the distributions since that time. As part of its budget balancing measures in 2011, the State imposed a 25% cut in LGF distributions effective July 1, 2011 through June 30, 2012 with the cut being increased to 50% beginning July 1, 2012 and thereafter. As a result, 2012 receipts from the Local Government Fund were reduced to $34.7 million and then fell to $28.2 million in 2013. In 2014, the revenue decreased by another 11% to $25 million. Receipts in 2016 totaled $24.6 million. The City does not anticipate further cuts to the Local Government Fund. “MAJOR GENERAL FUND REVENUE SOURCES-Local Government Fund/Local Government Revenue Assistance Fund.”

Other Taxes and Shared Revenues exhibited a $6.9 million or 12.9% increase in 2016. This category includes locally imposed taxes such as the 8% admission tax, the 8% parking tax, the hotel tax and a $6 per lease motor vehicle lessor tax as well as distributions by the State from its collections of the estate tax (now eliminated by the State but small amounts from old estates are still being received), the electric excise tax, and gaming taxes on the State’s four casinos. It also includes the State’s reimbursement of Homestead and Rollback taxes. The 2016 increase is mainly attributed to higher than normal admission, hotel and parking tax receipts due to the Cleveland Cavaliers progressing to, and winning, the NBA championship, the Cleveland Indians appearing in post-season play through the World Series, and the increased convention business experienced in the City, including the Republican National Convention in July 2016. The City’s General Fund collected $9.3 million in casino revenues in 2016. Per City ordinance, 85% of the casino revenues collected by the City are deposited into the City’s General Fund.

Revenues from licenses and permits increased by $1.6 million or 9.6% in 2016. The large volume of construction projects in the City leading up to the Republican National Convention were completed and multiple permits were required for the event. All of this activity resulted in the increase in the amount collected from building and other permits. Revenues from Charges for Services increased by $2.7 million in 2016 to $34 million due in part to efforts to eliminate a billing backlog relating to EMS transportation runs. Revenue from Fines and Forfeitures decreased by $4.1 million in 2016 due to the continued reduction in revenue from the elimination of the traffic camera enforcement program and fewer criminal fines collected during the year. In 2016, Investment Earnings totaled $760,000, a 71% increase over the previous year, due to slowly rising interest rates.

Miscellaneous Revenue includes a wide variety of revenues such as expenditure recoveries from grants, indirect cost reimbursements, reimbursements for police officers stationed at the Airport, workers compensation reimbursement from the State and transfers from other funds. In 2016, revenue from this source was $29.2 million, a decrease of $1.6 million from 2015. The largest change was a decrease of $3.8 million in transfers from other funds with fewer land sales and revenue from various Joint Development Agreements transferred to the General Fund. The City did not access the Rainy Day Fund in 2016 for General Fund operations.

Expenditures – Total General Fund expenditures, including operating transfers needed to meet debt service requirements on various City financings, increased by $30.5 million in 2016 to $555.5 million. Personnel expenses increased by $11 million. On the salaries side, the City saw an increase of $10.1 million in wage related expenses stemming largely from higher costs for uniformed personnel salaries and for overtime in general resulting from the major events taking place in the City in 2016 including the Republican National

Convention, the NBA playoffs, the World Series and a Cavaliers victory parade that drew approximately 1.3 million people to downtown. Employee benefits expenses increased by $900,000. Hospitalization costs increased by $1.9 million as the City continued its transition to a self-insurance plan, while most other benefit costs remained at levels similar to 2015 or slightly lower.

General Fund non-personnel expenses increased by a total of $19.5 million in 2016. Expenditures for utilities, materials and supplies, and maintenance increased only slightly from 2015 levels. The two largest components of the increase were a $9.8 million payment to the County for Justice Center maintenance costs as the City and County continued discussions on the payment amounts and a $7 million increase in amounts paid for settlements and judgments. This latter amount was the result of a $6 million settlement relating to a police-related shooting and a contractual settlement stemming from the voter rejection of the City’s traffic camera enforcement program.

Operating Transfers include subsidies and transfers to other funds. The transfers increased by $2.1 million in 2016 to $32.1 million. While the transfers to cover the debt service on various obligations of the City were only $230,000 higher than in 2015 and the subsidy to Public Auditorium decreased by $720,000, the subsidy to the Division of Streets increased by nearly $2.5 million as a result of an expanded street repair and resurfacing program. The City also transferred the third of fifteen $2 million annual payments for Stadium capital repairs as part of an agreement with the Cleveland Browns. There was no transfer to the Rainy Day Fund in 2016.

The City’s budget was impacted both positively and negatively by a number of significant one-time events in 2016. One of these events was planned and therefore budgeted (i.e. the Republican National Convention) while other events, including the NBA playoffs, the World Series, and the Cavaliers victory parade, were more unexpected. All of these events brought increased revenues to the City but also required additional expenditures on the part of many City departments. In addition, the City incurred costs related to the settlement of various outstanding issues. As a result, the City’s General Fund experienced a deficiency of cash receipts over expenditures and other uses of $29.3 million. However, these results, coupled with a beginning budget basis balance of $42.1 million and decertification of prior year encumbrances of $110,000, still allowed the City to end 2016 with an unaudited budget basis fund balance of $12.9 million.

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General Fund Balances

The following presents a summary of General Fund balances on a GAAP basis, rather than a non- GAAP budgetary basis.

Summary of General Fund – Fund Balance – GAAP Basis (000’s Omitted)

Audited Unaudited 2012 2013 2014 2015 2016

Fund Balance at Beginning of Year $51,594 $71,750 $89,748 $94,327 $81,209

Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Uses 20,156 17,998 4,579 (13,118) 513

Fund Balance at End of Year $71,750 $89,748 $94,327 $81,209 $81,722

Management Discussion of Unaudited General Fund GAAP Basis Results for the Fiscal Year Ended December 31, 2016

On a GAAP basis, the City’s unaudited General Fund revenues and other financing sources totaled $515,472,000 in 2016, an increase of $18.1 million from 2015. Expenditures and other uses totaled $514,959,000, representing an increase of $4.5 million from the previous year. Revenues and other sources exceeded expenditures and other uses by $513,000 which caused the unaudited General Fund GAAP basis balance to increase to $81.7 million at the end of 2016. The Rainy Day Reserve Fund balance increased to $18.8 million in 2016 due to interest earnings. The unassigned fund balance in the General Fund was $66,091,000 at the end of 2016, down from $68,490,000 in 2015. Overall, the City’s unaudited General Fund GAAP basis fund balance increased from $81,209,000 at year end 2015 to $81,722,000 at year end 2016, an increase of 0.6%.

In 2016, income tax receipts, the largest General Fund revenue source, increased by $4.6 million from 2015 levels reflecting the continued recovery in the local economy since the 2008 recession and the impact of a number of major events in the City in 2016 (see below). Property tax receipts fell by $252,000 as both residential and commercial property valuations and collection rates have stabilized. State Local Government Fund receipts dropped by $2.0 million or 7.6% due to the State’s decision to redirect some of the fund’s collections to villages and townships in 2016. Other taxes and shared revenues increased $9.3 million or 16.8% from 2015 levels primarily because of increased collections of the admission, parking and hotel taxes due to the NBA playoffs and championship, the MLB playoffs and World Series and the Republican National Convention, all of which took place in the City in 2016. Licenses and Permits grew by $1.65 million or 9.9% due to the aforementioned events taking place and due to the numerous construction projects that were completed in anticipation of the Republican National Convention. Charges for Services increased by $2.3 million to $34.0 million due to an increase in collections of emergency medical service transportation charges, while revenue from Fines, Forfeitures and Settlements decreased $3.8 million due to lower amounts from parking violations and criminal fines and the continued elimination of the traffic camera enforcement program. Investment earnings grew by $362,000 or 73% with the increase in interest rates earned on cash balances. Operating Transfers In remained at approximately the same $1.6 million level as in 2015.

General Fund expenditures and other uses grew to $514,959,000 in 2016, an increase of $4.5 million or 0.9% from 2015. The increase stemmed partially from employee wage and benefit increases and also from an additional $2.0 million in Operating Transfers Out in 2016. Transfers Out grew due to an increase in the subsidy needed for the Streets Division which was offset somewhat by a lower subsidy required for Public Auditorium. There was no transfer to the Rainy Day Fund in 2016.

Total General Fund assets decreased by $18.5 million in 2016. Cash and Cash Equivalents decreased by $17.8 million, primarily due to an increase in cash expenditures, most notably a $5.0 million payment for the Justice Tower Maintenance. At the same time, Taxes Receivable also decreased by $9.9 million while Accounts Receivable increased by $9.3 million. Due from Other Funds increased by $7.5 million as a result of an increase in expenses related to the Republican National Convention. Finally, there was an increase of $5.6 million in the Allowance for Doubtful Accounts due to an increase in uncollectible grass cutting fees.

General Fund liabilities and deferred inflows of resources decreased by $19.0 million from 2015 levels. The most significant changes in liabilities were (i) a decrease of $8.1 million in Accrued Wages and Benefits, which is attributed to the absence of any retroactive police payments in 2016 as well as the fact that the City changed to prospective payment for Workers’ Compensation, thus paying premiums in the current year instead of retrospectively, and (ii) a $3.7 million decrease in Due to Other Funds largely due to the Health Self Insurance Fund being fully funded in 2016. There was also a $6.0 million decrease in Deferred Inflows related to the decrease in delinquent property taxes expected to be collected due to the successful challenge in property taxes by the Cleveland Clinic.

The 2016 audit is being reviewed by the City’s outside auditors and will be submitted to the State Auditor’s Office, as required, by the end of May. As a result, the most recently released and publicly available financial statements of the City are for Fiscal Year 2015. See Basic Financial Statements section of the City’s 2015 Comprehensive Annual Financial Report which can be found at http://www.city.cleveland.oh.us/sites/default/files/forms_publications/2015CAFR.WithOpinion.pdf?id= 8928.

Investment Policy

Investments and deposits of City funds are made by the City’s Treasurer and are governed by the Charter, Chapter 178 of the Codified Ordinances of the City and the City’s Cash Management and Investment Policy promulgated and annually reviewed by the Director of Finance. Chapter 178 provides that investments of City funds under trust agreements securing outstanding bonds are governed by those agreements.

Eligible investments under Chapter 178 include obligations issued by the United States and its agencies, bonds and notes of the State, the State Treasurer’s investment pool (“STAR Ohio”), full faith and credit bonds and notes of Ohio political subdivisions, repurchase agreements with a term not to exceed one year for the purchase of obligations issued by the United States or its agencies that have a market value in excess of the purchase price and that are held by a custodial bank, fully insured or fully collateralized certificates of deposit of eligible depositories and certain money market mutual funds. The City’s Cash Management and Investment Policy provides that safety of principal is the foremost objective, that the City’s investment portfolio will remain sufficiently liquid to enable the City to meet reasonably anticipated operating requirements and the City’s investment portfolio will be designated with the objective of achieving a rate of return that will provide the maximum level of income without subjecting the City to undue risk. The Policy currently provides that five years is the maximum maturity of any investment instrument or asset purchased by the City. However, the maximum maturity of investments of funds governed by a trust indenture or bond legislation is not subject to this policy.

The City biennially selects commercial banks to be designated as eligible depositories of the City’s funds based on the creditworthiness, capitalization and liquidity of the bank, and also on the bank’s policies and practices regarding housing and economic development in the City and compliance with other public purpose policies of the City. Under the current Cash Management and Investment Policy, a bank (or its corporate holding company parent) must have a credit rating of at least “A” from Moody’s Investors Service, S&P Global Ratings, or Fitch Ratings. Eligible depositories are required to pledge and deposit with the City or a custodian, as security for the repayment of money of the City so deposited, eligible securities that have an aggregate market value equal to 110% of the City’s money at any time on deposit. As of April 30, 2017, the City’s General Fund related portfolio had an average life of approximately 32 days and a weighted average yield of 0.698%. The portfolio generally consists of Money Market Funds and United States agency obligations.

THE CITY – MAJOR GENERAL FUND REVENUE SOURCES

Municipal Income Taxes

Ohio law authorizes a municipal income tax on net profits from the operation of a business or profession and on employee wages, salaries, and other compensation at a rate of up to 1% without voter authorization and at a rate above 1% with voter authorization. In 1979, in 1981, and in 2016 the voters in the City approved increases of one-half of one percent to the rate of the income tax, bringing it to the current 2.5% rate. By the terms of the 1981 voter approval as amended in 1985, the Restricted Income Tax (one-ninth of the receipts of the total tax) must be used only for capital improvements or debt service on obligations issued for capital improvements or the payment of past deficits. The remaining eight-ninths of the receipts of the municipal income tax is pledged to, and may also be used for, debt service on the unvoted tax supported obligations to the extent required.

The income tax is imposed on gross salaries and on wages earned in the City by non-residents of the City and on salaries, wages and other compensation of City residents earned within or outside the City. The income tax liability of a City resident employed outside the City is reduced by a credit equal to 50% of the tax paid to the municipality in which the City resident is employed. The tax on business profits is imposed on that part of profits attributable to business conducted within the City. In 2016, approximately 90% of the total income taxes paid to the City were derived from non-residents employed in the City and from business profits.

All employers doing business in the City are required to withhold the income tax from their employees and remit it to the City on a monthly or quarterly basis depending on the amount being withheld. Individuals who do not have the tax withheld are required to file an estimated declaration each year and pay the income tax on a quarterly basis to avoid any penalties. At the end of each year, all employers must file a reconciliation document along with all W-2 forms issued to any employee and must remit any additional tax due at that time. Any resident 18 years of age or older who fails to file a tax return, regardless of income, is in violation of the municipal income tax ordinance and, as such, will be subject to fines and penalties as prescribed by law.

The Ohio Constitution provides that the General Assembly may enact laws restricting the power of municipalities to levy taxes, including municipal income taxes. Current Ohio law permits the reduction or elimination of a municipal income tax by action of the city council, or by vote of the electors initiated by petition of 10% of the number of electors of the city who voted at the last regular municipal election for president of council, following initiated ordinance procedures, or 10% of the electors of the city, following charter amendment procedures. Under current law, a city council could, unless restricted by a charter provision, reimpose a 1% tax without authorization by the electors. The City has covenanted in the General Bond Ordinance not to repeal or amend any ordinance for the levy or collection of its income taxes in any

manner or to such extent that the City would not be able to meet its obligations under the General Bond Ordinance.

From time to time, legislation affecting the collection of municipal income taxes is considered by the State legislature. The Governor signed Substitute House Bill 5 into law on December 19, 2014. The law modifies certain provisions of the State tax code for municipal income taxes. Its provisions took effect for municipal income tax years that begin on or after January 1, 2016. Substitute House Bill 5 has not had a material effect on the City’s collection of its income tax to date and is not expected to do so in the future.

The total annual income tax receipts, including the restricted portion (on a budget basis), for the last five calendar years are shown in the following table:

Year Amount Rate 2012 $326,783,000 2.00% 2013 338,229,000 2.00 2014 334,265,000 2.00 2015 347,565,000 2.00 2016 354,151,000 2.00

The City is budgeting collections amounting to $447,005,000 from income taxes in calendar year 2017. See “FINANCIAL MATTERS – General Fund Financial Budget for 2017.” This amount reflects the City’s current tax rate of 2.50%, which went into effect on January 1, 2017.

The City projects income tax receipts on the basis of historical collections and does not include any projection of delinquent income tax collections in its budget. The City does, however, have procedures for identifying and collecting delinquent income taxes. Delinquent taxes collected in 2016 were approximately $4,222,000.

The ten largest employers based on payroll tax withholdings for 2016 are alphabetized by nature of business:

Name of Employer Nature of Business

Case Western Reserve University Education Cleveland Metropolitan School District Education KeyBank Financial Services The City Government Cuyahoga County Government DFAS (Defense Finance & Accounting Service) Government The Cleveland Clinic Foundation Health care The MetroHealth System Health care University Hospitals of Cleveland Health care Sherwin Williams Co. Manufacturing

Local Government Fund (LGF)/Local Government Revenue Assistance Fund (LGRAF)

From 1993 through 2011, LGF and LGRAF combined were the City’s second largest source of General Fund revenue. Through these funds, Ohio subdivisions shared in a portion of the State’s collection of State tax revenues (referred to hereinafter as the “percentage share”). Periodically, the amounts of and formula for distribution of LGF and LGRAF funds were considered by the State legislature for revision. In January 2008,

the LGRAF was consolidated into the LGF and a “percentage of revenue” funding method was restored. However, rather than receiving a percentage of revenues from certain designated tax sources, the LGF received 3.68% of all General Revenue Fund tax sources.

Pursuant to statutory law in Ohio, LGF revenues are divided into county and State portions. The county portion, the larger of the two, is distributed to each of the State’s 88 counties and is allocated based upon a statutory formula utilizing county population and county municipal property values. Once received by a county, the funds can either be distributed to all subdivisions using the statutory formula or the county and its subdivisions may agree upon an alternate method for allocating the funds. The County and its recipient communities have chosen the latter method, which is comprised of a base allocation and an excess allocation. The excess allocation takes into account such factors as assessed value per capita, per capita income, population density and the number of individuals receiving public assistance.

The State portion of the LGF is distributed directly by the State to those municipalities which impose an income tax. A municipality receives its share of the funds based upon its percentage of total municipal income taxes collected throughout the State in a given year.

The biennial appropriation legislation passed in May 2011 reduced the monthly LGF allocations for the State’s two fiscal years, ending June 30, 2013. From August 2011 through June 2012, each month’s LGF allocation equaled 75% of the allocation made in the corresponding month in State fiscal year 2011. From July 2012 through June 2013, the monthly allocation equaled 50% of the allocation made in the corresponding month in State fiscal year 2011. Under the bill, the reductions made in State fiscal years 2012 and 2013 would become the basis for all future allocations. For State fiscal year 2016, the State reduced the State allocation to municipal corporations to allow the State to redirect some funds in that year to small villages and townships. In State fiscal year 2018, the allocation is expected to return to the “percentage of revenues” funding method, with municipalities sharing in any growth thereafter.

Listed below are the actual distributions to the City of these funds for the City’s last five fiscal years ending December 31, 2016 and the budgeted amounts for 2017.

Actual Unaudited Budgeted 2012 2013 2014 2015 2016 2017(a) Local Govt. Fund – County Portion $31,509,083 $25,601,980 $22,473,898 $24,578,225 $23,656,090 24,904,842 Local Govt. Fund – State Portion 3,163,623 2,578,348 2,547,115 2,001,542 940,282 2,085,541 TOTAL $34,672,706 $28,180,328 $25,021,013 $26,579,767 $24,596,372 $26,990,383

(a) Source :The County.

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Ad Valorem Property Taxes

Assessed Valuation

The following table shows the assessed valuation in thousands of dollars, for the most recent five tax collection years, of property subject to ad valorem property taxes levied by the City:

Public Utility Tax Collection Tangible Total Assessed Year Real Property(a) Personal(b)(c) Valuation

2013 $4,597,342 $271,426 $4,868,768 2014 4,601,349 298,603 4,899,952 2015 4,629,285 318,829 4,948,114 2016(d) 4,257,595 331,843 4,589,438 2017 4,240,407 387,919 4,628,326

(a) Other than real property of railroads. The real property of public utilities, other than railroads, is assessed by the County. Real property of railroads is assessed, together with tangible personal property of all public utilities, by the State Tax Commissioner. (b) The State (i) reduced the valuation of tangible personal property of general businesses and railroads in increments beginning in 2006 to zero in 2009 and (ii) reduced the valuation of tangible personal property of telephone and telecommunications companies in increments beginning in 2007 to zero in 2011. See the discussion of those reductions and related State make-up payments below. (c) Tangible personal property of all public utilities and real property of railroads. (d) Reflects impact of triennial appraisal in 2015 for collection year 2016.

Source: The County.

Taxes collected from real property in one calendar year are levied in the preceding calendar year on assessed values as of January 1 of that preceding year. Public utility real and tangible personal property taxes collected in one calendar year are levied in the preceding calendar year on assessed values determined as of December 31 of the second year preceding the tax collection year.

Pursuant to statutory requirements for sexennial reappraisals, the County adjusts the true value of taxable real property to reflect current fair market values. The most recent reappraisal was conducted in 2012 and is reflected in the 2013 collection year valuation. The County is required to adjust (but without individual appraisal of properties except in the sexennial reappraisal) and has adjusted taxable real property values triennially to reflect true values. The most recent readjustment was conducted in 2015 and is reflected in the 2016 collection year valuation.

The “assessed valuation” of real property is fixed at 35% of true value and is determined pursuant to rules of the State Tax Commissioner. An exception is that real property devoted exclusively to agricultural use is to be assessed at not more than 35% of its current agricultural use value. Real property devoted exclusively to forestry or timber growing is taxed at 50% of the local tax rate upon its assessed value.

As a result of the phase-out of taxation of tangible personal property used in general business (excluding certain public utility property) and tangible personal property used by telephone, telegraph or interexchange telecommunications companies, and the reduction of the percentages of true value of electric utility production equipment and natural gas utility property assessed for taxation as described above, eligible local governments have received reimbursement payments from the State to account for the loss of property tax revenue. Under Amended Substitute House Bill No. 64, passed by the Ohio General Assembly and signed by the Governor on June 30, 2015, providing State appropriations for its 2016-2017 biennium (the period from July 1, 2015 through June 30, 2017) and enacting other statutory provisions (the “State Budget Act”), such

reimbursements have been combined and are to be distributed by the State to the county auditors in August and February.

The State’s reimbursement payment to the City in 2016 was $2,949,000 to the Sinking Fund and in 2017 is budgeted to be $2,949,000 to the Sinking Fund. The General Fund no longer receives funds from this source. See “FINANCIAL MATTERS – 2017 General Fund Budget.” The reimbursement scheduled for 2017 is expected to be the last payment.

Public utility tangible personal property (with some exceptions) is currently assessed (depending on the type of property) from 25% to 88% of true value. Effective for collection year 2002, the assessed valuation of electric utility production equipment was reduced from 100% and natural gas utility property from 88% of true value, both to 25% of true value. Makeup payments in varying and declining amounts were to be made through 2016 to taxing subdivisions such as the City by the State from State resources. The State’s reimbursement payment to the City in 2015 was $539,000 and was $532,000 in 2016. The budget legislation adopted by the State in May of 2011 provided for an immediate phase-out of distributions to local taxing subdivisions from the proceeds of the public utility tangible personal property tax for those entities for which this source of revenue comprises less than 2% of total operating revenues, which includes the City. The portion of the public utility tangible personal property tax designated for debt service was not reduced. See “FINANCIAL MATTERS - General Fund Financial Budget for 2017.”

As indicated above, the General Assembly has from time to time exercised its power to revise the laws applicable to the determination of assessed valuation of taxable property and the amount of receipts to be produced by ad valorem taxes levied on that property, and may continue to make similar revisions.

Ohio law grants tax credits to offset increases in taxes resulting from increases in the true value of real property. Legislation classifies real property as between residential and agricultural property and all other real property, and provides for tax reduction factors to be separately computed for and applied to each class. These tax credits apply only to certain voted levies on real property, and do not apply to unvoted levies, or to voted levies to pay debt service on general obligation debt, or to levies within rate limitations provided by a municipal charter. Accordingly, none of the City’s tax levies, all of which fall within the exceptions previously noted, are affected by these credits.

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The following table lists the largest property taxpayers with respect to both real and tangible personal property located in the City, based on assessed valuation of property for the 2017 tax collection year. State law permits, and in the past the City has granted, exemptions from real property taxation for up to 100% of assessed valuation by reason of tax abatement or tax increment financings. The amounts shown in the following table are adjusted to reflect reductions in valuations resulting from abatements:

Largest Property Taxpayers Tax Collection Year 2017(a)

Assessed Valuation Percentage of Real and Tangible Total Assessed Name of Taxpayer Nature of Business Personal Property Valuation

CEI/FirstEnergy (b) Utilities – Electric $205,137,440 4.43% East Ohio Gas (b) Utilities – Natural Gas 117,042,920 2.53% The City (c) Government 106,787,330 2.31% Cleveland-Cuyahoga County Port Authority (d) Government 98,791,710 2.13% Key Center Properties LLC Commercial Real Estate Holdings 84,622,410 1.83% American Transmission System (b)(e) Commercial Real Estate Holdings 66,744,410 1.44% Rock Ohio Caesars Cleveland, Inc. Commercial Real Estate Holdings 45,641,450 0.99% Cleveland Financial Associates Commercial Real Estate Holdings 45,527,380 0.98% PNC Bank Commercial Real Estate Holdings 33,508,720 0.72% Quintus Landlord LLC Commercial Real Estate Holdings 32,900,020 0.71% TOTAL $836,703,790 18.08%

Total Assessed Valuation – All Categories $4,628,325,790 100.00%

(a) It is noted that the County records show The Cleveland Clinic Foundation to have real property with assessed valuations of $34,917,010. That taxpayer has reportedly applied for property tax exemptions relative to a significant portion of these assessed valuations. With the current outcome of the exemption applications unknown, and with current tax collections from this taxpayer not reflective of the current assessed valuation, this taxpayer is not shown in the above table. (b) Tangible personal property for certain utilities is included as taxable properties. See “Ad Valorem Property Taxes” above. (c) Includes, among other things, the following properties which are subject to ad valorem taxation: land comprising the site of Cleveland Browns FirstEnergy Stadium, various municipal parking lots, areas of Cleveland Hopkins International Airport and Burke Lakefront Airport which are leased to third parties, and public utility property owned by the City. The City has applied for property tax exemptions relative to certain of these assessed parcels. However, as the outcome of the exemption applications is unknown, those values are included herein. Regarding many of the parcels that are leased to third parties, while the City is statutorily responsible for the property tax, third parties have contractually agreed to pay those taxes on the City’s behalf. (d) Includes property owned by the Cleveland-Cuyahoga County Port Authority as part of its various public financing programs. Regarding many of the parcels that are leased to third parties, while the Port Authority is statutorily responsible for the property tax, third parties have contractually agreed to pay those taxes on the Port Authority’s behalf. (e) American Transmission Systems is an affiliate of FirstEnergy.

Source: The County.

Ad Valorem Property Tax Rates

All references to tax rates under this caption are in terms of stated rates in mills per $1.00 of assessed valuation.

The Charter provides that the maximum total tax rate that may be levied without a further vote of the electors for current operating expenses is 8.35 mills. The Charter further provides that City Council may authorize an additional levy in any year not to exceed 0.2 mills and within the ten-mill limitation imposed by Ohio law, for the purpose of financing specific public improvements and equipment having an estimated useful life of five years or longer.

The following are the rates in mills per $1.00 of assessed valuation (35% of true value), for the years indicated at which the City and the taxing subdivisions overlapping the City levied ad valorem property taxes (in that area of the City having the highest percentage of total assessed valuation):

TAX TABLE A Overlapping Tax Rates Library & Cleveland County and Metropolitan School Collection Year City Others District Total

2013 12.70 18.30 86.60 117.60 2014 12.70 20.03 86.60 119.33 2015 12.70 20.93 86.70 120.33 2016 12.70 20.93 86.10 119.73 2017 12.70 20.93 86.10 119.73

Source: The County.

The following are the rates at which the City levied ad valorem property taxes for the purposes and in the years indicated:

TAX TABLE B City Tax Rates

Police and Fire Unvoted Debt Collection Year Operating Pension Retirement(a) Total

2013 7.75 0.60 4.35 12.70 2014 7.75 0.60 4.35 12.70 2015 7.75 0.60 4.35 12.70 2016 7.75 0.60 4.35 12.70 2017 7.75 0.60 4.35 12.70

(a) The City has no outstanding Voted General Obligation Bonds.

Source: The County.

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Collection of Ad Valorem Property Taxes The following are the amounts billed and collected for City ad valorem property taxes on real property, utility property and tangible personal property for the indicated tax collection years: (000’s Omitted) Total Collections Current As Percent Collection Current Delinquent Total Current Levy Delinquent Total Of Current Accumulated Year Levy Levy (a) Levy Collection Collected Collection Collection Levy Delinquency 2012 $76,328 $45,815 $122,143 $58,665 76.9% $6,972 $65,637 86.0% $47,654 2013 68,192 36,761 104,953 57,320 84.1 4,665 61,985 90.9 40,344 2014 72,904 37,425 110,329 60,147 82.5 4,543 64,690 88.7 41,285 2015 75,116 35,031 110,147 62,192 82.8 4,537 66,729 88.8 47,221 2016 70,861 17,064 87,925 61,491 86.8 3,863 65,353 92.2 23,067

(a) Levy includes adjustments, abatements, additions and penalties against current delinquent levy. Source: The County.

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The current and delinquent taxes are billed and collected by County officials for all taxing or assessing subdivisions in the County, including the City. The County employs procedures for collection of delinquent taxes, including the initiation of foreclosure proceedings.

Included in the above figures for ad valorem property taxes under the columns headed “Total Levy,” “Total Collection,” and “Total Collections as Percent of Current Levy” are payments under two real property tax relief programs of the State made from State revenue sources. Ohio law currently requires that the County reduce the sum to be levied against each parcel of real property by ten percent (the “ten percent rollback”). Ohio law also currently allows for additional reductions in the real property taxes on property owned and occupied by persons over 65 or handicapped who apply and meet certain criteria (the “homestead exemption”). The State currently reimburses each taxing subdivision for the reductions in that subdivision’s real property taxes resulting from the ten percent rollback and the homestead exemption. As an indication of the extent of the State assistance reflected in the City’s tax collections (both for General Fund and debt service), in 2016, the homestead payment made by the State was $1,819,447, and the 10% rollback payment totaled $2,931,176.

State legislation passed in 2013 made the Homestead Exemption subject to means testing beginning January 1, 2014, and eliminated the Property Tax Rollback Exemption and related reimbursements with respect to new or replacement tax levies approved at elections after September 29, 2013, and other taxes (or increases in taxes) not levied for tax year 2013. Real property taxes are payable in two installments, the first usually by January and the second in July.

Delinquencies

The following is a general description of delinquency procedures under Ohio law, the implementation of which may vary in practice among the counties. Under the Revised Code, taxes become a lien of the State on the first day of January, annually, and continue until the taxes, including any penalties, interest or other charges, are paid. Real estate taxes and special assessments that are not paid in the year they are due are to be certified by the county auditor’s office as delinquent. Any amount of a previous tax bill not paid before new tax bills are mailed for the next half of the year is considered delinquent and becomes subject to a 10% penalty. A list of delinquent properties is compiled by the county auditor (the “delinquent land duplicate”). If delinquent taxes (and special assessments) are not paid within 60 days after a copy of the county auditor’s delinquent land duplicate is delivered to the county treasurer, then the county treasurer is to enforce the lien of the State that attached on January 1 of the year the taxes first became payable. Under State law (Section 323.25 of the Revised Code), the county treasurer is to enforce the lien “in the same way mortgage liens are enforced,” that is, by an action in the court of common pleas for foreclosure and sale of the property in satisfaction of the delinquency. If the county treasurer fails to bring an action to enforce the lien, then the State Tax Commissioner is to do so. In addition, one year after certification of a delinquent land list, the county prosecuting attorney is authorized to institute foreclosure proceedings in the name of the county treasurer to foreclose the lien.

The property owner may arrange a payment plan with the county treasurer providing for payments over a period not to exceed five years. If payments are made when due under the plan, no further interest will be assessed against delinquent balances covered by the plan; a default in any payment under the plan or in the payment of current taxes will invalidate the taxpayer’s participation in the plan. If a payment plan is not adhered to or if none is arranged, foreclosure proceedings may be initiated by the county. Mass foreclosure proceedings and sales are permitted after three years’ delinquency. Proceeds from delinquent property foreclosure sales become part of and are distributed as current collections to the taxing subdivisions.

In recent years, the State legislature has enacted several programs with respect to forestalling the foreclosure process or the forfeiture of property due to tax delinquency that may have the effect of delaying or eliminating the collection of certain property taxes. Notwithstanding the delay or loss of the tax revenues from those properties, an issuer of general obligation notes or bonds, such as the City, remains obligated to pay the debt charges on those notes or bonds from the available revenues.

Current and delinquent property taxes are billed and collected by County officials for all taxing subdivisions in the County. There were 140,956 nonexempt parcels in the City for collection year 2016, the number of delinquent parcels was 24,029, against 2,469 of which foreclosure proceedings were commenced.

There is no one taxpayer that accounts for more than 5% of any of the delinquencies of ad valorem real property taxes or special assessments identified above for tax collection year 2016.

Overlapping Governmental Entities

The major political subdivisions or other governmental entities overlapping all or a portion of the territory of the City and, in most cases, the County are listed below along with a brief description of their functions.

The County performs the traditional functions allocated to counties by Ohio law, such as human services, elections, road maintenance, public hospitals and administration of a portion of the court system. Property located within the City constitutes 16.76% of the property assessed for valuation within the taxing jurisdiction of the County.

The Cleveland Metropolitan School District (the “School District”) is charged with educational responsibilities for children from kindergarten through the twelfth grade. The School District is the principal school system in the City and the second largest in the State. Property located within the City constitutes 96.73% of the property assessed for valuation within the taxing jurisdiction of the School District. Other property in the City is located in portions of two other school districts: (a) the Shaker Heights City School District and (b) the Berea City School District.

On September 9, 1998, the Mayor-appointed nine-member school board and Chief Executive Officer assumed control and management of the School District. The State legislation authorizing this assumption of control provided as follows: (a) the Mayor-appointed board of education has no interest in the funds or property of the City; (b) the budgets of the School District and the City are to be estimated, planned, and financed separately; and (c) at no time are any funds of the School District and the City to be commingled in any manner, and all School District funds and accounts shall be maintained and accounted for totally independently of any funds and accounts of the City. In November 2002, the voters of the School District approved the continuance of the governance of the School District by the Mayor-appointed board of education.

The Greater Cleveland Regional Transit Authority (“RTA”) owns and operates a public mass transit system. It was created in 1974 for the purpose of acquiring the Cleveland Transit System, the Shaker Rapid Transit System and other municipal transit systems in the County, and became operational in September 1975. Property located within the City constitutes 16.76% of the property assessed for valuation within the taxing jurisdiction of Greater Cleveland Regional Transit Authority (“RTA”).

The Northeast Ohio Regional Sewer District (“NEORSD”) was established in 1972 under Chapter 6119 of the Revised Code with the consent of the City, to implement a comprehensive wastewater treatment and control system in the Cleveland metropolitan area. NEORSD presently operates and maintains three wastewater treatment plants and the combined sewer outflow and interceptor sewer system which serves the City and all or part of 59 suburban communities.

The Cleveland Metropolitan Park District owns and operates park and recreation areas. Property located within the City constitutes 16.56% of the property assessed for valuation within the taxing jurisdiction of this district.

The Cuyahoga County District Library owns and operates library facilities. Property located within the City constitutes 0.45% of the property assessed for valuation within the taxing jurisdiction of this district.

The Cleveland-Cuyahoga County Port Authority owns and operates port facilities in the Port of Cleveland. Property located within the City constitutes 16.76% of the property assessed for valuation within the taxing jurisdiction of this authority.

The Cuyahoga Community College District operates a two-year public institution of higher education. Approximately 33,500 students enroll annually at its three main campuses. Property located within the City constitutes 16.76% of the property assessed for valuation within the taxing jurisdiction of this district.

Each of these entities operates independently under and is governed by Ohio law, with its own separate budget, taxing power and sources of revenue. Only the County, The Cleveland Metropolitan School District, the Shaker Heights City School District, the Berea City School District and RTA may, in addition to the City, levy ad valorem property taxes within the ten-mill limitation described under “CITY DEBT AND OTHER OBLIGATIONS – Indirect Debt Limitation.”

Tax Incentive Programs

To facilitate economic growth and development, the City primarily utilizes two tax incentive programs, an Enterprise Zone Program and a Community Reinvestment Program.

The Enterprise Zone Program (as approved by the State Director of Development) provides real and personal property tax exemptions for certain businesses which locate or expand in designated qualified enterprise zones. Under the Enterprise Zone Program, agreements entered into between businesses and municipalities can grant exemptions, not to exceed 10 years, on up to 100% of tangible personal property and up to 100% of the value of real property improvements.

The State has approved several enterprise zones within the City under which the City provides tax exemptions up to 100% of tangible and real property to industrial and non-retail commercial businesses for up to 10 years.

Municipal corporations and counties are permitted to create community reinvestment areas (“CRAs”) in which a real property tax exemption may be granted for the total or increased real property valuation that would result from new construction or remodeling of existing structures. The City’s current policy is to provide 100% tax exemptions for 15 years on newly constructed market rate single/two family homes. The entire geographic area of the City is designated a CRA.

Municipal corporations are also authorized to enter into development agreements with owners and developers of property in urban redevelopment areas and to grant real property tax exemption for up to 30 years for certain improvements undertaken pursuant to such development agreements. The City is currently a party to a number of agreements with respect to large urban renewal projects in its downtown. In some cases the property owners make payments to the City and the School District in lieu of taxes.

CITY DEBT AND OTHER OBLIGATIONS

The information set forth below summarizes provisions dealing with the debt limitations imposed by State law applicable to the City and its general obligations.

Debt Limitations

State laws restrict the ability of municipalities to incur debt. Unvoted general obligations of the City are subject to both the direct debt limitations in the Revised Code (except to the extent debt service on the unvoted general obligations of the City is to be paid from lawfully available municipal income taxes applied under ordinance covenants) and the indirect debt limitation imposed by a combination of the provisions of the Ohio Constitution and the Revised Code. The Series 2017A Bonds are not subject to the direct debt or indirect debt obligations.

Direct Debt Limitations

The Revised Code provides that the net principal amount of both voted and unvoted debt of a city, excluding exempt debt described below, may not exceed 10½% of the total tax valuation of all property in a city as listed and assessed for taxation, and that the net principal amount of unvoted non-exempt debt may not exceed 5½% of that valuation. These two limitations are referred to as the direct debt limitations and may be amended from time to time by the Ohio General Assembly.

Certain debt the City may issue is exempt from the direct debt limitations (“exempt debt”). Exempt debt includes each of the following:

(a) General obligation debt that is:

(i) “self-supporting” (that is, non-tax revenues from the facility or category of facilities are sufficient to pay operating and maintenance expenses and related debt service and other requirements) issued for city utility systems or facilities; airports or landing fields; railroads and other mass transit systems; parking facilities; health care facilities; solid waste facilities; urban development; recreation, sports, convention, museum and other public attraction facilities; facilities for natural resource exploration, development, recovery, use or sale; correctional and other related rehabilitation facilities;

(ii) issued for highway improvements if the municipality has covenanted to pay debt service and financing costs from distributions of motor vehicle license and fuel taxes;

(iii) issued in anticipation of the levy or collection of special assessments;

(iv) issued to pay final judgments or court-approved settlements; or

(v) voted for water or sanitary or storm water sewerage facilities to the extent that another subdivision has agreed to pay the municipality amounts equal to debt service.

(b) Unvoted general obligation bonds to the extent that debt service will be met from lawfully available municipal income taxes to be applied to that debt service under ordinance covenants.

(d) Revenue debt.

(e) Notes anticipating the collection of current revenues or the proceeds of a specific tax levy.

(f) Notes issued for certain emergency purposes.

(g) Debt issued in anticipation of the receipt of federal or state grants for permanent improvements.

(h) Debt issued to evidence loans from the State capital improvement fund.

(i) Voted debt for urban redevelopment purposes not in excess of 2% of the City’s assessed valuation.

(j) Debt issued to pay obligations of the City under an agreement relating to the police and fireman’s disability and pension fund.

(k) Debt issued for municipal, educational and cultural facilities.

(l) Debt for the acquisition of property for public use in excess of that needed for public improvements.

(m) Mortgage bonds issued to finance municipal utilities.

(n) Notes issued in anticipation of exempt bonds.

In the calculation of debt subject to the direct debt limitations, the amount in a city’s bond retirement fund (in the case of the City, its Sinking Fund) allocable to the principal amount of non-exempt debt is deducted from gross non-exempt debt. See “DEBT OUTSTANDING” below for a summary of the outstanding debt of the City and the City’s current voted and unvoted non-exempt debt capacities, calculated without consideration of amounts in the City’s Sinking Fund and based on the 2016 assessed valuation of property in the City for the 2017 tax collection year.

Indirect Debt Limitation

Voted general obligation debt may be issued by the City if authorized by the voters in the City. Ad valorem property taxes, without limitation as to amount or rate, to pay debt service on voted bonds are authorized by the voters at the same time they authorize the issuance of the bonds. The City currently has no outstanding voted bonds and no outstanding general obligation bond anticipation notes (“BANs”).

General obligation debt also may be issued by the City without authorization from the voters. This unvoted debt may not be issued unless the ad valorem property tax for the payment of debt service on (a) those bonds (or the bonds in anticipation of which BANs are issued), and (b) all outstanding unvoted general obligation bonds (including bonds in anticipation of which BANs are issued) of the combination of overlapping taxing subdivisions, including the City, resulting in the highest tax required for such debt service in any year is ten mills or less per $1.00 of assessed valuation. This indirect debt limitation, the product of what is commonly referred to as the “ten-mill limitation,” is imposed by a combination of provisions of the Ohio Constitution and the Revised Code. In the case of BANs issued in anticipation of unvoted general obligation bonds, the highest annual debt service estimated for the anticipated bonds is used to calculate the millage required. The indirect debt limitation applies to all unvoted general obligation debt even if debt service on some of it is expected to be paid, in fact, from income tax revenues, special

assessments, utility earnings or other resources. However, revenue bonds and notes, notes issued in anticipation of the collection of special assessments for City services in limited circumstances, certain urban renewal bonds and mortgage revenue bonds are not included in debt subject to the ten-mill limitation because they are not general obligations of the City and neither the general revenue nor the full faith and credit of the City is pledged for their payment.

The ten-mill limitation is the maximum aggregate millage for all purposes, in the absence of a charter tax rate limitation, that may be levied without voter approval on any single piece of property by a combination of all overlapping taxing subdivisions without a vote of the electors. The ten mills which may be levied without a vote of the electors is in fact levied, collected and allocated among the City and its overlapping taxing subdivisions for general fund purposes pursuant to a statutory formula. The latter ten mills is otherwise known as the subdivisions’ “inside” millage.

Present Ohio law requires this “inside” millage allocated to a taxing subdivision to be used first for the payment of debt service on its unvoted general obligation debt, unless provision has been made for that payment from other sources, with the balance usable for other purposes. To the extent this inside millage is required for debt service of a taxing subdivision (which may exceed the formula allocation to that subdivision), the amount that would otherwise be available to that subdivision or other overlapping subdivisions for general fund purposes would be reduced. In the case of the City, however, a law applicable to all Ohio cities and villages requires that any lawfully available receipts from a municipal income tax or from voted property tax levies be allocated to pay debt service on City unvoted debt before the formula allocations of the inside millage to overlapping subdivisions can be invaded for that purpose.

The current allocation of the inside millage in the City is as follows: 4.40 mills to the City, 4.00 mills to the Cleveland Municipal School District and 1.50 mills to the County. Of the 4.40 mills allocated to the City, 4.35 mills are levied for debt service on unvoted general obligation bonds and 0.05 mills is levied for fire pensions.

The voters of a charter municipality such as the City may authorize the levy of a tax at a rate subject to a different limitation. The City voters in the City’s Charter authorized City Council to levy each year for current operating expenses and for police and fire pensions a tax of up to 8.35 mills on all taxable property in the City without further voter authorization, but subject to change by further action of the voters. These 8.35 mills are in addition to the City’s share of inside millage (i.e., the 4.35 mills levied in 2017).

The City currently levies 8.30 mills , pursuant to the Charter’s 8.35 mill authorization, for current operating expenses and for police and fire pensions. Satisfying the City’s pension obligations requires 0.55 mills of the 8.30 mills, leaving 7.75 mills for operations. If the City’s allocated 4.35 mill levy within the ten-mill limitation is insufficient to cover the payment of debt service on its unvoted general obligation bonds, State law requires that the City must first exhaust its municipal income tax receipts and its 8.30 mill operating and pension levy receipts before a reallocation of any other political subdivision’s share of the inside millage may be made to the City to provide for the payment of that debt service.

Debt Outstanding

The following table summarizes: (i) the principal amount of outstanding debt, revenue bonds and other obligations of the City as of May 16, 2017, prior to the issuance of the Series 2017A Bonds and the refunding of the Refunded Bonds, and the portion of all obligations that is exempt from the 5½% and 10½% direct debt limitations discussed above; and (ii) the remaining leeway within those direct debt limitations. Currently, the City has no voted bonds outstanding; consequently, the amount of outstanding debt subject to the 5½% and 10½% limitations in the table below is the same.

A. Total Debt $2,119,476,880 B. Exempt Debt Category Self-Supporting Revenue Bonds and Notes Waterworks $584,525,000 Airport 684,610,000 Water Pollution Control 32,390,000 Electric 210,958,880 Parking(a) 20,810,000 Urban Renewal Bonds 835,000 General Obligation Bonds with Income Tax Covenant(b) 233,900,000 Other Non-General Obligation Debt Subordinate Lien Unrestricted Income Tax Bonds 32,960,000 Subordinate Lien Income Tax Bonds(c) 258,160,000 Non Tax Revenue Bonds Lower Euclid Avenue Project 5,698,000 Non Tax Revenue Bonds (Core City) 48,820,000 Non Tax Revenue Bonds Series 2014 (Stadium Project) 5,810,000 Total $2,119,476,880 C. Total Non-Exempt Debt (A minus B) $0 D. Assessed Valuation for the 2016 Tax Year (2017 collection year) $4,628,325,790 E. 5 ½% of Assessed Valuation $254,557,919 F. Debt Leeway within 5 ½% (E minus C) $254,557,919 G. 10 ½% of Assessed Valuation $485,974,208 H. Debt Leeway-10 ½% (G minus C) $485,974,208

(a) These bonds are payable from net parking revenues and certain non-tax revenues of the City. (b) Debt leeway in this table is determined without considering the balance available in the Sinking Fund. (c) Consisting of the Outstanding Bonds.

Overlapping Subdivisions – Millage Requirements

The following table shows the unvoted general obligation debt outstanding for the City and for the subdivisions overlapping the City and currently subject to the ten-mill limitation; debt service on that debt; and the millage required to pay that debt service in 2018, the year of the highest potential debt service for purposes of the table. The total millage theoretically required by the City, the County, the RTA, and the Shaker Heights City School District (those being the only taxing subdivisions overlapping the City with the highest potential debt service for purposes of the ten-mill limitation) for their outstanding unvoted obligations, is 9.1138 mills for 2018. Accordingly, there remains 0.8862 within the ten-mill limitation

which has yet to be allocated to debt service by the City, the County, RTA, and the Shaker Heights City School District and which is available to any or all of those subdivisions or other overlapping subdivisions in connection with the issuance of additional unvoted general obligation debt.

Projected Outstanding Debt and Debt Service For Fiscal Year 2018*

Current Unvoted Required Tax GO Debt Principal Interest Rate in Mills

City $233,900,000 $24,700,000 $9,941,085 7.4846 County 226,090,000 19,475,000 10,287,519 1.0774 RTA 3,910,000 1,995,000 74,813 0.0749 Shaker Heights City School District 2,925,000 335,000 54,625 0.4769 Total Millage Required 9.1138 Margin Within Ten-Mill Limitation 0.8862

Source: The County, as of May 2, 2017. *Calculation is performed for year that produces the highest annual aggregate debt charges for all overlapping jurisdictions. Leases and Other Obligations

The City entered into a lease agreement dated as of June 1, 1997 in connection with the funding of the construction of an open-air municipal stadium for professional football. The City’s obligation to make lease payments under that stadium lease, as supplemented and amended, is subject to the annual appropriation of funds sufficient for that purpose. The lease payments due during the remaining portion of the lease term ending December 31, 2017, amount to approximately $8,160,138 (including both the principal component and the interest component). Assuming renewal of the lease through December 31, 2028, the remaining aggregate of the principal components of the lease payments under that stadium lease amounts to $99,100,000.

The City also has current obligations under three leases for vehicles and equipment. As of May 16, 2017, the remaining lease payments due during the year ending December 31, 2017 under those leases amount to $2,049,512 (including the principal and interest components of those leases). Assuming renewal of all of those leases through all subsequent renewal terms, as of May 16, 2017, the aggregate of the principal components of the lease payments under all those equipment and vehicle leases amounted to $6,356,396.

On December 21, 2010, the Cleveland-Cuyahoga County Port Authority issued its $11,000,000 Cleveland-Cuyahoga County Port Authority City Annual Appropriation Bonds, Series 2010 (City of Cleveland, Ohio – Flats East Project), of which $9,745,000 is currently outstanding. The City has agreed to pay debt service on these bonds by way of a Cooperative Agreement subject to annual appropriation. The City has budgeted $871,528 to pay debt service on these bonds in 2017.

Derivative Transactions Payable from General Fund

The City is a party to various hedge agreements involving the exchange of interest payments on notional amounts related to certain outstanding bonds and lease obligations. The following is a brief summary of those hedge agreements currently in effect that do or may require payments from General Fund revenues. Under certain circumstances, each of these hedge agreements may be terminated prior to its stated termination date. Upon early termination, depending on prevailing economic circumstances, a

payment may be owed by the City to the counterparty or a payment may be owed by the counterparty to the City.

In February 2003, the City sold an option to JPMorgan Chase Bank (“JPM”) that gives JPM the right to enter into an interest rate swap with the City, at JPM’s discretion, at any time before May 15, 2024 (the “JPM Agreement”). To date JPM has not exercised that option so there are no, and have not been any, payment obligations of the City under the JPM Agreement. The JPM Agreement originally related to the City’s then-outstanding Subordinated Income Tax Variable Rate Refunding Bonds, Series 1994 (the “1994 Bonds”) and a prior swap agreement between the City and Ambac Financial Services, LLC relating to the 1994 Bonds under which the City paid a fixed rate and received a floating rate on a notional amount equal to the 1994 Bonds. If JPM exercises its option, the City will be required to pay JPM a floating rate of interest based on the SIFMA Municipal Swap Index on an amortizing notional amount (currently $32,200,000), and JPM would pay the City a fixed rate of 4.88% on the same notional amount, having the effect of reversing the swap with Ambac Financial Services, LLC. On August 6, 2008, the 1994 Bonds were retired from the proceeds of the City’s $59,560,000 Subordinate Lien Unrestricted Income Tax Bonds, Series 2008 (referred to herein as the “Pension Bonds”), and the swap with Ambac Financial Services, LLC was terminated. Consequently, the JPM Agreement now relates to a portion of the Pension Bonds. If JPM exercises its swap option obligating the City to make the floating rate payments and any potential termination payments under the JPM Agreement, the periodic interest equivalent payments (but not any termination payment) will be payable from, and secured by a pledge of, the City’s Pledged Unrestricted Income Taxes on a parity with the Pension Bonds. See “SECURITY AND SOURCES OF PAYMENT – Pension Bonds.”

On August 3, 2006, the City entered into a basis swap (the “Basis Swap”) with respect to its Parking Facilities Refunding Revenue Bonds, Series 2006 (the “Parking Facilities Bonds”), with UBS AG, who subsequently novated its position to PNC Bank, National Association (“PNC”). The Parking Facilities Bonds are currently outstanding in the principal amount of $20,810,000, and the notional amount of this swap is equal to the principal amount of the Parking Facilities Bonds and amortizes to zero in annual increments that match the scheduled maturities of the Parking Facilities Bonds through the final maturity on September 15, 2022. Under the Basis Swap the City pays floating rates of interest based on the BMA (now SIFMA) Municipal Swap Index, and PNC pays a rate equivalent to 67% of one-month LIBOR. The obligation of the City under the Basis Swap to make the regularly scheduled semiannual payments (but not any termination payment) is secured by a pledge of the Parking Revenue and Additional Pledged Revenue, each as defined in the trust indenture securing the Parking Facilities Bonds, on parity with the debt service on the Parking Facilities Bonds. Any payment due by the City to PNC upon early termination of the Basis Swap is secured by is secured by a pledge of the Parking Revenue and Additional Pledged Revenue on basis subordinate to the payment of debt service on the Parking Facilities Bonds then outstanding and to the payment of regularly scheduled semiannual payments under the Basis Swap, and is payable, at the option of the City, on a deferred basis over twelve months. The City’s payment obligations to PNC under the Basis Swap are insured by Assured Guaranty Municipal Corp., subject to certain conditions and limitations. To date, debt service on the Parking Facilities Bonds and payments on the Basis Swap have been paid entirely from Parking Revenues, but “Additional Pledged Revenues” includes certain General Fund parking-related, non-tax revenues of the City.

Other Financings

The City expects to issue bonds to refund various outstanding water revenue bonds in 2017.

THE CITY – ECONOMIC AND DEMOGRAPHIC INFORMATION

In the 2010 Census classifications, the City was in the Cleveland-Elyria-Mentor Metropolitan Statistical Area (“MSA”), which consists of Cuyahoga (the “County”), Geauga, Lake, Lorain and Medina

counties. In 2010, the MSA had a population of 2,077,240, ranking it the 28th largest metropolitan area (out of 366) in the United States. The City was also in the Cleveland-Lorain-Elyria Primary Metropolitan Statistical Area (“PMSA”), which consisted of the counties of Ashtabula, Cuyahoga, Geauga, Lake, Lorain and Medina and the Cleveland-Akron Consolidated Metropolitan Statistical Area (“CMSA”), which consisted of eight northeast Ohio counties until June of 2003 when the U.S. Census Bureau ceased using the PMSA and CMSA distinctions.

Population

Set forth below are population statistics from the U.S. Bureau of the Census for the City, the County, the PMSA, the CMSA and the State for each decade from 1970 to 2000 and for the City, the County, the MSA and the State for 2010 and estimated for 2015 and 2016.

Year City County PMSA/MSA CMSA State

1970 750,973 1,721,330 2,418,809(a) 2,999,811 10,652,017 1980 573,822 1,498,400 2,277,949(a) 2,834,412 10,797,630 1990 505,616 1,412,140 2,202,069(a) 2,859,644 10,847,115 2000 478,403 1,393,978 2,250,871(a) 2,945,831 11,353,140 2010 396,815 1,280,122 2,077,240(b) N/A 11,536,504 2015-est. 388,072 1,255,921 2,060,810(b) N/A 11,613,423 2016-est N/A 1,249,352 2,055,612 N/A 11,614,373

(a) Indicates population for the PMSA. (b) Indicates population for the MSA.

Source: U.S. Bureau of the Census.

Employment

The following table compares estimated employment and unemployment statistics (annual averages) for the City, the County and the MSA, including comparisons with unemployment rates for the state and the United States. EMPLOYMENT STATISTICS(a)

Employed Unemployed Unemployment Rate Year City County MSA City County MSA City County MSA Ohio U.S.

2008 168,900 604,200 1,020,200 14,300 40,000 64,900 7.8 6.2 6.0 6.4 5.8 2009 159,800 571,100 972,500 18,900 54,500 91,200 10.6 8.7 8.6 10.3 9.3 2010 148,800 577,900 964,100 17,900 53,800 87,900 10.8 8.5 8.4 10.3 9.6 2011 147,900 576,000 964,200 15,900 47,200 76,400 9.7 7.6 7.3 8.8 8.9 2012 148,200 577,100 967,400 14,100 42,000 67,600 8.7 6.8 6.5 7.4 8.1 2013 147,400 574,500 965,500 14,300 43,300 70,400 8.8 7.0 6.8 7.5 7.4 2014 148,500 578,100 973,400 16,600 38,300 62,000 7.8 6.2 6.0 5.8 6.2 2015 148,900 579,500 975,900 10,100 30,500 49,600 6.3 5.0 4.8 4.9 5.3 2016 148,200 577,200 973,900 11,100 33,300 54,400 7.6 5.4 5.3 4.9 4.9 2017(b) 145,600 566,900 957,700 13,400 40,500 67,000 8.4 6.7 6.5 5.1 4.5

(a) Rounded to the nearest hundred. (b) As of March 2017. Source: Ohio Department of Job & Family Services, Labor Market Information Division. City and County estimates are NOT seasonally adjusted.

The following table indicates the distribution of employee classifications in the MSA for the years 2012 through 2016 and as of February 2017:

2012 2013 2014 2015 2016 2017(a) Goods Producing Industries Mining, Logging, Construction 33.4 34.1 35.2 35.8 35.9 33.5 Primary Metal 8.7 8.8 8.7 8.4 7.1 7.1 Fabricated Metal 27.7 27.5 27.9 27.9 26.6 25.9 Transportation Equipment 12.2 12.6 12.5 12.8 13.5 13.7 Other 74.4 74.9 74.9 75.6 73.9 74.2 Total Goods Producing Industries 156.4 157.9 159.2 160.5 157.0 154.4

Service Producing Industries Transportation & Public Utilities 29.8 30.3 30.2 30.9 31.3 31.0 Wholesale Trade 49.6 49.4 50.2 51.1 51.5 51.4 Retail Trade 101.2 101.8 101.3 101.6 102.1 98.9 Finance, Insurance & Real Estate 62.9 62.8 64.9 65.0 65.2 66.1 Health Services 161.6 164.0 163.0 166.1 169.4 171.8 Other Services 321.7 327.3 334.2 335.5 341.9 331.5 Federal Government 18.5 18.3 18.3 18.6 18.9 19.0 State Government 7.0 6.9 7.3 7.2 7.3 7.7 Local Government 107.9 107.6 108.2 108.8 109.9 110.3 Total Service Producing Industries 860.2 868.4 877.6 884.8 897.5 887.7

Total 1,016.6 1,026.3 1,036.7 1,045.3 1,054.5 1,042.1

Goods Producing Percentage 15.4% 15.4% 15.4% 15.4% 14.9% 14.8% Service Producing Percentage 84.6% 84.6% 84.6% 84.6% 85.1% 85.2%

(a) As of February 2017. Source: Ohio Department of Job & Family Services, Labor Market Information Division.

The following table indicates the per capita income for the County, the MSA, the State, and the United States for the years 2006 through 2015. PER CAPITA INCOME Year County MSA Ohio U.S. 2006 $38,609 $37,946 $34,148 $38,144 2007 40,700 39,800 35,488 39,821 2008 42,302 41,122 36,681 41,082 2009 39,938 39,057 35,610 39,376 2010 39,971 39,401 36,355 40,277 2011 42,645 42,075 38,816 42,461 2012 44,933 44,034 40,269 44,282 2013 44,889 44,297 40,687 44,493 2014 47,087 46,295 42,164 46,464 2015 48,506 47,783 43,587 48,190

Source: U.S. Bureau of Economic Analysis.

The income per household in the City and the County is estimated to be distributed as set forth in the following table:

City County Income and Benefits(a) # Households % Households # Households % Households Less than $10,000 34,362 20.6% 58,714 11.0% $10,000 to $14,999 17,767 10.6% 35,310 6.6% $15,000 to $24,999 28,645 17.1% 66,943 12.5% $25,000 to $34,999 20,885 12.5% 59,268 11.1% $35,000 to $49,000 22,539 13.5% 72,334 13.5% $50,000 to $74,999 21,569 12.9% 89,052 16.7% $75,000 to $99,999 10,224 6.1% 56,088 10.5% $100,000 to $149,999 7,276 4.4% 56,065 10.5% $150,000 to $199,999 2,003 1.2% 19,843 3.7% $200,000 or more 1,830 1.1% 21,102 3.9%

(a) In 2015 inflation-adjusted dollars. Source: U.S. Census Bureau Selected Economic Characteristics in the United States 2011-2015.

The U.S. Census Bureau also estimates that 36.2% of the people in the City and 18.7% of the people in the County have incomes that fall below the poverty level.

Corporate Headquarters

Listed below are 13 corporations (representing 13 different industries) among the Fortune 1000 largest corporations of 2016 (ranked by worldwide revenues) that have headquarters in the County.

CORPORATIONS HEADQUARTERED IN COUNTY AMONG FORTUNE’S TOP 1000 Within the 1,000 Largest U.S. Corporations Ranked by Revenues(a) Rank Company Major Products 137 Progressive Insurance 224 Parker Hannifin Corp Hydraulic Components 253 The Sherwin Williams Company(b) Paints & Chemicals 439 TravelCenters of America National Travel Center Chain 540 KeyCorp(b) Financial Services 687 Aleris International Metals 780 Applied Industrial Technologies Inc.(b) Industrial Components 788 TransDigm Group, Inc.(b) Aircraft Components 823 Hyster-Yale Materials Handling Industrial Machinery 832 Lincoln Electric Holdings Industrial Equipment 852 Medical Mutual of Ohio(b) Health Care Insurance 860 Cliffs Natural Resources(b) Mining, Crude Oil Production 968 American Greetings Corp. Greeting Cards

(a) Source: 2016 Fortune Directory of the Largest U.S. Corporations. (b) Headquartered in the City.

Home Values, Housing Units and Home Sales

The 2015 estimated median value of owner-occupied homes in the City, the County and the MSA were $69,600, $121,800, and $138,900, respectively, compared with $129,900 in the State and $178,600 in the United States. The number of housing units within the City for the nine-year period from 2007 to 2015 decreased by 1.67%, from 215,760 to 212,154, compared with a decrease of 0.05% for the County, from 620,991 to 618,190. (All figures in this paragraph are derived from the U.S. Bureau of the Census.)

In recent years, as part of the City’s community development initiatives, the City has provided financial assistance to nonprofit and for-profit developers to stimulate new housing construction in the City and made additional efforts to address increased foreclosures. See “Housing And Neighborhood Development” below.

Listed below are sale price summary statistics for the City and the County, respectively.

HOUSING SALES STATISTICS 2012-2016

City County Year Number of Sales Average Sales Price Number of Sales Average Sales Price

2012 2,432 $57,842 11,915 $133,129 2013 2,809 59,737 13,674 139,950 2014 3,761 54,548 16,021 129,634 2015 3,266 67,280 15,672 144,206 2016 4,847 59,368 20,198 135,046

Source: The County

Building Permits

The following table shows information concerning the filing with the County of building permits for construction and demolition and the net assessed valuation (not the actual construction or demolition cost) of those building permits as determined by the County, for the City by class:

2012 2013 2014 2015 2016 # of Assessed # of Assessed # of Assessed # of Assessed # of Assessed Permits Value(a) Permits Value(a) Permits Value(a) Permits Value(a) Permits Value(a)

Commercial 698 $63,958 786 $157,917 758 $153,627 889 $87,635 944 $104,940 Industrial 106 4,470 154 8,858 105 4,403 103 2,401 96 2,692 Exempt 393 0 381 713 318 427 1,175 2,541 561 90 Public 2 0 0 0 0 0 2 0 2 0 Residential 3,616 6,838 4,330 13,622 4,907 7,853 5,884 7,015 5,924 8,179 Total: 4,815 $75,266 5,651 $181,110 6,088 $166,310 8,053 $99,592 7,527 $115,901

(a) In thousands. Source: The County

Utilities

The MSA is well served with adequate and reliable water and energy resources. The principal source of water in the MSA is Lake Erie, the 12th largest lake in the world. The principal provider of potable water in the County is the City’s Division of Water. A large amount of fresh water is available to the area for its foreseeable needs. The two principal providers of electric energy in the MSA are Cleveland Public Power and The Cleveland Electric Illuminating Company, a wholly owned electric utility operating as a subsidiary of FirstEnergy Corp. Sewer services in the MSA are provided by the Northeast Ohio Regional Sewer District.

Transportation

The City is a major regional center for economic and commercial activity and is served by diversified transportation facilities. There is immediate access to six United States’ highways and seven

interstate highways. The Cleveland Innerbelt Modernization Plan is focused on improving safety, reducing congestion and traffic delays, and modernizing interstate travel along I-71, I-77 and I-90 through downtown Cleveland. This investment by the State of Ohio will rehabilitate and reconstruct the Innerbelt Freeway system – including construction of two new bridges to carry I-90 traffic – and address operational, design, safety and access shortcomings that severely impact the ability of the Innerbelt Freeway system to meet the transportation needs of Northeast Ohio. The Ohio Department of Transportation (“ODOT”) constructed a new westbound Innerbelt Bridge in the fall of 2013. ODOT also demolished the old Innerbelt Bridge and recently completed construction of the new eastbound bridge in October 2016. This two bridge system accommodates the more than 138,000 vehicles that cross the bridge each day. ODOT reports that the total cost for the construction of the two bridges is approximately $573 million.

In the fall of 2014, ODOT commenced construction on its Opportunity Corridor Project, a three- mile, approximately $331 million road project that is designed to improve the transportation system and support planned economic development within the City in the areas between I-490/I-77 and University Circle. The Opportunity Corridor encompasses nearly 1,000 acres on the City’s southeast side and is anchored by University Circle and the Cleveland Clinic. In addition to transportation benefits, it is anticipated that the Opportunity Corridor Project will bring new economic development and new jobs to the community. The Opportunity Corridor Project supports an economic development plan of the City and Greater Cleveland Partnership for the area through enhanced mobility, direct access to freeways and the University Circle area, new frontage for potential development, improved visibility and improved multi- modal access. The Opportunity Corridor Project is being funded in part by bonds issued by the Ohio Turnpike and Infrastructure Commission. The Opportunity Corridor Project is divided into three stages: the first stage commenced in the fall of 2014; the second stage commenced in the spring of 2016; and the third stage is expected to commence in 2017.

Cleveland Hopkins International Airport (“Hopkins”) is the primary commercial service airport for northeastern Ohio. Hopkins is situated approximately ten miles southwest of the downtown area and is accessible via highway from multiple directions. In addition, heavy rail rapid transit service to Hopkins is also provided from downtown by the Greater Cleveland Regional Transit Authority (“RTA”). Hopkins is owned by the City and operated by the City’s Department of Port Control. As of December 2016, Hopkins was served by eight major carriers, including one international carrier, 13 regional and commuter airlines, and five all-cargo airlines.

Hopkins’ approximately 935,000 square foot terminal complex includes a multi-level terminal building and four concourse buildings which support 63 jet gates and 33 commuter aircraft parking positions. Due to the announcement by United Airlines (“UAL”) in early February 2014 that UAL would significantly reduce service at Hopkins, Concourse D was closed on June 4, 2014 and all of UAL’s operations were consolidated in Concourse C. There are three runways at Hopkins. The Airport completed a $69 million FAA-funded Air Traffic Control Tower and Terminal Radar Approach Control Facility in 2015, equipped with the latest technology—allowing the airport to seamlessly integrate with the FAA’s move toward a Next-Generation (or “NextGen”) Air Transportation System. The tower is one element in a coordinated program of airfield safety improvements. In July 2016, the Airport completed its $42 million terminal modernization project, which included a new canopy over the upper roadway system to shield the departure area curb front from inclement weather, garage improvements, ticketing lobby renovation to include higher ceilings, revolving doorways, valet staging areas, signage and other aesthetic and ancillary improvements at the lower roadway passenger pick-up areas.

Burke Lakefront Airport (“Burke”), which also is City-owned and operated, has two parallel runways on 480 acres adjacent to downtown Cleveland. Burke recorded 53,495 terminal operations in 2016, the majority by air taxi operators serving business activity in the City, and the remainder almost entirely by corporate and private general aviation aircraft operators.

The Port of Cleveland (the “Port”) is an interlake and international shipping center located on the shores of Lake Erie and the Cuyahoga River. The Port primarily handles steel and bulk commodities and is a heavy lift port which is favorable for such items as automobile manufacturing equipment, presses and raw and finished steel and factory components. There are 20,273 jobs supported by the maritime activities of the Port, with $1.4 billion in total personal income and local consumption. The Port averages 13 million tons of cargo per year.

Norfolk Southern and CSX chose the City as their gateway to the Northeast and Midwest after the respective railroads restructured the rail systems following the acquisition of Conrail.

The City is also served by the RTA. The RTA owns and operates a public mass transit system, providing transportation to a 457 square mile service area which includes 59 municipalities, one of which is the City.

Financial Services

The City is a regional financial center and is the headquarters for the Fourth District Federal Reserve Bank, serving Ohio, the western portion of Pennsylvania and portions of Kentucky and West Virginia.

Education

Within the County are 13 public and private two-year and four-year colleges and universities, including, among others, Case Western Reserve University, John Carroll University, Cleveland State University, Cuyahoga Community College, Baldwin Wallace University, Notre Dame College, Ursuline College, the Cleveland Institute of Music and the Cleveland Institute of Art.

Health Care

There are over 20 hospitals, including acute care and private psychiatric hospitals, in the County. Among these institutions are The Cleveland Clinic Foundation, University Hospitals Health System (affiliated with Case Western Reserve University School of Medicine), and The MetroHealth System, all headquartered in the City.

Recreation and Entertainment

The City is noted for its many cultural institutions, including the internationally acclaimed Cleveland Orchestra and the Cleveland Museum of Art, the latter of which completed a $350 million renovation and expansion project in late 2013. The project included refurbishing historic galleries and adding 35,000 square feet of gallery space, which opened in stages. Theaters and entertainment centers include Playhouse Square (a complex of eight theaters and performance venues, currently with seating for over 10,000), Public Auditorium, Karamu House, and Severance Hall. Other cultural institutions include the Cleveland Play House, Great Lakes Theater, Cleveland Public Theater, Apollo’s Fire (the Cleveland Baroque Orchestra), Verb Ballet, and Dance Cleveland.

The Rock and Roll Hall of Fame and Museum, a 150,000 square foot facility located at North Coast Harbor, opened in 1995 and has attracted more than 10 million visitors to date.

The Great Lakes Center for Science and Technology, located on North Coast Harbor next to the Rock and Roll Hall of Fame and Museum, opened in July 1996. With more than 400 hands-on exhibits

and a six-story Omnimax theater, the Center gives visitors the chance to explore science, environment and technology and their relationships to the Great Lakes.

Other museums include Museum of Contemporary Art Cleveland, Cleveland Botanical Gardens, Cleveland Museum of Natural History, Dunham Tavern Museum, Cleveland Children’s Museum and Western Reserve Historical Society. Recreational facilities in the County include the 18,800-acre Metropolitan Park System, Cleveland Metroparks Zoo, Wade Park, Rockefeller Park, Cultural Gardens, Lakefront State Park and, outside the City, the Cuyahoga Valley National Park. The Cleveland Metroparks Zoo opened its new $4.1 million Rosebrough Tiger Passage in June 2016. The Crawford Auto Aviation Museum, part of the Western Reserve Historical Society, reopened in January 2013 after a $4 million renovation.

Professional sports are available to area residents at various facilities located in the City’s downtown. FirstEnergy Stadium (previously known as Cleveland Browns Stadium), located on the lakefront in downtown Cleveland on the same site as the former Cleveland Municipal Stadium, was completed in August 1999 and is the home of the National Football League’s Cleveland Browns. The facility consists of an open-air stadium with approximately 68,000 seats. In addition to NFL football, the facility is suitable for major league soccer and open-air concerts.

The Gateway Sports Complex, located in the central business district of the City, includes Progressive Field (home of the American League’s Cleveland Indians), Quicken Loans Arena (home of the National Basketball Association’s Cleveland Cavaliers, the American Hockey League’s Cleveland Monsters, and the Arena Football League’s Cleveland Gladiators), and a parking garage.

Progressive Field, which opened in April 1994, is an open air, natural turf baseball stadium with a current seating capacity for approximately 36,000 people. Quicken Loans Arena, which opened in October 1994, is a multi-functional, indoor facility for sporting and entertainment events and seats approximately 20,000 people. The Gateway common areas consist of approximately 13 acres and include Gateway Square, an area for outdoor entertainment and activities.

The City hosted the 2016 Republican National Convention in July 2016. The Convention drew an estimated 50,000 attendees.

The City hosted the Rock and Roll Hall of Fame inductions in April of 2015 and will be the host again in April of 2018. The City also hosted the 2014 Gay Games which featured more than 35 sports, band and choral competitions and community and cultural events. More than 10,000 participants from more than 65 countries attended. In addition, the City hosted the National Senior Games in July 2013. The Games attracted over 10,000 registered athletes and had a total attendance of approximately 65,000.

Downtown and Other Economic Development

The City continues to focus its strategies on identified clusters of regional strength including health technology, paints and coatings, lighting and electrical, information technology, automotive and automotive related, aerospace, and banking and finance. Retention efforts include two visitation programs: the Cleveland Industrial Retention Initiative for all manufacturers, distribution and related supply chain businesses and a specific downtown stakeholders’ visitation program through Downtown Cleveland Alliance. Oatey Co., a long time Cleveland manufacturer of plumbing products with locations around the world, built a new 43,500 square foot headquarters building in Cleveland’s Emerald Corporate Park, which opened in October 2016.

One of the central focus areas is the Health Tech Corridor, a three-block wide transit-oriented development running from Cleveland State University to University Circle, encompassing 1,600 acres. The Health Tech Corridor includes three colleges and universities and three major hospitals. In 2014, RTA completed a new transit station in University Circle on Cedar Avenue and completed construction of a new transit station on Mayfield Road in August 2015. These stations complement RTA’s Health Line transportation system by connecting it to the City’s heavy rail system, with direct access to the airport, and providing better connectivity to the City’s second “downtown.” The Health Line was key in the retention of Dealer Tire in the City’s Midtown area. Dealer Tire recently opened their new Headquarters at the Victory Center, keeping their 450 employees in the City. They intend to add over 100 jobs in the next three years. The area also continues to provide a location for incubated health technology companies like Abeona, which has announced its intention to build a private gene manufacturing facility (one of 10 in the United States) in the Health Tech corridor.

Hemingway Development and University Hospitals have agreed to purchase a ten acre brownfield site that the City assembled and cleaned up. University Hospitals plans to develop another Health Technology Campus to be anchored by a 40,000 square foot University Hospitals clinic for women and children, which will break ground in 2017. Hemingway broke ground in 2016 on a 60,000 square foot speculative tech center. The City also started clean-up activities on another 2.5 acre site to keep pace with demand in the Health Tech Corridor and is working with a potential buyer.

A development team of First Interstate Properties, Ltd., and Petros Development Corp. began construction in summer 2016 on One University Circle, a new 28-story residential tower in University Circle, five miles east of downtown in the vicinity of the Cleveland Clinic, Case Western Reserve University and many of the City’s cultural institutions. Midwest Development Partners and the Coral Company plan to start construction on Centric, a residential and office complex. Site work commenced in December 2016. The two projects represent a total investment in the University Circle area of over $180 million.

In 2013, the Cleveland Clinic demolished a block of buildings across from its campus to make way for a new medical school in partnership with Case Western Reserve University. Originally planned as a 165,000 square foot medical education building, the project has now been expanded to become a Health Education Campus of in excess of 485,000 square feet and a cost over $515 million. The project broke ground on October 1, 2015 and is expected to be completed in mid-2019.

In 2015, Integrated CC LLC, as the developer, commenced construction of the 276-room all service Holiday Inn Cleveland Clinic located on the Cleveland Clinic Campus. The hotel has a full service restaurant and lounge. The hotel is designed to serve the public and the families of overnight patients at the Cleveland Clinic. The $45 million project was financed with bonds issued by the Cleveland-Cuyahoga County Port Authority. The hotel opened for business in May 2016.

The County’s $465 million Convention Center and Global Center for Health Innovation project in the City’s downtown was completed in 2013. The project included an integrated facility for (i) exhibition space and showrooms for medical devices and equipment and related functions (the Global Center for Health Innovation) and (ii) exhibition, tradeshow and conference facilities, meeting rooms and related functions. A $260 million Hilton convention center hotel, funded through bonds issued by the County, opened in mid-2016 in time for the Republican National Convention. The 30-story, 650-room Hilton was built on the site of the former County administration building, which was razed in early 2014. Several other hotels were also completed in time for the Republican National Convention. They include the 481-room Westin, which opened in the spring of 2014; the 150-room Metropolitan, which opened in the fall of 2014; the 120-room Kimpton Schofield which opened in March 2016, and the 180-room Drury Plaza Hotel, which opened in April 2016.

The 1.4 million square foot The 925 Building was purchased by Hudson Holdings which has received State and Federal Historic Tax Credits to renovate the building. The $370 million project includes 600 apartments and 93 micro-units available to companies and workers participating in their business incubator which will be located in the building. The project will also include a 279-room hotel, 300-400,000 square feet of office space, a fitness club and retail space. The building’s lobby will function as events space and lobby for the apartments and hotel. The project is expected to create over 1,500 construction jobs and 1,800 permanent jobs and construction is expected to begin in 2017.

Explorys, a Cleveland Clinic incubated software company, was purchased by IBM which intends to keep the company in the City and plans to add 100 new jobs to its current workforce. They are in the process of constructing a new headquarters in Cleveland at East105th St. & Cedar Avenue, along the Opportunity Corridor.

Stark Enterprises purchased two buildings and a surface parking lot in the City’s downtown and has announced plans to create a 2.6 acre site that will become “nuCLEus”, a $250 million development that will include 500 residential units, 200,000 square feet of office space, 130,000 square feet of retail space, two new parking garages and a new hotel.

The $275 million Cleveland Flats East Development Project Phase I was completed in 2013. This project consisted of an approximately 476,000 square foot, 18-story office tower, an approximately 550- space parking garage, a 150-room Aloft hotel, and approximately 31,000 square feet of restaurant and retail space. The $146 million Phase II included 243 apartments and 80,000 square feet of ground floor restaurant and retail as well as 48,000 square feet of entertainment space. A 1,200 linear foot river walk has been completed and provides access to the riverfront. The Phase II grand opening was held in October 2015. The Metroparks has opened a seasonal water taxi service that connects both sides of the river with plans to connect in the future to a lakefront beach at Wendy Park, furthering the tourist draw to this area.

The Ohio City neighborhood continues to grow and be a destination for residents and tourists. The neighborhood includes the City-owned West Side Market, the oldest continually operating market in the country, which recently celebrated its 100th anniversary. The West 25th Street Lofts Project created 83 loft style apartments and some rooftop penthouse units, as well as 9,100 square feet of commercial space. The last of the apartments were completed in December of 2016. Total project cost was over $60 million. Abode Modern Lifestyle Developers has assembled four acres of land with hopes of constructing a $40 to $50 million new mixed use development. The area has seen more than $15 million in new investment to redevelop over 198,000 square feet of vacant or underutilized mixed use space, including historic renovations and some new construction. The Snavely Group has announced a $60 million mixed-use, mixed-income development that began construction in October 2016. The success of Ohio City investments has led to development moving along the retail corridor on Lorain Avenue, with investors buying buildings from West 25th Street to West 50th Street with a variety of retail and commercial projects that include microbreweries, a home brewing supplier, an organic grocery store, restaurants and a shuffle board club. Many of the buildings are renovating long vacant apartments over the first floor retail space as the Ohio City housing market continues to draw new residents from all income levels looking to be in this walkable, transit-oriented community.

The Detroit Shoreway neighborhood adjacent to Ohio City is also enjoying an arts and entertainment resurgence. The Cleveland Public Theater and Capital Theater were joined in 2015 by a new performing arts venue, the Near West Theatre. The Templin Bradley, a 30-unit mixed income apartment building with both market rate and low-income units, opened in June 2015.

Housing and Neighborhood Development

The City continues to implement strategies to position the City and its neighborhoods to capitalize on future opportunities. The City has identified areas (i) where significant needs must be addressed, (ii) where need and market potential overlap, (iii) where scattered site rehabilitation will be sustainable, and (iv) where the City can create new housing opportunities, particularly for very low income households. In these target areas, the City has focused market-building and stabilization efforts, specifically focused on demolition, housing renovation and land reutilization.

Housing

The City’s housing strategy embodies the core principles of creating healthy mixed-income neighborhoods of choice while preserving and expanding housing opportunities for low and moderate income households. The City has used its funds to develop homes and apartments for low income families and for seniors, and to continue the City’s long term commitment to preserving the existing stock of HUD- assisted rental housing.

All housing development supported by City funding, including tax abatement, complies with the City’s Green Building Standards, which were updated and re-issued in June of 2016. The standards further the City’s commitment to both green building and the ongoing development of quality housing, particularly for low and moderate income families. The City’s Green Building Standards incorporate national standards such as LEED and Enterprise Community Partners’ Green Community Standards.

Large scale housing projects completed in 2016 include A Place for Us Apartments, a 55-unit new construction apartment building near transit for low-income seniors, Sankofa Village, a new construction project of 50 affordable townhouse-style homes in a mixed-income community to replace obsolete public housing units, The Commons at West Village, a 66-unit permanent supportive housing apartment building serving chronically homeless people, and Historic Shoreway Apartments, 21 units of affordable housing in two renovated apartment buildings.

Overall, the downtown housing market has remained strong. The Downtown Cleveland Alliance projects that an additional 1,100 units will come onto the market in 2017. The Schofield Residents recently opened, containing 52 high end units attached to a 128 room boutique hotel. The Edge on Euclid is preleasing for the fall of 2017, which contains 240 luxury student housing units in the Campus District. The Standard will start pre-leasing shortly for its renovation of a 91-year-old office building into 281 market units downtown. The Residences at Leader has started leasing units in its mixed use project containing 224 market units.

Another City focus is the renovation and new construction of single family housing. These efforts resulted in the completion and sale of 122 homes. Renovated homes in the City supported by City funding or tax abatement had a median sale price of $135,916, while the median new home sales price, for new homes receiving similar support, was $335,834. City programs also assisted people with maintaining or repairing their homes. In 2016, 325 families received home repair assistance, including code or safety issues, while 339 families received assistance with energy efficiency improvements.

The City has also partnered with experienced non-profit housing developers and service providers to create permanent supportive housing units for chronically homeless persons with disabilities. Through the Housing First Initiative, over 600 units of such housing have been developed since 2006. Housing First’s building management staff and supportive services staff work together to serve residents providing the support they need to remain housed and achieve other life goals. Funding for the most recent project

supported by the City, Emerald Alliance X, was secured in 2016 to allow construction to commence in 2016 for 60 permanent supportive housing apartments in the Lee-Miles neighborhood.

Habitat for Humanity has continued to expand its affordable home ownership model, renovating 28 homes in 2016.

In 2016, the City continued efforts to assist people in avoiding foreclosure and staying in their homes. A partnership with the Cleveland/Cuyahoga County Office of Homeless Services, Cleveland Tenants Organizations, and other partners, continued to assist residents threatened with the loss of housing.

Demolition

The City has continued an aggressive pursuit of demolition or renovation of distressed properties that have proliferated as a result of foreclosures. The City renewed its code enforcement partnership with community based development corporations. In 2016, the City razed 450 condemned structures at the cost of $4.76 million. Between 2006 and 2016, the City razed 8,808 condemned structures at a cost in excess of $68 million.

These demolitions position the City to be able to eliminate blight and strategically assemble land and to begin site preparation in anticipation of a stronger economy. The local strategies for the re-use of vacant land have been broad, have involved many partners and have been innovative. Those ongoing efforts have been particularly focused on urban gardens and agricultural programs. The City uses Community Development Block Grant funds to contract with The Ohio State University Extension Program to administer the Summer Sprout Community Garden Program, which now includes more than 50 acres at 196 gardens and 3,729 gardeners in all wards of the City. The gardens donated 16,843 pounds of produce to the local food banks and hunger programs in 2015.

Land Reuse

The City has assembled land, and has begun site preparation, in anticipation of a rebound in the housing market. Several sites across the City are, or have been, assembled to be ready for development. One of those sites is under construction for a 72-unit housing project, Trailside at Morgana Run. The first ten units are completed and seven of them have been sold.

Over the past few years, the City has made vacant land reuse a priority – particularly urban agriculture and urban farming. Repurposing vacant urban land into productive community gardens and urban farms makes the City’s neighborhoods more vibrant and sustainable. Specifically, urban agriculture is a means of addressing food deserts, promoting healthy eating, supporting principles of sustainability, and encouraging community engagement and participation.

The Re-Imagining Cleveland Pilot Program encourages the redevelopment of land-bank property as green space, urban agriculture and the expansion of resident’s side yards. This program piloted new policies and procedures for vacant land management, including long-term leases and subsidized access to the City’s water system. It has invested nearly $1.4 million in NSP-1 and NSP-2 funding to fund 63 greening and urban agriculture sites and 73 side yard expansions. The five year pilot program has expired, and sites are being evaluated for sale or lease to the tenants.

The most significant large-scale urban farming initiative is the 28-acre Urban Agriculture Innovation Zone. City-owned vacant land in this area is leased for several urban agriculture programs, including a market farm incubator operated by The OSU Extension.

Brownfield Redevelopment

The City is committed to the elimination of vacant and condemned houses and commercial structures and has identified seven priority areas for potential economic growth. Hundreds of structures have been demolished in these areas to clear and assemble sites for redevelopment. These priority areas were selected because of their proximity to highways and existing infrastructure and the opportunity for economic growth.

Since 2011, the City’s Industrial-Commercial Land Bank facilitated the following reclamation efforts:

• The former Tops grocery store at Superior and Lakeview was taken into the Industrial Commercial Landbank as a deed in lieu of foreclosure action. The property was marketed to a local developer who has created the Shops at Garrett Square attracting a Save-a-Lot and the first Ohio location for Forman Mills. The City and the developer share in the profits from the sale or lease of the outlots. The project has created over 85 jobs to date.

• The former General Motors Fisher Auto Body facility on Coit Road underwent years of environmental remediation and remained vacant. The City worked with Forest City Enterprises to complete the environmental evaluation of the site. A No Further Action Letter (“NFA”) was issued in 2013. Quasar, a bio-digester facility, has purchased five acres in the northern section of the 25 acre site and has completed the City’s first biodigester, creating a sustainable asset available to many businesses to turn waste into power.

• Continued participation in the Northcoast Brownfield Coalition with the County and Port Authority, expending over $1 million in assessment funding. This funding is critical to moving projects forward to development. The City and County assessed over 150 sites by the end of 2013, comprising over 4,000 acres.

• Demolished and remediated the 22-acre Midland Steel property, securing an NFA. The City is currently marketing the site.

• Worked with The Great Lakes Towing Company, the largest tug boat operator on the Great Lakes, to expand their operation and include ship building using a $200,000 EPA Cleanup Grant for redeveloping additional space for their expansion. The City submitted the grant close-out report in 2013. The City and its partners are working with the EPA under the Great Lakes Restoration Initiative to address contamination in the Old River Channel.

• Worked with a local Community Improvement Corporation to use beneficial re-use strategies to redevelop a 60 acre parcel of land that was the former coke plant owned by ArcelorMittal. The site is currently being marketed for redevelopment. The City and its partner have begun the close-out and certification of the site.

• Using $10 million in HUD 108 and Brownfield Economic Development Initiative funds, financed the construction of a cooperatively-owned greenhouse on almost 10 acres in Cleveland’s Central neighborhood. The greenhouse employs neighborhood residents and grows fresh produce for market and local food banks. The greenhouse opened in early 2013 and currently has over 20 employees.

• Secured over $3 million in funding through the Clean Ohio for the assessment and remediation of the Miceli Dairy Company expansion site. The remediation of the site enabled Miceli to complete its $20 million plant expansion including a new welcome center on almost 25 acres of brownfield property.

• Conducted asbestos abatement at the former Warner Swasey facility to prepare the site for redevelopment. The abatement of the facility, located at the prime corner of East 55th and Carnegie, was funded by over $1.1 million in USEPA Revolving Loan Funds through the County and the State. Asbestos abatement was completed in 2013, and the City is currently marketing the site.

• Ohio EPA approved an Urban Setting Designation Study for the City. As a result, costs to remediate property in the City are now significantly decreased.

• Secured $3 million in Clean Ohio funding to support the remediation of the Flats Phase II site, enabling the development of the waterfront entertainment and residential district.

Pension Obligations

Present and retired employees of the City are covered under two statewide public employee retirement (including disability retirement) systems. The Ohio Police and Fire Pension Fund (“OP&FPF”) is applicable to uniformed members of the police and fire departments. All other City employees are covered by the Ohio Public Employees Retirement System (“OPERS”).

OPERS currently reports 346,622 active contributing accounts statewide. The number of active members included in the plan for the City as of March 2017 was approximately 5,119. Employees covered by OPERS contribute at a statutory rate of 10.0% of earnable salary or compensation, and the City contributes 14.0% (actuarially established for OPERS) of the same base. The City’s contribution to OPERS for the year ending December 31, 2016 was approximately $36,439,000.

OP&FPF covers approximately 2,254 City full-time police and fire department employees and currently reports over 27,400 active accounts statewide. Police and fire employees contribute at a statutory rate of 12.25%. The City currently contributes 19.5% for police personnel and 24.0% for fire personnel. The City’s contribution to OP&FPF for the year ending December 31, 2016 was approximately $34,535,000.

For further information on these pension plans, see the financial statements of the City located at www.auditor.state.oh.us. Financial and other information for OPERS and OP&FPF can also be found on the respective website for each retirement system including its Comprehensive Annual Financial Report.

The City’s current employer contributions to OPERS and OP&FPF have been treated as current expenses and are included in the City’s operating expenditures, except to the extent that they are paid from the proceeds of a Police and Fire Pension levy collected by the City.

OPERS and OP&FPF are two of five statewide public employee retirement systems created by and operating pursuant to Ohio law, all of which currently have unfunded actuarial accrued liabilities. The General Assembly has the power to amend (and in the past has amended) the format of those systems and could revise rates or methods of contributions to be made by the City and its employees to OPERS and/or OP&FPF and could also revise benefits or benefit levels. In 2012, the General Assembly passed five separate pension reform bills intended to assist each of the five retirement systems in addressing its unfunded actuarial accrued liabilities. The bills passed with respect to OPERS and OP&FPF provide for

(i) no change in the City contribution rates with respect to its employees’ earnable salaries, (ii) no change in OPERS employee contribution rate, and (iii) an increase in the OP&FPF employee contribution rate from 10% to 12.25% in annual increments of 0.75% in July of each of the years from 2013 through 2015. With certain transition provisions applicable to certain current employees, the bills increase minimum age and service requirements for retirement and disability benefits, revise the calculation of an employee’s final average salary on which pension benefits are based to include the five highest years (rather than the three highest years), provide for OPERS pension benefits to be calculated on a lower, fixed formula, change provisions with respect to future cost–of-living adjustments to limit those adjustments to the lesser of any increase in the Consumer Price Index or three percent, and make other changes. The OP&FPF bill also authorizes the OP&FPF board to further adjust member contribution rates or further adjust age and service requirements after November 1, 2017, if, after an actuarial investigation, the board determines that an adjustment is appropriate.

Federal law requires City employees hired after March 31, 1986 to participate in the federal Medicare program, which requires matching employer and employee contributions, each being 1.45% of the wage base. Otherwise, City employees who are covered by a State retirement system are not currently covered under the federal Social Security Act. OPERS and OP&FPF are not now subject to the funding and vesting requirements of the federal Employee Retirement Income Security Act of 1974.

Employees

As of May 1, 2017, the City had approximately 6,876 full-time employees and 690 part-time employees. Thirty-one bargaining units represent approximately 5,200 employees. The larger units, together with the approximate number of employees represented by those units, include the American Federation of State, County and Municipal Employees, Local 100 (1,103); Cleveland Police Patrolmen’s Association (1,193); the International Association of Firefighters (751); Municipal Foreman and Laborers Union, Local 1099 (438); Teamsters Local 244 (306); and the Fraternal Order of Police (276). There have been no significant labor disputes or work stoppages within the City in the last 32 years.

The City’s three-year labor agreements with its labor unions expired on March 31, 2016. Negotiations have begun on new three-year contracts. Until new contracts are approved, the previous contracts remain operational. Once new contracts are approved and entered into, any changes in pay under the new contracts may be retroactive to the expiration of the prior contracts. Non-union employees may receive the same wage increases as those negotiated with the various unions.

City Council by ordinance establishes schedules of salaries, wages and other benefits for City employees. Generally, the terms of these ordinances have been the product of negotiations with representatives of the employees or bargaining units, and increases in economic benefits have normally been provided on an annual basis.

Chapter 4117 of the Revised Code (the “Collective Bargaining Law”), establishes procedures for, and regulates, public employer-employee collective bargaining and labor relations for the City and other state and local governmental units in Ohio. The Collective Bargaining Law creates a three-member State Employment Relations Board (the “SERB”), which administers and enforces the Collective Bargaining Law. Among other things, the Collective Bargaining Law: (a) creates rights and obligations of public employers, public employees and public employee organizations with respect to labor relations; (b) defines the employees it covers; (c) establishes methods for (i) the recognition of employees and organizations as exclusive representatives for collective bargaining and (ii) the determination of bargaining units; (d) establishes matters for which collective bargaining is either required, prohibited, or optional; (e) establishes procedures for bargaining and the resolution of disputes, including (i) negotiation, (ii) mediation and (iii)

fact finding; and (f) permits all covered employees to strike, except certain enumerated classes of employees, such as police and fire personnel.

Disputes with employees who are prohibited from striking are to be resolved by binding arbitration starting with best offer, on an issue-by-issue basis. In the event that a legal strike presents a clear and present danger to the public health or safety, the appropriate Ohio court of common pleas may issue a temporary restraining order against the strike for a period not to exceed 72 hours, and in such a case the employer may request authorization of the SERB to enjoin the strike beyond the period of the temporary restraining order. The SERB determines whether a clear and present danger to public health or safety exists, and if it so determines, the court of common pleas issuing the temporary restraining order has jurisdiction to enjoin the strike for a period of 60 days after the expiration of the temporary restraining order or when agreement is reached, whichever occurs first. Thereafter, no court has jurisdiction to issue injunctions or other orders, and a strike may be resumed at the end of the 60-day period. The law established certain employers, employee and employee organization unfair labor practices and remedies for unfair labor practices.

Police and Fire Overtime

The City compensates the members of the City’s police and fire departments at a rate of one and one-half times the regular rate of pay for overtime and holidays worked. It has been the City’s practice that, for each one hour unit of overtime or holiday time worked, those employees receive one hour of pay at their regular rate and, at the discretion of the employee, one-half hour of pay at the regular rate or a credit of one-half hour of compensatory time for which they will be paid, to the extent that time is not used as vacation time, at their then current rate of pay upon termination of employment because of death, retirement, resignation, layoff or dismissal. A collective bargaining agreement between the City and the Cleveland Police Patrolmen’s Association provides that employees may request payment of all or part of their compensatory time in money, and that if the requests exceed the total budgeted amount, the requests will be paid on a pro rata basis. Similar agreements have been reached with the Association of Cleveland Firefighters and the Fraternal Order of Police. The total estimated amount of the City’s liability for accumulated compensatory time as of December 31, 2016 was $39,725,000, and that amount is unfunded. That amount was calculated based on the employees’ then existing regular rate of pay. The rate of pay used to determine any cash payments made upon retirement or other termination or upon the request of the employee will be the rate of pay in effect at the time of such determination. The City has budgeted $4,948,800 for payment in 2017 of accrued overtime and other separation benefits anticipated to be payable in connection with retirements. The City has budgeted $625,000 in 2017 for deferred overtime payments requested by employees.

LITIGATION

To the knowledge of the appropriate officials of the City, no litigation or administrative action or proceeding is pending or threatened (a) restraining or enjoining, or seeking to restrain or enjoin (i) the issuance, sale and delivery of the Series 2017A Bonds, (ii) the execution and delivery of the Indenture, including the Ninth Supplemental Indenture, or (iii) the levy and collection of taxes or the pledge of the Revenues or the monies in the Pledged Funds to pay Debt Service Charges on the Series 2017A Bonds, or (b) contesting or questioning (i) the proceedings and authority under which the Series 2017A Bonds have been authorized and are to be issued, sold, executed or delivered or under which the Indenture, including the Ninth Supplemental Indenture, has been executed and delivered, (ii) the validity of the Series 2017A Bonds, the Series 2017A Bond Legislation or the Indenture, including the Ninth Supplemental Indenture, (iii) the tax status of the Series 2017A Bonds, or (iv) the powers of authority of the City with respect thereto. The City will deliver a certificate to that effect to the Underwriters at the time of original delivery of the Series 2017A Bonds to the Underwriters.

The City is a party to various legal proceedings seeking damages or injunctive or other relief generally incidental to its operations. These proceedings are not directly related to the Series 2017A Bonds or the security for the Series 2017A Bonds. The ultimate disposition of these proceedings is not now determinable. It is the opinion of the City’s Director of Law, based on her present understanding and knowledge of these proceedings, that the disposition of these proceedings, individually or in the aggregate, will not result in liabilities in an amount which, in the opinion of the City’s Director of Finance, will have a material adverse effect on the security for the Series 2017A Bonds.

LEGAL MATTERS

Certain legal matters incident to the issuance of the Series 2017A Bonds and with regard to the tax status of the interest on the Series 2017A Bonds (see “TAX MATTERS,” below) are subject to the legal opinions of Squire Patton Boggs (US) LLP, Bond Counsel to the City. The signed legal opinion of Bond Counsel, substantially in the form in Appendix D and premised on law in effect on the date of issuance of the Series 2017A Bonds, will be delivered on the date of issuance of the Series 2017A Bonds. The text of the opinion to be delivered may vary from the text as set forth in Appendix D if necessary to reflect facts and law on the date of delivery. The opinion will speak only as of its date, and subsequent distribution of it by recirculation of this Official Statement or otherwise shall create no implication that Bond Counsel has reviewed or expresses any opinion concerning any of the matters referred to in the opinion subsequent to its date.

The opinion of Bond Counsel and any other legal opinions and letters of counsel to be delivered concurrently with the delivery of the Series 2017A Bonds express the professional judgment of the attorneys rendering the opinions or advice regarding the legal issues and other matters expressly addressed therein. By rendering a legal opinion or advice, the giver of such opinion or advice does not become an insurer or guarantor of the result indicated by that opinion, or the transaction on which the opinion or advice is rendered, or of the future performance of parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction.

Bond Counsel has assisted in drafting those portions of this Official Statement under the captions “The Series 2017A Bonds” (excluding the information concerning the book-entry system there and in Appendix C), “Security and Sources of Payment,” “Tax Matters,” “Appendix A – Summary of Certain Provisions of the Trust Indenture” and “Appendix B – Summary of Certain Provisions of the General Bond Ordinance and the Sinking Fund Ordinance.” Bond Counsel and others, including the Underwriters, Underwriters’ counsel and the financial advisors to the City, have assisted the City with its preparation of certain other portions of this Official Statement. Bond Counsel and those other parties have not been engaged to, and will not, independently confirm or verify that information or any other information provided by the City or others, and will not express an opinion as to the accuracy, completeness or fairness of any such information or any other reports, financial information, offering or disclosure documents or other information pertaining to the Series 2017A Bonds that may be prepared or made available by the City or others to potential or actual purchasers of the Series 2017A Bonds, to owners of the Series 2017A Bonds, including Beneficial Owners, or to others.

In addition to rendering its legal opinions, Bond Counsel will assist in the preparation of and advise the City concerning documents for the bond transcript.

Certain legal matters will be passed upon for the City by its Director of Law and for the Underwriters by Wilkerson & Associates Co., LPA

The City has also retained the legal services of Squire Patton Boggs (US) LLP and Wilkerson & Associates Co., LPA from time to time as special counsel in connection with matters that do not relate to City financings. Squire Patton Boggs (US) LLP also serves as bond counsel for one or more of the political

subdivisions that the City territorially overlaps and has served as counsel to certain of the Underwriters in connection with matters that do not relate to the Series 2017A Bonds.

TAX MATTERS

In the opinion of Squire Patton Boggs (US) LLP, Bond Counsel, under existing law: (i) interest on the Series 2017A Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Series 2017A Bonds is included in the calculation of a corporation’s adjusted current earnings for purposes of, and thus may be subject to, the corporate alternative minimum tax; and (ii) interest on, and any profit made on the sale, exchange or other disposition of, the Series 2017A Bonds are exempt from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax. Bond Counsel expresses no opinion as to any other tax consequences regarding the Series 2017A Bonds.

The opinion on tax matters will be based on and will assume the accuracy of certain representations and certifications, and continuing compliance with certain covenants, of the City contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that the Series 2017A Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of the City’s certifications and representations or the continuing compliance with the City’s covenants.

The opinion of Bond Counsel is based on current legal authority and covers certain matters not directly addressed by such authority. It represents Bond Counsel’s legal judgment as to exclusion of interest on the Series 2017A Bonds from gross income for federal income tax purposes but is not a guaranty of that conclusion. The opinion is not binding on the Internal Revenue Service (“IRS”) or any court. Bond Counsel expresses no opinion about (i) the effect of future changes in the Code and the applicable regulations under the Code or (ii) the interpretation and the enforcement of the Code or those regulations by the IRS.

The Code prescribes a number of qualifications and conditions for the interest on state and local government obligations to be and to remain excluded from gross income for federal income tax purposes, some of which require future or continued compliance after issuance of the obligations. Noncompliance with these requirements by the City may cause loss of such status and result in the interest on the Series 2017A Bonds being included in gross income for federal income tax purposes retroactively to the date of issuance of the Series 2017A Bonds. The City has covenanted to take the actions required of it for the interest on the Series 2017A Bonds to be and to remain excluded from gross income for federal income tax purposes, and not to take any actions that would adversely affect that exclusion. After the date of issuance of the Series 2017A Bonds, Bond Counsel will not undertake to determine (or to so inform any person) whether any actions taken or not taken, or any events occurring or not occurring, or any other matters coming to Bond Counsel’s attention, may adversely affect the exclusion from gross income for federal income tax purposes of interest on the Series 2017A Bonds or the market value of the Series 2017A Bonds.

Interest on the Series 2017A Bonds is included in the calculation of a corporation’s adjusted current earnings for purposes of, and thus may be subject to, the federal corporate alternative minimum tax. In addition, interest on the Series 2017A Bonds may be subject to a federal branch profits tax imposed on certain foreign corporations doing business in the United States and to a federal tax imposed on excess net passive income of certain S corporations. Under the Code, the exclusion of interest from gross income for federal income tax purposes may have certain adverse federal income tax consequences on items of income, deduction or credit for certain taxpayers, including financial institutions, certain insurance companies,

recipients of Social Security and Railroad Retirement benefits, those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations, and individuals otherwise eligible for the earned income tax credit. The applicability and extent of these and other tax consequences will depend upon the particular tax status or other tax items of the owner of the Series 2017A Bonds. Bond Counsel will express no opinion regarding those consequences.

Payments of interest on tax-exempt obligations, including the Series 2017A Bonds, are generally subject to IRS Form 1099-INT information reporting requirements. If a Series 2017A Tax-Exempt Bond owner is subject to backup withholding under those requirements, then payments of interest will also be subject to backup withholding. Those requirements do not affect the exclusion of such interest from gross income for federal income tax purposes.

Bond Counsel’s engagement with respect to the Series 2017A Bonds ends with the issuance of the Series 2017A Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the City or the owners of the Series 2017A Bonds regarding the tax status of interest thereon in the event of an audit examination by the IRS. The IRS has a program to audit tax-exempt obligations to determine whether the interest thereon is includible in gross income for federal income tax purposes. If the IRS does audit the Series 2017A Bonds, under current IRS procedures, the IRS will treat the City as the taxpayer and the beneficial owners of the Series 2017A Bonds will have only limited rights, if any, to obtain and participate in judicial review of such audit. Any action of the IRS, including but not limited to selection of the Series 2017A Bonds for audit, or the course or result of such audit, or an audit of other obligations presenting similar tax issues, may affect the market value of the Series 2017A Bonds.

Prospective purchasers of the Series 2017A Bonds upon their original issuance at prices other than the respective prices indicated on the inside cover pages of this Official Statement, and prospective purchasers of the Series 2017A Bonds at other than their original issuance, should consult their own tax advisors regarding other tax considerations such as the consequences of market discount, as to all of which Bond Counsel expresses no opinion.

Risk of Future Legislative Changes and/or Court Decisions

Legislation affecting tax-exempt obligations is regularly considered by the United States Congress and may also be considered by the State legislature. Court proceedings may also be filed, the outcome of which could modify the tax treatment of obligations such as the Series 2017A Bonds. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Series 2017A Bonds will not have an adverse effect on the tax status of interest or other income on the Series 2017A Bonds or the market value or marketability of the Series 2017A Bonds. These adverse effects could result, for example, from changes to federal or state income tax rates, changes in the structure of federal or state income taxes (including replacement with another type of tax), or repeal (or reduction in the benefit) of the exclusion of interest on the Series 2017A Bonds from gross income for federal or state income tax purposes for all or certain taxpayers.

For example, recent proposals would eliminate, reduce or otherwise alter the tax benefits currently provided to certain owners of state and local government bonds, including proposals that would result in additional federal income tax on taxpayers that own tax-exempt obligations if their incomes exceed certain thresholds. Investors in the Series 2017A Bonds should be aware that future legislative actions (including federal income tax reform) may retroactively change the treatment of all or a portion of the interest on the Series 2017A Bonds for federal income tax purposes for all or certain taxpayers. In such event, the market value of the Series 2017A Bonds may be adversely affected and the ability of holders to sell their Series 2017A Bonds in the secondary market may be reduced. The Series 2017A Bonds are not subject to special

mandatory redemption, and the interest rates on the Series 2017A Bonds are not subject to adjustment, in the event of any such change in the tax treatment of interest on the Series 2017A Bonds.

Investors should consult their own financial and tax advisers to analyze the importance of these risks.

Original Issue Discount and Original Issue Premium

Certain of the Series 2017A Bonds (“Discount Bonds”) may be offered and sold to the public at an original issue discount (“OID”). OID is the excess of the stated redemption price at maturity (the principal amount) over the “issue price” of a Discount Bond. The issue price of a Discount Bond is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Discount Bonds of the same maturity is sold pursuant to that offering. For federal income tax purposes, OID accrues to the owner of a Discount Bond over the period to maturity based on the constant yield method, compounded semiannually (or over a shorter permitted compounding interval selected by the owner). The portion of OID that accrues during the period of ownership of a Discount Bond (i) is interest excluded from the owner’s gross income for federal income tax purposes to the same extent, and subject to the same considerations discussed above, as other interest on the Series 2017A Bonds, and (ii) is added to the owner’s tax basis for purposes of determining gain or loss on the maturity, redemption, prior sale or other disposition of that Discount Bond. The amount of OID that accrues each year to a corporate owner of a Discount Bond is included in the calculation of the corporation’s adjusted current earnings for purposes of, and thus may be subject to, the federal corporate alternative minimum tax. A purchaser of a Discount Bond in the initial public offering at the price for that Discount Bond stated on the cover of this Official Statement who holds that Discount Bond to maturity will realize no gain or loss upon the retirement of that Discount Bond.

Certain of the Series 2017A Bonds (“Premium Bonds”) may be offered and sold to the public at a price in excess of their stated redemption price at maturity (the principal amount). That excess constitutes bond premium. For federal income tax purposes, bond premium is amortized over the period to maturity of a Premium Bond, based on the yield to maturity of that Premium Bond (or, in the case of a Premium Bond callable prior to its stated maturity, the amortization period and yield may be required to be determined on the basis of an earlier call date that results in the lowest yield on that Premium Bond), compounded semiannually. No portion of that bond premium is deductible by the owner of a Premium Bond. For purposes of determining the owner’s gain or loss on the sale, redemption (including redemption at maturity) or other disposition of a Premium Bond, the owner’s tax basis in the Premium Bond is reduced by the amount of bond premium that is amortized during the period of ownership. As a result, an owner may realize taxable gain for federal income tax purposes from the sale or other disposition of a Premium Bond for an amount equal to or less than the amount paid by the owner for that Premium Bond. A purchaser of a Premium Bond in the initial public offering at the price for that Premium Bond stated on the cover of this Official Statement who holds that Premium Bond to maturity (or, in the case of a callable Premium Bond, to its earlier call date that results in the lowest yield on that Premium Bond) will realize no gain or loss upon the retirement of that Premium Bond.

Owners of Discount Bonds and Premium Bonds should consult their own tax advisers as to the determination for federal income tax purposes of the amount of OID or bond premium properly accruable or amortizable in any period with respect to the Discount or Premium Bonds and as to other federal tax consequences and the treatment of OID and bond premium for purposes of state and local taxes on, or based on, income.

INDEPENDENT AUDITOR

The financial statements of the governmental activities, the business-type activities, and each major fund of the City, for the year ending December 31, 2015, have been audited by Clark Schaefer Hackett and accepted by the State of Ohio Office of the Auditor of State (the “Auditor of State”). A complete copy may be obtained from the Director of Finance at the City of Cleveland City Hall, 601 Lakeside Avenue, Cleveland, Ohio 44114. A copy is also currently available at the Auditor of State’s website located at http://www.auditor.state.oh.us. The audited financial statements are public records, no consent to their inclusion is required, and no bring down procedures have been undertaken by the Auditor of State since their date. The City continues to maintain an internal audit function and an active external audit committee.

The 2016 financial audit is in process and the City expects to file the audit with the State Auditor within the 150 days after the end of the fiscal year as required by State law.

RATINGS

Moody’s Investors Service, Inc. (“Moody’s”) and S&P Global Ratings (“S&P”) have assigned their ratings of “A1” and “AA+,” respectively, to the Series 2017A Bonds. No application has been made to any other rating agency for the purpose of obtaining an additional rating on the Series 2017A Bonds.

A rating reflects only the views of the rating agency, and any explanation of the meaning or significance of the rating may only be obtained from the respective rating agency. The City furnished to the rating agencies certain information and materials, some of which may not have been included in this Official Statement, relating to the Series 2017A Bonds and the City. Generally, rating agencies base their ratings on such information and materials on their own investigation, studies and assumptions. There is no assurance that a rating when assigned will continue for any given period of time or that it will not be revised downward or withdrawn entirely by a rating agency if, in its judgment, circumstances so warrant. Any downward revision or withdrawal of a rating may have an adverse effect on the marketability or market price of the Series 2017A Bonds. The City expects to furnish the rating services with information and materials that may be requested. The City, however, assumes no obligation to furnish requested information and materials and may issue debt for which a rating is not requested. Failure to furnish requested information and materials or the issuance of debt for which a rating is not requested may result in the suspension or withdrawal of a rating of the Series 2017A Bonds. The City and the Underwriters have undertaken no responsibility either to bring to the attention of the holders of the Series 2017A Bonds any proposed change in or withdrawal of the ratings or to oppose any revision or withdrawal.

FINANCIAL ADVISORS

The City has retained Government Capital Management, L.L.C. and Phoenix Capital Partners, LLP (the “Financial Advisors”) in connection with the issuance of the Series 2017A Bonds. The Financial Advisors are not obligated to undertake, and have not undertaken to make, an independent verification or to assume the responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. Government Capital Management, L.C.C. and Phoenix Capital Partners, LLP are independent registered municipal advisory firms and are not engaged in the business of underwriting, trading or distributing municipal or other public securities.

UNDERWRITING

US Bancorp (“US Bancorp”), on behalf of itself and as representative for the Underwriters identified on the front cover, has agreed, subject to certain conditions, to purchase the Series 2017A Bonds from the City at an aggregate purchase price of $______(the principal amount of the Series 2017A Bonds, plus $______net original issue premium, and less $______Underwriter’s discount).

The Bond Purchase Agreement with respect to the Series 2017A Bonds provides that the Underwriter will purchase all of the applicable Series 2017A Bonds if any are purchased. The Series 2017A Bonds may be offered and sold by the Underwriters to certain dealers and others at prices lower than the public offering prices shown on the inside cover hereof, and the public offering prices may be changed from time to time by the Underwriters.

US Bancorp has provided the following for inclusion in the Official Statement: "US Bancorp" is the marketing name of U.S. Bancorp and its subsidiaries, including U.S. Bancorp Investments, Inc. ("USBII"), which is serving as an Underwriter for the Series 2017A Bonds and U.S. Bank National Association (“USBNA”), which is serving as Trustee for the Series 2017A Bonds.

VERIFICATION

Prior to the delivery of the Series 2017A Bonds, Causey Demgen & Moore P.C., Denver, Colorado, a firm of independent public accountants, will deliver to the City its attestation report indicating that it has examined, in accordance with standards established by the American Institute of Certified Public Accountants, the information and assertions provided by the City and its representatives regarding the plan of refunding of the Refunded Bonds. Included in the scope of its examination will be a verification of the mathematical accuracy of the mathematical computations of the adequacy of the principal amounts of and the interest on the direct obligations of the United States of America and cash to be held by the Escrow Refunding Agent to provide for the payment of the principal of and interest on the Refunded Bonds when due and upon prior redemption. See “THE SERIES 2017A BONDS- Plan of Refunding.”

TRUSTEE

U.S. Bank National Association (the “Trustee”) will serve as Trustee and bond registrar, paying agent, and transfer and authenticating agent for the Series 2017A Bonds and will keep all books and records necessary for the registration, exchange and transfer of the Series 2017A Bonds, in accordance with the terms of the Indenture.

The Trustee is a national banking association organized and existing under and by virtue of the laws of the United States of America and duly authorized to exercise corporate trust power under Ohio laws. The Trustee maintains its principal corporate trust office in Minneapolis, Minnesota and has branch offices throughout the State. The Trustee regularly acts as bond registrar for bond issues of Ohio local governments through its Cleveland, Ohio office. The Trustee is a member of the Federal Reserve System and FDIC. The Trustee serves as the trustee for the City’s general obligation bonds issued under its General Bonds Ordinance and for various revenue bond issues and serves as the depository bank for various City funds and accounts.

In the absence of an Event of Default and after the cure of any Events of Default that may have occurred, the Trustee will undertake to perform only those duties as are specifically set forth in the Indenture. At the time of an Event of Default and during its continuation, the Trustee will exercise the rights and powers vested in the Trustee by the Indenture and is to use the same degree of care and skill in the exercise as a prudent corporate trustee would exercise or use under the circumstances in the conduct of its own affairs.

CONTINUING DISCLOSURE CERTIFICATE

The City has agreed, for the benefit of the holders and beneficial owners from time to time of the Series 2017A Bonds, in accordance with SEC Rule 15c2-12 (the “Rule”), to provide or cause to be provided to the Municipal Securities Rulemaking Board such annual financial information and operating data,

audited financial statements and notices of the occurrence of certain events in such manner as may be required for purposes of paragraph (b)(5)(i) of the Rule (the “Continuing Disclosure Certificate”). See “APPENDIX E – FORM OF CONTINUING DISCLOSURE CERTIFICATE.” The performance by the City of the Continuing Disclosure Certificate will be subject to the annual appropriation by the City of any funds that may be necessary to perform it. The Continuing Disclosure Certificate will remain in effect only for such period that the Series 2017A Bonds are outstanding in accordance with their terms and the City remains an Obligated Person with respect to the Series 2017A Bonds within the meaning of the Rule.

The City regularly enters into continuing disclosure undertakings under the Rule in connection with its bond offerings. The City believes that it has complied in all material respects with its previous continuing disclosure undertakings under the Rule during the past five years, but the City notes the following instances of noncompliance, including: (i) it did not file or did not file on a timely basis event notices relating to certain changes to ratings assigned to the insurers of insured bonds or to the underlying ratings, (ii) it filed certain annual reports on June 30 of each year, which at times was one or two days later than the 180th day following the end of the fiscal year of the City, (iii) it filed certain annual reports on July 30 or July 31 of each year, which at times was one or two days later than the 210th day following the end of the fiscal year of the City, (iv) in 2012 it mistakenly uploaded the incorrect file for its parking revenue bonds 2011 annual information filing but corrected that filing as soon as the mistake was brought to its attention, (v) it did not file a statement every year that Continental/United Airlines’ annual reports were available on the SEC’s EDGAR website, (vi) certain annual reports filed by the City were not properly matched with all required CUSIP numbers, (vii) it amended one page on its 2013 Airport Annual Filing to add a column of information regarding enplaned passengers that was mistakenly excluded on the original version, (viii) it mistakenly omitted the required “CPP Net Gain of CEI Meters” table from its CPP Annual Filings for Fiscal Years 2010-2013, and (ix) it mistakenly omitted certain required information from the “Debt Service Requirements and Pledged Taxes” table in filings related to the Income Tax Receipts Obligations and the “Total Restricted and Unrestricted Income Tax Receipts” table in filings related to the Series 2008 Subordinate Lien Unrestricted Income Tax Bonds for Fiscal Years 2010-2013, which omissions were corrected in the City’s 2014 Annual Filings for those bonds. All necessary notices and omitted information have been filed prior to the date of this Official Statement. In addition, the City has notified Continental/United Airlines about the necessity of posting on EMMA the availability of its annual reports pursuant to United’s continuing disclosure agreements as an obligated person that were entered into with the trustee of the City’s airport revenue bonds. The foregoing description of instances of non-compliance by the City with continuing disclosure undertakings should not be construed as an acknowledgment that any such instance was material. The City has reviewed the current requirements of the Rule and adopted procedures to ensure full compliance with the Rule.

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CONCLUDING STATEMENT

To the extent that any statements made in this Official Statement involve matters of opinion, forecasts or estimates, whether or not expressly stated to be such, they are made as such and not as representations of facts or certainty, and no representation is made that any of those statements have been or will be realized. Information in this Official Statement has been derived by the City from official and other sources and is believed by the City to be accurate and reliable. Information other than that obtained from official records of the City has not been independently confirmed or verified by the City and its accuracy is not guaranteed.

The summaries and descriptions of provisions of the Indenture and all references to other materials not purporting to be quoted in full are qualified in their entirety by reference to the complete provisions of the documents and other materials summarized or described. Copies of the Indenture may be obtained from the City or, during the offering period, from the Underwriters.

The agreement of the City with the owners of the Series 2017A Bonds is fully set forth in the Indenture. Neither this Official Statement nor any statement that may have been or that may be made orally or in writing is to be construed as or as part of a contract with the original purchasers or subsequent holders of the Series 2017A Bonds.

This Official Statement has been prepared and delivered by the City and executed for and on behalf of the City by its Acting Director of Finance.

CITY OF CLEVELAND, OHIO

By: Director of Finance

APPENDIX A

SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE

The following is a summary of certain provisions of the Trust Indenture. It does not purport to be a complete description of the Trust Indenture and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the Trust Indenture. The following summary supplements the information set forth elsewhere in this Official Statement and should be read in conjunction therewith. Capitalized terms used and not otherwise defined have the meaning given in the Trust Indenture.

Definitions

“Annual Debt Service Requirement” means the principal and interest to be paid on Outstanding Obligations during the applicable Year. For purposes of calculating such requirements:

(a) principal and interest requirements on Obligations, or portions thereof, shall not be included in the computation of the annual principal and interest payments if such principal or interest, or portions thereof, are payable from amounts deposited in trust, escrowed or otherwise set aside for the payment thereof with the Trustee or another Person approved by the Trustee;

(b) any Long-term Obligation having a single principal maturity and no sinking fund redemption requirements, or having 25% or more of the principal amount due in one Year (excluding any principal subject to mandatory sinking fund payments in prior years), or 25% or more of the principal of which may be tendered by the holders at one time or may be required to be tendered or redeemed upon the occurrence of specified events, and any Interim Obligation shall be recast so that (i) such Obligation shall be deemed to bear interest at the Assumed Interest Rate and shall be deemed to be amortized on a level debt service basis over a period of time equal to the Assumed Amortization Period, or (ii) if the City has an enforceable commitment for the refinancing of such Obligation under the terms of a credit facility or otherwise, such Obligation shall be deemed to bear interest and to be payable as to principal according to the terms of that refinancing commitment;

(d) in the case of Obligations secured by a letter of credit, liquidity facility, credit facility or other facility ancillary to an underlying Obligation, the reimbursement obligation of the City to the issuer of the facility shall not be included in the calculation of Annual Debt Service Requirements so long as the principal and interest payments on the Obligations to which the facility relates are included in such calculation;

(e) amounts to be paid and received periodically under a hedge agreement may be excluded from the calculation of Annual Debt Service Requirements if the debt service requirements on the Obligations to which such hedge arrangement relates have been included in the calculation, and any termination payments paid under any such hedge arrangements shall be excluded from the calculation of Annual Debt Service Requirements; and

(f) no obligations to pay principal and interest shall be counted more than once.

“Assumed Amortization Period” means, with respect to any Obligations the principal and interest requirements of which are to be recast for purposes of a calculation of the Annual Debt Service Requirements or in connection with the incurrence of an Interim Obligation, the period of time not exceeding thirty (30) years, set forth in an opinion delivered to the Trustee, of an investment banker selected by the Director of Finance and experienced in underwriting or placing obligations of the type being recast,

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or of another Person selected by the Director of Finance and experienced in the issuance and sale of obligations of such type, as being the maximum period of time over which obligations having comparable terms and security issued or incurred by a municipality of comparable credit standing would, if then being offered, be marketable on reasonable and customary terms.

“Assumed Interest Rate” means, with respect to any Obligations the interest requirements of which are to be assumed or recast for purposes of a calculation of the Annual Debt Service Requirements, the rate per annum determined in accordance with the applicable paragraph set forth below:

(a) with respect to any Obligations that are Variable Rate Obligations, the rate per annum determined, at the election of the City, pursuant to clause (i), (ii), or (iii):

(i) the rate per annum published in The Bond Buyer 20 Bond Index as of a date within 30 calendar days of the date of the calculation of Annual Debt Service Requirements; or

(ii) the average rate per annum which was in effect for 12 out of the last 18 months preceding the date of the calculation of Annual Debt Service Requirements, or, if no rate was in effect for such period of time, then, at the election of the City, the average rate per annum in effect for any lesser period of time or the rate per annum which was in effect on the date on which such Variable Rate Obligations were issued or incurred, adjusted in any case to include the fee paid for any letter of credit used to support or enhance such Variable Rate Obligations and the remarketing fee paid to any Person who remarkets any Variable Rate Obligations pursuant to a remarketing agreement; or

(iii) the fixed rate per annum established under a hedge agreement relating to the Obligation when the City is the fixed rate payor for the duration of the hedge agreement.

(b) with respect to any Obligations that are Fixed Rate Obligations, the rate per annum determined pursuant to clause (i) or clause (ii) below:

(i) the rate per annum equal to (A) ninety percent (90%) if interest on the Obligations is excluded from gross income for federal income tax purposes, or (B) one hundred ten percent (110%), if interest on the Obligations is included in gross income for federal income tax purposes, of the then most recently published daily yields to maturity of United States Treasury securities adjusted to a constant maturity of thirty (30) years as published by the Board of Governors of the Federal Reserve System; or

(ii) the rate per annum set forth in an opinion delivered to the Trustee by an investment banker selected by the Director of Finance and experienced in underwriting obligations of the type being recast, or of another Person selected by the Director of Finance and experienced in the issuance and sale of obligations of such type, as being the lowest rate of interest (which may be a rate which reflects any exclusion from gross income of such interest for federal income tax purposes if such exclusion is then available) at which obligations having comparable terms and security, amortized on a level debt service basis over a period of time equal to the Assumed Amortization Period, and issued or incurred by municipalities of comparable credit standing would, if then being offered, be marketable on reasonable and customary terms.

“Bond” or “Bonds” means the Series 2008 Bonds, the Series 2010 Bonds, the Series 2012 Bonds, the Series 2013A Bonds, the Series 2014A Bonds, the Series 2014B Bonds, the Series 2015A Bonds, the Series 2015B Bonds, the Series 2017A Bonds, and any other Bonds issued and Outstanding under the Trust Indenture and the Supplemental Indentures, as provided in Article II of the Trust Indenture.

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“Book-entry form” or “book-entry-only system” means a form or system, as applicable, under which (a) the ownership of beneficial interests in Bonds and Debt Service Charges may be transferred only through a book-entry and (b) physical Bond certificates in fully-registered form are registered only in the name of a Depository or its nominee as Holder, with the physical Bond certificates “immobilized” in the custody of the Depository. The book-entry-only system is maintained by and is the responsibility of the Depository and not the City or the Trustee. The book-entry is the record that identifies, and records the transfer of the interest of, the owners of beneficial (book-entry) interests in the Bonds.

“Debt Service” or “Debt Service Charges” means, for any period of time, the principal of (whether at stated maturity, by mandatory sinking fund redemption, by acceleration or otherwise) and interest and any premium due on the Obligations for that period or payable at that time, as the case may be.

“Debt Service Fund” means the City of Cleveland, Subordinate lien Income Tax Bonds – Debt Service Fund created in the Trust Indenture.

“Debt Service Reserve Requirement” means, with respect to any series of Bonds, the amount, if any, required under the Supplemental Indenture for that series to be maintained in the Debt Service Reserve Fund. There is no Debt Service Reserve Requirement for the Series 2017A Bonds.

“Defeasance Obligations” means:

(a) Direct Obligations;

(b) certificates or receipts representing direct ownership of future interest or principal payments on direct obligations of, or obligations fully guaranteed by, the United States of America or any of its agencies or instrumentalities the obligations of which are backed by the full faith and credit of the United States of America, which obligations (i) are held by a custodian in safekeeping on behalf of the holder of such receipts and (ii) are rated or assessed in the highest category for long term debt by a Rating Service then maintaining a rating on the Bonds; or

(c) obligations of any state or any political subdivision of any state, other than the City, which are rated in the highest category for long term debt by a Rating Service, the interest on which is excluded from gross income for federal income tax purposes and the full and timely payment of the principal of and any premium and the interest on which is fully and unconditionally payable from obligations of the character described in (a) or (b) above.

“Direct Obligations” means direct obligations of the United States of America whether in certificated or book-entry form and securities the timely payment of the principal of and interest on which is fully guaranteed by the United States of America, provided that the full faith and credit of the United States of America must be pledged to any such direct obligations or guarantee.

“Fixed Rate Obligation” means any Obligation the yield on which is fixed and determinable to the maturity date of the Obligation.

“General Bond Ordinance” means Ordinance No. 1749-80 passed by City Council on October 8, 1980, as amended by Ordinance No. 1112-83 passed by City Council on May 6, 1983, and Ordinance No. 944-96, passed by City Council on June 10, 1996, as the same may further be amended from time to time in accordance with its provisions.

“General Obligation Bonds” means any outstanding bonds or notes issued and secured under the General Bond Ordinance.

“Interim Obligation” means any Obligation with a maximum maturity of not more than five years incurred or assumed in anticipation of being refinanced or refunded by Long-Term Obligations.

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“Long Term Obligation” means any Obligation maturing over more than five years.

“Obligations” means Bonds, Notes, Parity Obligations, General Obligation Bonds and Unrestricted Income Tax Obligations.

“Outstanding” or “outstanding” as applied to Obligations means, as of the applicable date, all Obligations that have been issued and delivered, or incurred, except in each case:

(a) Obligations canceled upon surrender, exchange or transfer, or canceled because of payment or redemption on or prior to that date;

(b) Obligations, or the portion thereof, for the payment, redemption or purchase for cancellation of which sufficient moneys shall have been deposited and credited with the applicable trustee or paying agent on or prior to that date for that purpose (whether upon or prior to the maturity or redemption date of those Obligations); provided that if any of those Obligations are to be redeemed prior to their maturity, notice of that redemption shall have been given or arrangements shall have been made for giving notice of that redemption, or waiver of that notice shall have been given by the owners of those Obligations;

(c) Obligations, or the portion thereof, which are deemed to have been paid and discharged pursuant to the provisions of the applicable indenture or other agreement securing them; and

(d) Obligations in lieu of which others have been authenticated.

For purposes of any consent or other action to be taken by the owners of a specified percentage of the Aggregate Principal Amount of all Obligations or Obligations of any series, Obligations held by or for the account of the City shall be excluded.

“Parity Obligations” means any obligations issued or incurred by the City that are secured by a pledge of Revenues on a parity with the pledge securing Bonds and Notes issued under the Trust Indenture, subject to compliance with Article XI of the Trust Indenture.

“Permitted Investments” means to the extent permitted by law (with all references to “Bond Insurer” having the meaning given in the First Supplemental Indenture, dated as of April 1, 2008, and the Second Supplemental Indenture, dated as of June 1, 2010, each between the Trustee and the City):

(a) Direct Obligations;

(b) Federal Housing Administration debentures;

(c) obligations of the following government-sponsored agencies which are not backed by the full faith and credit of the United States of America: Federal Home Loan Mortgage Corporation (“FHLMC”) senior debt obligations and participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts), Farm Credit System (formerly Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives) consolidated system-wide bonds and notes, Federal Home Loan Banks (“FHL Banks”) consolidated debt obligations, and Federal National Mortgage Association (“FNMA”) senior debt obligations and mortgage-backed securities (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts);

(d) unsecured certificates of deposit, time deposits, and bankers’ acceptances (having maturities of not more than 365 days) of any bank the short-term obligations of which are rated “A- 1+” or better by S&P and “Prime-1” by Moody’s;

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(e) deposits, the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation, in banks which have capital and surplus of at least $15 million;

(f) commercial paper (having original maturities of not more than 270 days) rated “A- 1+” by S&P and “Prime-1” by Moody’s;

(g) money market funds rated “Aam” or “AAm-G” or better by S&P, and if rated by Moody’s rated “Aa2” or better;

(h) state obligations that are:

(i) direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated at least “A3” by Moody’s and at least “A-” by S&P, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated,

(ii) direct general short-term obligations of any state agency or subdivision or agency thereof described in (i) above and rated “A-1+” by S&P and “MIG-1” by Moody’s, or

(iii) special revenue bonds (as defined in the United States Bankruptcy Code) of any state or state agency described in (ii) above and rated “AA-” or better by S&P and “Aa3” or better by Moody’s;

(i) pre-refunded municipal obligations rated “AAA” by S&P and “Aaa” by Moody’s meeting the following requirements:

(i) the municipal obligations are (A) not subject to redemption prior to maturity or (B) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions,

(ii) the municipal obligations are secured by cash or Direct Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations,

(iii) the principal of and interest on the Direct Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations (“Verification Report”),

(iv) the cash or Direct Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations,

(v) no substitution of a Direct Obligation shall be permitted except with another Direct Obligation and upon delivery of a new Verification Report, and

(vi) the cash or Direct Obligations are not available to satisfy any other claims, including those by or against the trustee or an escrow agent;

(j) repurchase agreements with any domestic bank, or domestic branch of a foreign bank, the long term debt of which is rated at least “A-” by S&P and “A3” Moody’s, or any broker-

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dealer with retail customers or a related affiliate thereof which broker-dealer has, or the parent company (which guarantees the provider) of which has, long-term debt rated at least “A-” by S&P and “A3” by Moody’s, which broker-dealer falls under the jurisdiction of the Securities Investors Protection Corporation, or any other entity rated at least “A-” by S&P and “A3” Moody’s and acceptable to the Bond Insurer (each an “Eligible Provider”), provided that:

(i) permitted collateral shall include Direct Obligations, or senior debt obligations of Government National Mortgage Association (“GNMA”), FNMA or FHLMC (no collateralized mortgage obligations shall be permitted for these providers), and collateral levels must be at least 102% of the total principal when the collateral type is Direct Obligations, 103% of the total principal when the collateral type is GNMA’s and 104% of the total principal when the collateral type is FNMA and FHLMC (“Eligible Collateral”),

(ii) the Trustee or a third party acting solely as agent therefor or for the City (the “Custodian”) has possession of the collateral or the collateral has been transferred to the Custodian in accordance with applicable state and federal laws (other than by means of entries on the transferor’s books) and such collateral shall be marked to market,

(iii) the collateral shall be marked to market on a daily basis and the provider or Custodian shall send monthly reports to the Trustee, the City and the Bond Insurer setting forth the type of collateral, the collateral percentage required for that collateral type, the market value of the collateral on the valuation date and the name of the Custodian holding the collateral,

(iv) the repurchase agreement (or guaranty, if applicable) may not be assigned or amended without the prior written consent of the Bond Insurer;

(v) the repurchase agreement shall state, and an opinion of counsel shall be rendered at the time such collateral is delivered, that the Custodian has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof, and

(vi) the repurchase agreement shall provide that if during its term the provider’s rating by either Moody’s or S&P is withdrawn or suspended or falls below “A-” by S&P or “A3” by Moody’s, as appropriate, the provider must notify the City, the Trustee and the Bond Insurer within five (5) days of receipt of such notice. Within ten (10) days of receipt of such notice, the provider shall either: (A) provide a written guarantee acceptable to the Bond Insurer, (B) post Eligible Collateral, or (C) assign the agreement to an Eligible Provider. If the provider does not perform a remedy within ten (10) business days, the provider shall, at the direction of the Trustee (who shall give such direction if so directed by the Bond Insurer) repurchase all collateral and terminate the repurchase agreement, with no penalty or premium to the City or the Trustee.

(k) investment agreements with a domestic or foreign bank or corporation the long- term debt of which, or, in the case of a guaranteed corporation the long-term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least “AA-” by S&P and “Aa3” by Moody’s, and acceptable to the Bond Insurer (each an “Eligible Provider”); provided that:

(i) interest payments are to be made to the Trustee at times and in amounts as necessary to pay Debt Service Charges (or, if the investment agreement is for a project fund at the time needed for the project),

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(ii) the invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven days’ prior notice,

(iii) the provider shall send monthly reports to the Trustee, the City and the Bond Insurer setting forth the balance the City or Trustee has invested with the provider and the amounts and dates of interest accrued and paid by the provider,

(iv) the investment agreement shall state that is an unconditional and general obligation of the provider, and is not subordinated to any other obligation of, the provider thereof or, if the provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pari passu with the obligations of the provider to its other depositors and its other unsecured and unsubordinated creditors,

(v) the investment agreement (or guaranty, if applicable) may not be assigned or amended without the prior written consent of the Bond Insurer,

(vi) the City, the Trustee and the Bond Insurer shall receive an opinion of domestic counsel to the provider that such investment agreement is legal, valid, binding and enforceable against the provider in accordance with its terms,

(vii) the City, the Trustee and the Bond Insurer shall receive an opinion of foreign counsel to the provider (if applicable) that (A) the investment agreement has been duly authorized, executed and delivered by the provider and constitutes the legal, valid and binding obligation of the provider, enforceable against the provider in accordance with its terms, (B) the choice of law of the state set forth in the investment agreement is valid under that country’s laws and a court in such country would uphold such choice of law, and (C) any judgment rendered by a court in the United States would be recognized and enforceable in such country,

(viii) the investment agreement shall provide that if during its term:

(A) the provider’s rating by either S&P or Moody’s falls below “AA-” or “Aa3”, the provider shall, at its option, within ten (10) days of receipt of publication of such downgrade, either (I) provide a written guarantee acceptable to the Bond Insurer, (II) post Eligible Collateral with the City, the Trustee or a third party acting solely as agent therefore (the “Custodian”) free and clear of any third party liens or claims, or (III) assign the agreement to an Eligible Provider, or (IV) repay the principal of and accrued but unpaid interest on the investment,

(B) the provider’s rating by either S&P or Moody’s is withdrawn or suspended or falls below “A-” or “A3”, the provider must, at the direction of the City or the Trustee (who shall give such direction if so directed by the Bond Insurer), within ten (10) days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the City or Trustee;

(ix) in the event the provider is required to collateralize, permitted collateral shall include Direct Obligations or senior debt obligations of GNMA, FNMA or FHLMC (no collateralized mortgage obligations shall be permitted for these providers) and collateral levels must be 102% of the total principal when the collateral type is Direct Obligations, 103% of the total principal when the collateral type is GNMA’s and 104% of the total principal when the collateral type is FNMA and FHLMC (“Eligible Collateral”). In addition, the collateral shall be marked to market on a daily basis and the provider or

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Custodian shall send monthly reports to the Trustee, the City and the Bond Insurer setting forth the type of collateral, the collateral percentage required for that collateral type, the market value of the collateral on the valuation date and the name of the Custodian holding the collateral,

(x) the investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Custodian has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof, and

(xi) the investment agreement must provide that if during its term: (A) the provider shall default in its payment obligations, the provider’s obligations under the investment agreement shall, at the direction of the City or the Trustee (who shall give such direction if so directed by the Bond Insurer), be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the City or Trustee, as appropriate, and (B) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc., the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the City or Trustee, as appropriate;

(l) investments in the Ohio subdivisions fund created and maintained pursuant to Section 135.45 of the Revised Code or any successor or similar fund, such fund being an investment pool established in the custody of the State Treasurer subject to the same limitations on investment of State money, except that such pooled investment funds may not be invested in certain linked deposits (e.g., agriculture and small business) otherwise permitted for investment of State funds under Ohio law; and

(m) such other investments as may be made only for the purpose of preventing any Bonds from becoming “arbitrage bonds” under Section 148 of the Code, provided that prior to such investment, the Trustee or the City, as the case may be, has obtained the written opinion of nationally recognized bond counsel that such investment will not affect the exclusion of interest on the Bonds from gross income for federal income tax purposes.

The maturity of Eligible Investments shall be governed by the following: (i) investments of money (other than reserve funds) shall be in securities and obligations maturing not later than the dates on which such money will be needed to make payments; and (ii) investments shall be considered as maturing on the first date on which they are redeemable without penalty at the option of the holder or the date on which the Trustee may require their repurchase pursuant to repurchase agreements.

“Pledged Funds” means (a) as to all Bonds issued under the Trust Indenture, the Debt Service Fund, and (b) as to any series of Bonds, any other funds established and pledged as security for that series of Bonds under the Supplemental Indenture for that series.

“Revenues” means the income tax receipts of the City remaining after there has been paid to the Escrow Agent under the General Bond Ordinance the amount required by the General Bond Ordinance to be withheld for payment of debt service on the General Obligation Bonds.

“Subsidy Payments” means credit payments allowed pursuant to Section 54AA(g) of the Code with respect to the Series 2010A-2 Bonds (the Build America Bonds) and pursuant to Section 1400U-2 of the Code with respect to Series 2010B Bonds and the Series 2010C Bonds the (Recovery Zone Economic Development Bonds), each of which are payable to the City by the U.S. Treasury as provided in Section 6431 of the Code.

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“Supplemental Indenture” means any indenture supplemental to the Trust Indenture entered into between the City and the Trustee to provide the particular terms of a series of Bonds or for any of the other purposes permitted by the Trust Indenture.

“Trust Indenture” means the Trust Indenture dated as of April 1, 2008, as amended by Section 6.1 of the Second Supplemental Trust Indenture dated as of June 1, 2010, each between the City and the Trustee.

“Unrestricted Income Tax Obligations” means (a) the City’s Subordinated Income Tax Bonds, Series 2008 (Police and Fire Pension Payment), dated August 6, 2008, and currently outstanding in the principal amount of $3,985,000 and the City’s Subordinate Lien Unrestricted Income Tax Refunding Bonds, Series 2015 (Police & Fire Pension Payment), dated November 18, 2015, and currently outstanding in the principal amount of $28,975,000 (together, the “Pension Bonds”), any obligations of the City under standby bond purchase agreements or letter of credit agreements or other credit or liquidity facilities relating to the Pension Bonds, and any obligations of the City under interest rate exchange or hedge agreements relating to the Pension Bonds, and (b) any additional Obligations issued or incurred by the City that are secured by a pledge of the Unrestricted Income Taxes subordinate to the pledge given under the General Bond Ordinance and on a parity with the pledge given to Bonds under the Trust Indenture, subject to compliance with Article XI of the Trust Indenture.

“Unrestricted Income Taxes” means the gross income tax receipts of the City net of the amount restricted by Chapter 191 of the Codified Ordinances of the City to the payment of capital expenditures.

“Variable Rate Obligation” means any Obligations that are not Fixed Rate Obligations.

“Year” means the fiscal year of the City, which is presently the calendar year.

Security for the Bonds

Bonds issued under the Trust Indenture are special obligations payable solely from, and secured by a lien on, the Revenues and the Pledged Funds. However, any assignment or pledge of or lien on any fund, account, receivable, revenue, money or other intangible property not in the custody of the Trustee shall be valid and enforceable only to the extent permitted by law.

The Bonds are special obligations of the City. The Bonds do not and shall not constitute general obligation debt of the City or a pledge of the full faith and credit of the City. The Holders of Bonds shall have no right to have excises or taxes levied by City Council, other than the City income tax, or by the State or the taxing authority of any other political subdivision of the State for the payment of the Debt Service Charges on the Bonds.

Application of Revenues

The Trust Indenture establishes the Debt Service Fund in the custody of the Trustee, and provides for the monthly deposit of Revenues to the Debt Service Fund to provide for the payment of Debt Service Charges on the Bonds.

Provision may be made in any Supplemental Indenture for the establishment of a Debt Service Reserve Fund as security for one or more series of Bonds. There is no Debt Service Reserve Fund for the Series 2017A Bonds or any of the outstanding Bonds.

So long as any Bonds remain outstanding, the following payments shall be made from the Revenues to the following Funds and accounts and in the following order:

First:

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(a) Into the Interest Payment Account of the Debt Service Fund, on or before the last day of each month (or such other date as may be provided in any Supplemental Indenture), after giving effect to any amounts on deposit in that Account, an amount such that, if the same amount were paid in each of the months preceding the next Interest Payment Date (as defined in the Trust Indenture), the aggregate of the amounts so paid would be sufficient to pay the interest due and payable on all outstanding Bonds on the next Interest Payment Date, and

(b) Into the Principal Payment Account of the Debt Service Fund, on or before the last day of each month (or such other date as may be provided in any Supplemental Indenture), after giving effect to any amounts on deposit in that Account, an amount such that, if the same amount were so paid in each of the months preceding the next date on which principal of outstanding Bonds matures or is subject to mandatory redemption pursuant to Mandatory Sinking Fund Requirements, the aggregate of the amounts so paid would be sufficient to pay the principal amount of all outstanding Bonds due and payable on that next principal payment date as a result of maturity and Mandatory Sinking Fund Requirements.

Second:

(a) Into any Debt Service Reserve Fund established under any Supplemental Indenture for any series of Bonds, such amounts on such dates as may be provided in that Supplemental Indenture. That Supplemental Indenture may provide that in lieu of any required deposits of cash or Permitted Investments into the Debt Service Reserve Fund or in substitution for any cash or Permitted Investments on deposit in the Debt Service Reserve Fund, the City may cause to be deposited a letter of credit, a municipal bond insurance policy, a surety bond or other credit facility.

Debt Service Charges on Bonds issued under the Trust Indenture shall be payable equally and ratably from, and secured by a pledge of and lien on, the Revenues and the Pledged Funds.

Covenants of the City Concerning the Revenues

(a) So long as Bonds are outstanding under the Trust Indenture, the City pledges the municipal income taxes of the City and grants a lien thereon, subordinate to the lien granted in the General Bond Ordinance as security for the General Obligation Bonds of the City issued and outstanding under the General Bond Ordinance, to the full extent required to pay Debt Service Charges on the Bonds issued and outstanding under the Trust Indenture. The City further covenants that so long as any Bonds are outstanding under the Trust Indenture, the City shall not repeal or amend, or suffer the appeal or amendment of, any ordinance for the levy or collection of its income taxes in any manner or to such extent that the City would not be able to meet its obligations to the Holders of the Bonds.

(b) The City will not assign the Revenues or create or authorize to be created any debt, lien, security interest or charge thereon, other than the security interest given in the General Bond Ordinance, the security interest given under the Trust Indenture, the security interest given to secure the Unrestricted Income Tax Obligations, and the security interests permitted to be given to secure Parity Obligations.

(c) The City shall appropriate in its annual appropriation measure for each Year (including any temporary appropriation measure) Revenues in an amount sufficient to pay all Debt Service Charges on the General Obligation Bonds, the Bonds, any Parity Obligations and the Unrestricted Income Tax Obligations due and payable during the then current Year. In the event that 10 days prior to any Interest Payment Date the amount in the Debt Service Fund is not sufficient to pay Debt Service Charges due and payable on that Interest Payment Date, the City immediately shall, if necessary, make a supplemental appropriation for, and shall deposit into the Debt Service Fund, an amount sufficient to make up any such deficiency. With respect to Bonds or Notes that

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are Variable Rate Obligations, those appropriations shall assume that the Variable Rate Obligations bear interest at the Assumed Interest Rate. Provision may be made in any Supplemental Indenture for Bonds or Notes that are Variable Rate Obligations for the appropriation of amounts owed to providers of credit enhancement and liquidity support and remarketing agents for those Bonds.

Additional Bonds

The City shall have the right from time to time to issue additional Bonds under the Trust Indenture and a Supplemental Indenture for any lawful purpose. Bonds of any series issued under the Trust Indenture shall be on a parity with Bonds of every other series theretofore or thereafter issued under the Trust Indenture with respect to the pledge under the Trust Indenture of the Revenues. The Supplemental Indenture for each series of Bonds shall specify whether that series is to be secured by a Debt Service Reserve Fund. Nothing in the Trust Indenture prevents payment of Debt Service Charges on any series of Bonds from (a) being otherwise secured and payable from sources or by property or instruments not applicable to another series of Bonds or (b) not being secured or protected from sources or by property or instruments applicable to another series of Bonds.

As a precondition to the issuance of any Bonds, the City shall have furnished to the Trustee a certificate of the Director of Finance of the City to the effect that the highest aggregate Annual Debt Service Requirement in the current or any subsequent Year for all Outstanding General Obligation Bonds, all Bonds and Notes Outstanding under the Trust Indenture, any outstanding Parity Obligations, any outstanding Unrestricted Income Tax Obligations, and the Bonds proposed to be issued, net of Subsidy Payments and any other grants or payments to be provided to the City for the payment of debt service on such obligations by the government of the United States of America or the State of Ohio, or any officer, department, agency, instrumentality or corporation thereof or created thereby, under law or then existing agreement, does not exceed 50% of the income tax collections for the most recently completed Year for which audited financial statements are available, adjusted for any subsequent change in the City’s rate of income tax.

For purposes of the foregoing calculation, the Annual Debt Service Requirements on Outstanding General Obligation Bonds shall be net of the amount of ad valorem property taxes pledged under the General Bond Ordinance to the payment of the General Obligation Bonds, as shown in the audited financial statements used for making that calculation, adjusted for any subsequent change in the rate of such taxes. In the case of the issuance of Bonds for the purpose of refunding any outstanding Obligations, the Annual Debt Service Requirements of the refunding Bonds shall be used in lieu of the Annual Debt Service Requirements of the Obligations being refunded.

Parity Obligations

The City may issue or incur Parity Obligations secured on a parity with the Bonds issued under the Trust Indenture with respect to the pledge of and security interest in the Revenues (a) to secure its obligations under a reimbursement agreement with a bank issuing a letter of credit or liquidity facility, for Bonds, Notes or Parity Obligations or to secure the City’s obligations under other agreements with other providers of other credit enhancement or liquidity facilities for Bonds or Parity Obligations; (b) in connection with interest rate exchanges, swaps or hedges; and (c) for any purposes for which Bonds may be issued, provided that the provisions described above under “Additional Bonds” are met, treating in each case the Parity Obligations proposed to be incurred as Bonds. Prior to the incurrence of any Parity Obligations, the City will provide evidence satisfactory to the Trustee that each of the following conditions has been satisfied and will deliver to the Trustee the following instruments and documents:

(a) any instrument or document evidencing the Parity Obligations, which shall include:

(i) a cross default provision with respect to the Trust Indenture;

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(ii) provisions (which may be contained in a separate agreement to which the Trustee is a party) to the effect that, prior to exercising any remedies upon a default or event of default by the City under any instrument or document relating to the Parity Obligations, the holders of the Parity Obligations (or a trustee representing their interests) shall cooperate with the Trustee to the end that the interests of those holders and the Bondholders shall be protected equally and ratably with respect to the Revenues;

(iii) any additional provisions which are deemed by the Trustee to be necessary or advisable to provide for cooperation between those holders (or that trustee) and the Bondholders or the Trustee in view of the parity nature of Bonds and the Parity Obligations with respect to any payment from Revenues;

(iv) a provision that all Parity Obligations and Bonds shall be payable from the Revenues secured equally and ratably by all security provided for either or both, except that Parity Obligations shall not be protected or secured by the Debt Service Fund or any Debt Service Reserve Fund; and

(b) due authorization for the incurrence by the City of the Parity Obligations.

In connection with the incurrence of Parity Obligations, there shall be delivered to the Trustee (a) an opinion of nationally recognized bond counsel, satisfactory in form and substance to the Trustee, to the effect that each of the instruments and documents described above complies with the requirements of this Section and is a legal, valid, binding and enforceable obligation of the City, and (b) in the case of any instrument or document under which a counterparty is secured on a parity with the security for the Bonds, an opinion of counsel to that counterparty, satisfactory in form and substance to the Trustee, to the effect that each of the instruments or documents to which the counterparty is a party is a legal, valid, binding and enforceable obligation of the counterparty. Those opinions of bond counsel and counsel to a counterparty may contain appropriate exceptions for bankruptcy, insolvency and similar laws and for equitable principles. Those opinions shall be delivered to the Trustee prior to the incurrence of the Parity Obligation.

Within a reasonable period of time following the issuance of any Parity Obligation, the City shall deliver to the Trustee conformed copies of all instruments and documents supporting or evidencing the Parity Obligation.

Annual Audit

The City agrees that it shall request the State Auditor to conduct annual audits of its financial statements. If the State Auditor has not commenced such audit on or before December 31 of the year following the year with respect to which audited financial statements are required to be produced, the City agrees that it shall request the State Auditor to immediately commence such an audit, and if the State Auditor is unable to so commence such an audit, shall request the State Auditor to authorize the City to engage an independent certified public accountant to conduct the required audit. If so authorized, the City agrees that it shall engage an independent certified public accountant to conduct the required audit.

Investment of Pledged Funds

Moneys held in the Debt Service Fund will be invested and reinvested by the Trustee in Permitted Investments in accordance with instructions of the City. All of the Permitted Investments are subject to and qualified by the restrictions and limitations enumerated in the Trust Indenture.

Any investments in any Fund or Account will be deemed at all times a part of the Fund or Account from which the investment has been made. Profits and losses on investments will be charged to the Fund or Account from which the investment was made.

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Events of Default and Remedies

Events of Default. The occurrence of any of the following events constitutes an Event of Default under the Trust Indenture: (a) failure by the City to pay interest on any Bond when that interest shall become due and payable; (b) failure of the City to pay the principal of or any premium on any Bond when and as that principal or premium becomes due and payable, whether at stated maturity, by redemption, pursuant to any Mandatory Sinking Fund Requirements, by acceleration or otherwise; (c) failure by the City to observe or perform any other covenant, agreement or obligation of the City contained in the Bonds or in the Trust Indenture and the continuation of that failure for 90 days after written notice of that failure is given to the City by the Trustee; provided that if the failure does not involve payment of money and is of such nature that it can be corrected but not within the applicable period, then such failure is not an Event of Default so long as the City institutes and diligently pursues curative action within the applicable period and diligently pursues that action to completion; or (d) the occurrence of an event of default with respect to any General Obligation Bonds or Parity Obligations resulting from a failure by the City to pay Debt Service Charges on those Obligations.

If, by reason of Force Majeure (as defined in Article VII of the Trust Indenture), the City is unable to observe or perform any covenant, agreement or obligation that would give rise to an Event of Default under clause (c) above, the City shall not be deemed in default during the continuance of such inability. The City shall promptly give notice to the Trustee of the existence of an event of Force Majeure and shall use its best efforts to remove the effects thereof, provided that the settlement of strikes or other such disturbances shall be entirely within its discretion.

If an Event of Default shall occur, the Trustee shall give written notice of the Event of Default to the City, the Registrar, every Paying Agent, every Authenticating Agent, and the Original Purchaser of each series of Bonds, within five days after the Trustee has knowledge of the Event of Default. If an Event of Default occurs of which the Trustee has notice pursuant to the Trust Indenture, the Trustee shall give written notice thereof, within 30 days after the Trustee’s receipt of notice of its occurrence, to the holders of the Bonds then outstanding as shown by the Register at the close of business 15 days prior to the mailing of that notice.

Subject to the rights of the trustee for the General Obligation Bonds to enforce and protect the first lien on the income tax receipts of the City given as security for the payment of Debt Service Charges on the General Obligation Bonds, upon the occurrence and continuance of an Event of Default, the Trustee may pursue any available remedy to enforce the payment of Debt Service Charges or the observance and performance of any other covenant, agreement or obligation under the Trust Indenture or any other instrument providing security, directly or indirectly, for the Bonds. Subject to the foregoing, the Trustee may declare, and upon the written request of the Holders of not less than 25% in Aggregate Principal Amount of the Bonds then outstanding the Trustee shall declare, by notice in writing delivered to the City, the principal of all the Bonds then outstanding (if not then due and payable), and the interest accrued thereon, to be due and payable immediately, and upon that declaration, that principal and interest shall become and be immediately due and payable. Interest on the Bonds, the principal maturity of which is accelerated shall accrue to the date determined by the Trustee for the tender of payment to the Holders pursuant to that declaration; provided that interest on any unpaid principal of such Bonds outstanding shall continue to accrue from the date determined by the Trustee for the tender of payment to those Holders.

The provisions of the preceding paragraph are subject, however, to the condition that if, at any time after the declaration of acceleration and prior to the entry of a judgment in a court for enforcement (after an opportunity for a hearing by a City), the City should pay all amounts payable under the Trust Indenture (except the principal of and interest on Bonds that have not reached their stated maturity dates and that are due and payable solely by reason of that declaration of acceleration) plus interest to the extent permitted by law on any overdue installments of interest at the rate borne by the Bonds and all Events of Default have

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been cured, then the Trustee shall waive the Event of Default but will not waive or effect any subsequent Event of Default or impair any rights consequent thereon.

Upon the occurrence and continuance of an Event of Default, the Trustee may, and if requested so to do by the holders of at least 25% in aggregate principal amount of Bonds then outstanding shall, pursue any available remedy to enforce the payment of Debt Service Charges or the observance and performance of any other covenant, agreement or obligation under the Trust Indenture, or any other instrument providing security, directly or indirectly, for the Bonds.

No remedy conferred upon or reserved by the Trustee (or to the holders) by the Trust Indenture is intended to be exclusive of any other remedy. Each remedy shall be cumulative and shall be in addition to every other remedy given under the Trust Indenture or otherwise to the Trustee or to the holders or now or hereafter existing.

No delay in exercising or omission to exercise any remedy right or power accruing upon any default or Event of Default shall impair that remedy, right or power or shall be construed to be a waiver of any default or Event of Default or acquiescence therein. Every remedy, right and power may be exercised from time to time and as often as may be deemed expedient.

No waiver of any default or Event of Default shall extend to or affect any subsequent default or Event of Default or shall impair any remedy, right or power consequent thereon.

Enforcement of Remedies. A Holder shall not have any right to institute any suit, action or proceeding for the enforcement of the Trust Indenture, or for the exercise of any remedy under the Trust Indenture unless (a) there has been an Event of Default of which the Trustee has been notified or deemed to have been notified; (b) Holders of 25% in Aggregate Principal Amount of Bonds then outstanding have made written request to the Trustee and shall have afforded the Trustee reasonable opportunity to proceed to exercise the remedies, rights and powers granted in the Trust Indenture or to institute the suit, action or proceeding in its own name, and shall have offered indemnity to the Trustee as provided in the Trust Indenture; (c) for 60 days thereafter, the Trustee shall have failed to exercise the remedies, rights and powers granted it in the Trust Indenture or to institute the suit, action or proceeding in its own name. Nothing in the Trust Indenture shall affect or impair the right of the right of a Holder to enforce the payment of the Debt Service Charges on any Bond owned by that Holder at and after the maturity of the Bond.

Except as hereinafter provided and subject to the provisions of the Trust Indenture, the Trustee shall waive any Event of Default and its consequences and shall rescind and annul any declaration of maturity of principal of the Bonds upon the written request of the Holders of (a) at least a majority in Aggregate Principal Amount of all Bonds then outstanding in respect of which an Event of Default in the payment of Debt Service Charges exists, or (b) at least 25% in aggregate principal amount of all Bonds then outstanding, in the case of any other Event of Default.

Such written request shall take priority over other actions requested or authorized by the Holders. There shall not be so waived, however, any Event of Default constituting failure by the City to pay Debt Service Charges on Bonds nor shall any declaration of acceleration in connection therewith be rescinded or annulled, unless at the time of that waiver or rescission and annulment all amounts payable under the Trust Indenture (except the principal and interest on Bonds that have not reached their stated maturity and are payable solely by reason of acceleration) have been paid or provision has been made therefor. If such a waiver or rescission and annulment shall occur, or any suit, action, or proceedings taken by the Trustee on account of any Event of Default shall have been discontinued, abandoned or determined adversely to it, then the City, the Trustee and the Holders shall be restored to their former positions and rights under the Trust Indenture, respectively. No waiver or rescission shall extend to any subsequent or other Event of Default or impair any right consequent thereon.

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All rights, powers and remedies provided in the Trust Indenture may be exercised only to the extent that the exercise thereof does not violate any applicable law, and are intended to be limited to the extent necessary so that they will not render the Trust Indenture invalid, unenforceable or not entitled to be recorded, registered or filed under any applicable law.

Amendments and Supplemental Indentures

The City and the Trustee, without the consent of the Holders, may enter into indentures supplemental to the Indenture not inconsistent with the Trust Indenture for any one or more of the following purposes, among others: correcting ambiguities, inconsistencies or defects or omissions in the Trust Indenture; granting additional rights to the Trustee for the benefit of the Holders; assigning additional revenues under the Trust Indenture; adding to the covenants of the City or surrendering any of the rights of the City in the Trust Indenture; evidencing any succession to the City and the assumption by the successors of the covenants and agreements of the City in the Bonds and the Trust Indenture; making such necessary or advisable amendments in connection with the issuance of Bonds as do not adversely affect the interests of the Holders of outstanding Bonds; or to permit any other amendment that, in the judgment of the Trustee, is not materially prejudicial to the rights of the Holders of Outstanding Bonds.

With the consent of the holders of not less than a majority in aggregate principal amount of the Bonds then outstanding, the City and the Trustee may enter into supplemental trust indentures modifying, amending, adding to or rescinding any of the terms or provisions of the Trust Indenture or any Supplemental Indenture or restricting in any manner the rights of the Holders. However, without the consent of the Holder of each Bond affected thereby, no such Supplemental Indenture may (a) extend the maturity of the principal of, or the interest on any Bond issued under the Trust Indenture, (b) reduce the principal amount of any Bond, (c) reduce the rate of interest or premium thereon, (d) create a right in the City to call any Bond for redemption prior to its maturity, or advance the time or reduce the redemption price at which any existing right of the City to call Bonds may be exercised or (e) reduce the amount or extend the time of any payment required by Mandatory Sinking Fund Requirements. No supplemental trust indenture may permit a privilege or priority of any Bonds over any other Bonds, or reduce the Aggregate Principal Amount of the Bonds required for consent to a Supplemental Indenture, without the consent of the holders of all Bonds then outstanding.

Defeasance

If the City pays or causes to be paid the principal of and interest and any redemption premium on all Outstanding Bonds at the times and in the manner stipulated in the Trust Indenture, and if the City has paid all fees and charges of the Trustee and any paying agents, the Trustee shall release the Trust Indenture and discharge the lien thereof.

All Outstanding Bonds will be deemed to have been paid within the meaning of the Trust Indenture if the Trustee holds in trust for such payment, either moneys in an amount which will be sufficient, or Direct Obligations that are certified by an independent firm of national reputation to be of such maturities and interest payment dates and to bear such interest as will be sufficient, together with any moneys so held, for the payment of the principal of and interest and any premium on the Bonds at their maturity or redemption date or interest payment date without further investment or reinvestment of the principal or interest earnings therefrom, provided that if any Bonds are to be redeemed prior to their maturity date, notice of such redemptions shall have been given or irrevocable provision satisfactory to the Trustee shall have been duly made for the giving of such notice.

Limitations on Enforceability of Remedies

The declaration of an Event of Default under the Trust Indenture and the exercise of remedies upon any such declaration shall be subject to any applicable limitations of bankruptcy laws affecting or precluding such declaration or exercise during the pendency of or immediately following any insolvency, bankruptcy, liquidation or reorganization proceedings.

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APPENDIX B

SUMMARY OF CERTAIN PROVISIONS OF THE GENERAL BOND ORDINANCE AND THE SINKING FUND ORDINANCE

The Series 2017A Bonds are special obligations of the City and do not constitute General Obligation Bonds. The information set forth in this Appendix B is for reference purposes only.

Under the provisions of the General Bond Ordinance the City has pledged up to the total municipal income taxes of the City to the extent needed to pay debt service on its obligations payable from the Unvoted Tax Supported Obligations Account of the Sinking Fund (as defined below and being, generally, the unvoted general obligation bonds of the City that are not paid from revenues of a self-supporting enterprise of the City). The City has also made certain covenants in the General Bond Ordinance and provided in the General Bond Ordinance and the Sinking Fund Ordinance for the deposit into escrow of the ad valorem property taxes and the municipal income taxes pledged to secure its unvoted general obligation bonds. The General Bond Ordinance provides that so long as any bonds issued thereunder are outstanding, the City will maintain the moneys and the investments in all the accounts of the Sinking Fund irrevocably in trust with the Escrow Agent for the benefit of holders of bonds and notes of the City payable from various Accounts in the Sinking Fund.

Certain Definitions

In addition to the words and terms elsewhere defined in this Official Statement, the following terms, as used herein, shall have the following meanings:

“Accounts” means the accounts created in the Sinking Fund pursuant to the Sinking Fund Ordinance, as amended or supplemented from time to time.

“Agency” means the Central Collection Agency within the City’s Division of Taxation or other entity or officer having charge of collection of the City’s income taxes at the time.

“Debt service charges” or “debt charges” means the principal, including any mandatory sinking fund requirements, interest, and redemption premium, if any, required to be paid by the City on the obligations referred to.

“Enterprise” means a water system, electric power or distribution system, airports or ports, any motor vehicle parking system, solid waste collection, disposal or recovery system or other facility or group or system of facilities, determined to be an enterprise for purposes of the Sinking Fund Ordinance pursuant to an ordinance authorizing the issuance of Self-Supporting Obligations for the purpose of such system or facility.

“General Bond Ordinance” means Ordinance No. 1749-80, passed by City Council on October 8, 1980, as amended by Ordinance No. 1112-83, passed by City Council on May 6, 1983, and as further amended by Ordinance No. 944-96, passed on June 10, 1996, providing for the general terms and provisions for the issuance of unvoted general obligation bonds of the City that are determined by the City to be issued thereunder.

“Self-Supporting Obligations” means general obligation bonds of the City, and notes issued in anticipation of such bonds, issued for permanent improvements which constitute or are part of an Enterprise of the City, to the extent that the City’s Self-Supporting Revenues from such Enterprise are sufficient and available to meet the annual debt charges on such bonds issued or to be issued for the purposes of such Enterprise.

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“Self-Supporting Revenues” means the annual income to the City, including charges, prices, fees and rentals, from the operation or ownership of an Enterprise, after deducting therefrom the City’s annual cost of operation and maintenance (other than depreciation) of such Enterprise and any payments or deposit, required to be made by the City under any ordinance, trust indenture, trust agreement or other agreement which pertains to revenue or mortgage revenue bonds or notes issued for the purposes of such Enterprise or which otherwise creates a prior pledge or lien on such income for payments of any obligations other than debt charges on general obligation bonds or notes of the City.

“Sinking Fund” means the bond retirement fund of the City required by the Revised Code and further detailed in the Sinking Fund Ordinance of the City.

“Sinking Fund Commission” means the commission consisting of the Mayor (who is the President), the Director of Finance (who is the Secretary) and the President of Council, established pursuant to Section 110 of the Charter to manage and control the Sinking Fund in the manner provided by ordinance or by general law to the extent not provided by ordinance.

“Sinking Fund Ordinance” means Chapter 179 of the Codified Ordinances of the City.

“Unvoted Bond and Note Redemption Account” means an account in the Sinking Fund to be held and applied solely to the payment of debt charges and accrued interest on unvoted general obligation bonds, and notes issued in anticipation of such bonds, which are to be retired from the proceeds of the issuance of renewal notes, bonds or refunding bonds, or from special assessments or other money transferred for such purpose.

“Unvoted Self-Supporting Obligations Account” means an account in the Sinking Fund to be held for and applied solely to the payment of debt charges on Unvoted Self-Supporting Obligations.

“Unvoted Tax Supported Obligations” means general obligation bonds of the City, not authorized by vote of the electors, and notes issued in anticipation of such bonds, other than Self-Supporting Obligations, payable from ad valorem property taxes levied within the limitations provided by law, irrespective of whether such bonds or notes are secured by other receipts of the City in addition to such ad valorem property taxes, and including any such general obligation bonds, and notes issued in anticipation of such bonds, which are not or cease to be Self-Supporting Obligations.

“Unvoted Tax Supported Obligations Account” means an account in the Sinking Fund to be held for and applied solely to the payment of debt charges on Unvoted Tax Supported Obligations (other than the payment of principal on bond anticipation notes except for the amount of such notes required to be retired pursuant to Section 133.22 of the Revised Code if such notes are outstanding for more than five years).

“Voted Obligations” means general obligation bonds of the City authorized by vote of the electors and notes issued in anticipation of such bonds.

“Voted Obligations Account” means an account in the Sinking Fund to be held for and applied solely to the payment of debt charges on Voted Obligations.

Summary of the Codified Ordinances Relating to the Sinking Fund

General

Pursuant to the General Bond Ordinance, Section 110 of the Charter and the Sinking Fund Ordinance, the City has established a Sinking Fund, constituting its bond retirement fund, and has deposited

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the moneys and investments in all the Accounts in the Sinking Fund in trust with the Escrow Agent for the benefit of holders of bonds and notes of the City payable from the Accounts in the Sinking Fund.

As long as any bonds issued pursuant to the General Bond Ordinance are outstanding, the City covenants to maintain such moneys and investments with the Escrow Agent, to maintain the accounts and sub-accounts as provided in the Sinking Fund Ordinance, and to provide for deposits into and maintenance of required amounts in the Sinking Fund as described in the Sinking Fund Ordinance, unless the required consents of bondholders are received agreeing to modifications of such covenants.

Sinking Fund Commission

Pursuant to the Charter, the Sinking Fund Commission manages and controls the Sinking Fund. The Secretary of the Sinking Fund Commission may, on behalf of the Commission, take all actions which the Sinking Fund Commission is required or authorized to take under the Sinking Fund Ordinance (other than designation of an Escrow Agent) with respect to the Sinking Fund, including, without limitation, causing deposits to be made to various Accounts, establishing sub-accounts, authorizing permitted transfers and giving instructions as to investment of moneys, all as more fully described in the Sinking Fund Ordinance.

Establishment of Accounts – Deposits and Disbursements

The Sinking Fund Ordinance establishes four separate Accounts within the Sinking Fund: the Voted Obligations Account, the Unvoted Tax Supported Obligations Account, the Unvoted Self-Supporting Obligations Account and the Unvoted Bond and Note Redemption Account. The Sinking Fund Commission may establish sub-accounts within the Accounts, provided each sub-account shall be for a purpose within the purpose of such Account.

In 1980, pursuant to the Sinking Fund Ordinance and in connection with the issuance of the first series of bonds to be issued under the General Bond Ordinance, the Sinking Fund Commission deposited in the Accounts of the Sinking Fund held by the Escrow Agent all moneys and investments then held in the City’s Sinking Fund and other funds of the City for the payment of debt charges and credited such moneys and investments to the appropriate Accounts in the Sinking Fund.

In addition to making the original deposits of such moneys and investments to the credit of the respective Accounts, the City is required to deposit in the following Accounts certain revenues as described below:

(a) Voted Obligations Account – That portion of each distribution or advance of ad valorem property taxes by the County Fiscal Officer to the City allocable to levies outside the ten- mill limitation for payment of debt charges on Voted Obligations, and such Self-Supporting Revenues and other moneys as are designated for payment on Voted Obligations, provided that Self-Supporting Revenues of an Enterprise shall be deposited to such Account only to the extent available after application to payment of all debt charges on unvoted general obligations issued for such Enterprise.

(b) Unvoted Tax Supported Obligations Account – That portion of each distribution or advance of ad valorem property taxes by the County Fiscal Officer to the City allocable to levies within the ten-mill limitation for payment of debt charges on Unvoted Tax Supported Obligations, and such other revenues (including without limitation, municipal income taxes, but excluding Self- Supporting Revenues) to be applied for payment of such debt charges.

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(c) Unvoted Self-Supporting Obligations Account – Self-Supporting Revenues to the extent necessary to pay debt charges on unvoted Self-Supporting Obligations (prior to the deposit of any such self-supporting revenues in the Voted Obligations Account).

(d) Unvoted Bond and Note Redemption Account – Any proceeds from the issuance of unvoted general obligation bonds or revenue or mortgage revenue bonds, or of notes issued in anticipation of such bonds to be used for the purpose of retiring, renewing or refunding such general obligation bonds or notes, any other moneys transferred for such purpose and any proceeds from advance payment of special assessments in anticipation of which bonds or notes were issued.

The Sinking Fund Commission is required to make those deposits of revenues in the amounts and at the times necessary to allow for the timely payment of debt charges from those Accounts, and the Escrow Agent is required to make timely disbursements to the appropriate paying agents for such purpose. The Sinking Fund Ordinance prohibits any transfer from any Account to any other Account or fund.

Investment of Sinking Fund Account Moneys

Moneys credited to the Accounts of the Sinking Fund shall, by written instruction of the Sinking Fund Commission, be invested by the Escrow Agent only in the following obligations:

(a) Direct obligations of the United States of America or obligations the timely payment of the principal of and interest on which is fully guaranteed by the United States of America;

(b) certificates of deposit, demand deposits or time deposits of any state bank or trust company or national banking association, including the Escrow Agent or any affiliate of the Escrow Agent, which is a member of the Federal Deposit Insurance Corporation (FDIC), (including any investment in pools of those certificates of deposit, demand deposits or time deposits owned by the bank, trust company or national banking association), provided that any such certificate of deposit, demand deposit or time deposit is

(i) continuously and fully insured by FDIC, or

(ii) issued by an entity that has (or guaranteed by an entity’s parent holding company that has) either unsecured, unguaranteed and uninsured commercial paper rated in the highest rating category, or unsecured, unguaranteed and uninsured long-term obligations rated in the third highest or higher rating category, by a rating service or agency that maintains a rating on obligations of the City payable from any of the Sinking Fund accounts, or

(iii) fully secured, to the extent not insured by FDIC, by obligations of the type described in paragraph (i) above (A) that have a market value at all times at least equal to the uninsured principal amount of the deposit, (B) that are held by the Escrow Agent (except in case of a certificate of deposit, demand deposit or time deposit of the Escrow Agent) or any Federal Reserve Bank or depository of the United States of America, as custodian for the institution issuing the deposit, together with the undertaking of such institution, in form satisfactory to the Escrow Agent, that the aggregate market value of the obligations securing such deposit at all times will be maintained in an amount meeting the requirements of this subparagraph (c), and (C) in which the Escrow Agent has a prior perfected first lien and which are not subject to any third-party claims;

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(c) repurchase agreements collateralized by securities described in paragraph (b)(i) above with any registered broker/dealer under the jurisdiction of the Securities Investors’ Protection Corporation or any state bank or trust company or national banking association, including the Escrow Agent, if such broker/dealer, bank or trust company has (or its parent holding company has, if it provides a guarantee of the obligation) unsecured, uninsured and unguaranteed commercial paper rated in the highest rating category, or unsecured, uninsured and unguaranteed long-term obligations rated in the third-highest or higher rating category, by a rating service or agency that maintains a rating on obligations of the City payable from any of the Sinking Fund accounts, provided that:

(i) a master repurchase agreement or specific written repurchase agreement governs the transaction,

(ii) the securities are held by the Escrow Agent or an independent third party acting solely as agent for the Escrow Agent free and clear of any lien, and such third party is (A) a Federal Reserve Bank, or (B) a bank that is a member of the FDIC and that has combined capital, surplus and undivided profits of not less than $50,000,000, and the Escrow Agent shall have received written confirmation from such third party that it holds such securities, free of any lien, as agent for the Escrow Agent,

(iii) a perfected first security interest in such securities under the Uniform Commercial Code or book-entry procedures prescribed by federal regulations is created for the benefit of the Escrow Agent (as demonstrated by an opinion of counsel upon which the Escrow Agent may rely as to perfection and priority),

(iv) the repurchase agreement has a term of 30 days or less, or the Escrow Agent will value the collateral securities no less frequently than once every seven days and will liquidate the collateral securities if any deficiency in the required collateral percentage is not restored within two business days of such valuation, and

(v) the fair market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 100%;

(d) investment contracts (which term shall not include repurchase agreements) fully collateralized by securities described in paragraph (b)(i) above, with an institution that has (or its parent holding company has, if it provides a guarantee of the obligation) either unguaranteed and uninsured commercial paper rated in the highest rating category, or unsecured, unguaranteed and uninsured long-term obligations rated in the third-highest or higher rating category, by a rating service or agency that maintains a rating on obligations of the City payable from any of the Sinking Fund accounts;

(e) obligations of any state of the United States of America or any political subdivision of any state, other than the City, for the payment of which the full faith and credit of the state or political subdivision is pledged, provided that such obligations are rated in the second-highest or higher rating category by a rating service or agency that maintains a rating on obligations of the City payable from any of the Sinking Fund accounts; and

(f) investments in the pooled investment program established in the custody of the Treasurer of the State pursuant to Section 135.45 of the Ohio Revised Code for investment of money by political subdivisions of the State.

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Such investments shall mature or be redeemable at the option of the holder at such times and in such amounts to allow the Escrow Agent to make all required payments of debt charges in a timely manner. All income from any investment shall be credited to the Sinking Fund account for which such investment was made.

Reports

The Escrow Agent is required promptly to notify the Sinking Fund Commission of all deposits to, disbursements and transfers from, and investments of moneys in any Account. Upon request of the Sinking Fund Commission, the Escrow Agent must furnish to the Commission a statement of current balances in the Accounts. Monthly statements are required to be provided to the Trustee under the General Bond Ordinance. The Sinking Fund Commission must provide to City Council at least once a year a full and detailed statement of the City’s outstanding obligations, together with information regarding annual receipts and disbursements, investments and income therefrom of the various Sinking Fund Accounts. In addition, the Sinking Fund Commission must submit in itemized form to City Council the amount needed in the following year for the required payments of debt charges from various Sinking Fund Accounts and for the operating expenses of the Sinking Fund Commission, and such amount is required to be included in the annual City budget submitted to the County Fiscal Officer and in the Mayor’s annual appropriation request.

Summary of Certain Provisions of the General Bond Ordinance and Sinking Fund Ordinance

Pledge of Property Taxes

The City covenants to include in each tax budget the full amount of ad valorem property taxes produced by the rate levied for the 1980 fiscal year within the minimum levy of the City for and to the extent of total debt charges to be paid in such budget year on unvoted general obligation debt of the City, subject to certain reductions to reflect certain other receipts available for the purpose, and to levy such taxes in that amount and appropriate and deposit the proceeds thereof to the Unvoted Tax Supported Obligations Account. The City has also agreed to and provided for the County Fiscal Officer’s direct deposit with the Escrow Agent of the amount of ad valorem property taxes within the ten-mill limitation to the credit of the Unvoted Tax Supported Obligations Account. Such ad valorem property taxes are pledged, and a prior lien is granted therein, to secure the payment of debt charges payable from that Account.

In addition, the City covenants in the General Bond Ordinance to include in its tax budget and to levy, appropriate and deposit such ad valorem property taxes outside the ten-mill limit to the Voted Obligations Account of the Sinking Fund as are necessary for the timely payment of all debt charges to be paid therefrom. Such levy may be reduced only by amounts which are reasonably estimated to be available and budgeted for payment of such debt charges. For more information with respect to the pledge of property taxes and property taxes generally, see “SECURITY AND SOURCES OF PAYMENT – Pledged Property Taxes” and “THE CITY – MAJOR GENERAL FUND REVENUE SOURCES – Ad Valorem Property Taxes.”

Pledge of Income Taxes

The City has covenanted that, so long as any of the bonds issued under the General Bond Ordinance are outstanding, the City will collect, appropriate and deposit its municipal income taxes, and has pledged and granted a first lien thereon, to the full extent required to meet debt charges payable from the Unvoted Tax Supported Obligations Account and to the full extent necessary to pay the interest on notes issued in anticipation of obligations payable from the Unvoted Tax Supported Obligations Account. The City has further covenanted not to repeal or amend any ordinance for the levy or collection of its income taxes to such extent that the City would not be able to meet such obligations.

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The amount of income tax required for the Unvoted Tax Supported Obligations Account is determined by a budget process and is, in effect, the amount needed after taking into account other receipts that will be deposited to that Account.

With each tax budget, the City must set forth the Schedule, on a monthly basis for a full budget year, showing the year-end balances and tax and other receipts to be credited to various Sinking Fund Accounts, exclusive of income tax receipts, and also set forth the times and amounts of required payments from such Accounts to meet the required debt service. For such purpose, the taxes and other receipts which may be regarded as available to the Unvoted Tax Supported Obligations Account must be limited to the ad valorem tax levy within the ten-mill limitation, special assessments levied for debt charges on unvoted general obligations, accrued interest and premium received upon the sale of unvoted general obligations and reasonably estimated interest income.

The Schedule must identify on a monthly basis any deficiency of those receipts (other than income tax) to be available to the Unvoted Tax Supported Obligations Account to meet the debt service charges payable from such Account, and must specify the required monthly deposits of income tax receipts to meet that deficiency, in equal amounts from the first month of the year to the month preceding the month for which the deficiency was calculated. If at any time the projected or actual amount of receipts in the Unvoted Tax Supported Obligations Account from sources other than income tax is less than the amount budgeted, or the projected amount required to be paid from such Account is greater than the amount estimated, a revised Schedule of increased income tax deposits must be prepared to meet such requirements. If the deposits from such other sources have exceeded the amounts scheduled therefrom for three consecutive months, a revised Schedule of income tax deposits may also be prepared. The Schedule and any revisions thereto must be certified by the Director of Finance and delivered to the Trustee, together with a report by an independent accounting firm showing financial data sufficient to demonstrate that the total amount to be deposited to the Unvoted Tax Supported Obligations Account from income tax receipts in any month is consistent with the requirements of the General Bond Ordinance and. that making such deposits can reasonably be expected to result in amounts sufficient to make timely payment of debt charges scheduled from such Account. The Schedule and revisions must also be certified to the Agency. All income taxes and other taxes, receipts and available revenues to be deposited to the credit of the Unvoted Tax Supported Obligations Account are deemed to be appropriated to such Account and shall not be available for or appropriated to any other purpose.

Commencing with the first day of each month during which a deposit of income tax receipts in the Unvoted Tax Supported Obligations Account must be made in accordance with the Schedule last certified by the Director of Finance, the Agency must withhold from the City’s income tax collection the full amount to be deposited from such receipts and pay such amount directly to the Escrow Agent in the most expeditious manner practicable. The Agency is prohibited from paying to any other City fund any amount from such income tax receipts until the scheduled payment has been made in full to the Escrow Agent.

In any event, if at any time the Escrow Agent or Trustee notifies the Director of Finance and the Agency that amounts held in and projected to be deposited to the Unvoted Tax Supported Obligations Account are insufficient to meet ensuing payments of debt charges, the City shall promptly transfer to that Account from the income tax receipts of the City held by the Agency and from the first such receipts following the certification, the amounts of such deficiency before making further distributions therefrom to other funds of the City.

Protective Covenants

Among the protective covenants made by the City in the General Bond Ordinance for the benefit of the Bondholders are the following:

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Balanced Budget. The General Bond Ordinance requires the City to comply with certain financial covenants pertaining to limitations on appropriations measures and maintaining a balanced budget.

(a) With respect to each appropriation measure, the City has agreed that appropriations from each fund shall not exceed the lesser of (i) the amounts set forth in the current official certificate of estimated resources for such fund or (ii) the sum of estimated unencumbered fund balances of such fund from the prior fiscal year and taxes, revenues, income and other receipts to such fund for the current fiscal year. Such taxes, revenues, income and other receipts are to be stated at levels no greater than such amounts estimated to be and actually realized in the prior fiscal year. Any increase or decrease in such amounts shall be certified in writing by the City’s Director of Finance to City Council together with the basis for such increase or decrease, within those permitted by the General Bond Ordinance. Appropriations must be sufficient to support levels of actual and estimated expenditures no less than those of the prior fiscal year unless the Director of Finance certifies to City Council the basis for such lower levels, within those permitted by the General Bond Ordinance. Appropriations must be sufficient to support levels of actual and estimated expenditures no less than those of the prior fiscal year unless the Director of Finance certifies to City Council the basis for such lower levels, within those permitted by the General Bond Ordinance.

(b) In the event of a fund balance deficit at the end of any fiscal year, the City shall provide for the elimination of such deficit in the succeeding fiscal year’s appropriation measure and shall actually eliminate such deficit by the end of such succeeding fiscal year. A fund balance deficit may be eliminated over a longer period of time if such is contemplated in a financial plan adopted pursuant to Chapter 118, Ohio Revised Code, the State’s Municipal Fiscal Emergency Act, to the extent that such deficit arises because tax revenues or other receipts attributable thereto declined by more than 10% from the prior fiscal year, provided that certain determinations are made as required by the General Bond Ordinance.

(c) Within 120 days after the beginning of each fiscal year, the Director of Finance is required to certify to the Trustee that the requirements described in the preceding two paragraphs have been met for the current fiscal year. The certification of the Director of Finance is to be accompanied by an independent accounting firm’s statement showing with specificity financial data and confirming the City’s compliance with the preceding two paragraphs if, at the end of the preceding fiscal year, as reflected in the City’s audited financial statements, prepared in conformity with GAAP for government entities, the aggregate of any deficits in the City’s General Fund, Special Revenue Funds, Sinking Fund, Capital Projects Funds and Internal Service Funds exceeds 2% of General Fund receipts during such preceding year.

The City has complied with the procedures previously described in paragraphs (i) and (ii). The City has also complied with the procedures described in paragraph (iii), but in order to do so, the City requested in years since 1983, and the Trustee granted, an extension so that the City could utilize its audited financial statements in preparing certain information relating to the subject of the certification.

Annual Audit and Quarterly Projections and Statements. The City is required to have its annual financial statements audited by a nationally recognized firm of certified public accountants and to file such audited financial statements with the Trustee within 120 days of the end of each fiscal year. In addition, the City must prepare, within 30 days after City Council passes the annual appropriations ordinance, quarterly projections for the remainder of the fiscal year of receipts, expenses and cash balances for all governmental and proprietary funds reported in the annual financial statements, and statements as of the end of each quarter comparing those projections with actual results. Those projections and statements, together with other documents and financial information pertaining to the City (including copies of tax

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budgets, appropriation measures, certificates of estimated resources and amendments thereto, ordinances or resolutions levying ad valorem property taxes or authorizing the issuance of bonds, detailed financial plans approved by City Council, and annual financial reports submitted to the Auditor of State, among others) shall be filed with the Trustee and made available for inspection and review by the Bondholders at the offices of the Trustee.

Prohibition on Transfers. The City is prohibited from applying moneys in its various bond construction funds for any purpose other than that for which the bonds, or notes in anticipation thereof, were issued. Further, the City may not transfer moneys from such funds to any other fund except (a) to pay reasonable costs for the use of the City’s personnel, supplies or equipment with respect to the purpose for which such fund was created and (b) to transfer any surplus in the bond construction fund to the Sinking Fund. Transfers from any other fund shall only be made upon certification by the Director of Finance to City Council that such transfer (i) will not be inconsistent with the Revised Code or Charter, (ii) will not create a deficit in the fund from which that transfer is made and (iii) will not result in receipts to the fund from which the transfer is made being inadequate to meet appropriations therefrom.

Events of Default and Remedies

Events of Default. The following are events of default under the General Bond Ordinance:

(a) Failure to pay any debt charges on any bond when and as the same shall have become due and payable or failure to make any deposit in any Sinking Fund Account required pursuant to the Sinking Fund Ordinance and the General Bond Ordinance by the time required;

(b) Failure by the City to perform or observe any other covenant or agreement contained in the General Bond Ordinance, the applicable Series Bond Ordinance or in the bonds issued under the General Bond Ordinance, which failure continues for a period of 90 days after written notice of such failure. Such notice may be given by the Trustee in its discretion and shall be given at the written request of holders of at least 25% in aggregate principal amount of outstanding bonds issued pursuant to the General Bond Ordinance; provided that if such default cannot reasonably be expected to be cured within such 90-day period, such failure shall not constitute an event of default so long as, in the judgment of the Trustee, the City institutes corrective action and diligently pursues such action to completion; and

If an event of default occurs as described in clauses (a) or (c) above, or circumstances occur which would give rise to an event of default described in clause (b) above if notice were given of such circumstances and such circumstances were not remedied as described in clause (b), the Trustee shall, within five days after knowledge of such event of default, give written notice thereof, by registered or certified mail, to all registered Bondholders and the Trustee shall also give notice to the City with respect to events of default described in clauses (a) and (c) above.

The Trustee may in its discretion waive an event of default as described in clause (b) above and its consequences (other than any default, notice of which was requested by the holders of not less than 25% in aggregate principal amount of the outstanding bonds issued pursuant to the General Bond Ordinance) and shall waive any such event of default upon the written request of the holders of at least 51% in aggregate principal amount of such outstanding bonds. In case of any waiver, or in case any proceeding taken by the Trustee on account of any default is discontinued or abandoned or determined adversely, the City, the Trustee and such Bondholders shall be restored to their former positions and rights under the General Bond Ordinance. No waiver or rescission shall extend to any subsequent or other default or impair any right consequent thereto.

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Remedies. Upon the occurrence of an event of default known to the Trustee, the Trustee may pursue any available remedy to enforce the payment of defaulted principal and interest payments on the bonds issued pursuant to the General Bond Ordinance or the compliance with any other obligation set forth in the General Bond Ordinance or such bonds. The City has covenanted in the General Bond Ordinance that the City will not, in any ordinance, trust agreement or other contract or agreement forming part of or pertaining to any general obligation debt of the City, make provision for, or authorize or permit the holders or owners of any such general obligation debt or anyone acting on their behalf to effect, the acceleration of the principal amount of such debt, such that all or any part thereof shall become due and payable in advance of the time otherwise scheduled for such payment. Accordingly, the remedy of acceleration is not available with respect to the Series 2017A Bonds.

Upon the occurrence of an event of default, the Trustee may, and if requested so to do by the holders of at least 25% in aggregate principal amount of outstanding bonds issued pursuant to the General Bond Ordinance, after having been indemnified as provided in the General Bond Ordinance, the Trustee shall, exercise such of the rights and powers conferred by the General Bond Ordinance as the Trustee, being advised by counsel, shall deem most expedient in the interests of such Bondholders.

The holders of 51% in aggregate principal amount of outstanding bonds issued pursuant to the General Bond Ordinance have the right, upon offering satisfactory indemnity to the Trustee, to direct the method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of the General Bond Ordinance, such bonds or any proceedings thereunder, unless such direction is unlawful or not in accordance with the provisions of the General Bond Ordinance. No such Bondholder shall have any right to pursue remedies under the General Bond Ordinance unless: (i) an event of default shall have occurred and be continuing of which the Trustee has or is deemed to have notice; (ii) the holders of at least 25% in aggregate principal amount of such bonds then outstanding shall have requested the Trustee, in writing, to pursue a remedy; (iii) the Trustee shall have been offered satisfactory indemnity; and (iv) the Trustee shall have failed to comply with such request within a reasonable time. Nothing in the General Bond Ordinance or such bonds shall affect the right of the holder thereof to enforce payment thereof at or after the date of maturity without the consent of the Trustee or any other holder of such bonds. The provisions of the General Bond Ordinance relating to a one percent increase in the interest rate on such bonds during an Event of Default, however, only applies to bonds issued prior to 1985.

Modifications

The General Bond Ordinance contains provisions whereby the City and the Trustee may, without the consent of, or notice to, holders of bonds issued pursuant to the General Bond Ordinance, amend the General Bond Ordinance to cure ambiguities, inconsistencies, defects or omissions therein, to grant additional rights to the Escrow Agent or the Trustee, to subject additional taxes or revenues to the lien of the General Bond Ordinance, to add covenants of the City for the protection of such Bondholders and to evidence the assumption by any successor to the City of its covenants contained in the General Bond Ordinance.

Modifications of the General Bond Ordinance for other purposes may be made only with the consent of the holders of not less than 66 2/3% in aggregate principal amount of outstanding bonds issued pursuant to the General Bond Ordinance. No modifications shall, without the consent of each such Bondholder so affected, extend the maturity of the principal of, or interest on, any such bond or reduce the principal amount or rate of interest thereon; and no such modification shall, without the consent of the holders of all such outstanding bonds decrease the taxes or revenues pledged for debt charges on such bonds or reduce the aggregate principal amount of such bonds required for consent to such amendments.

The Trustee shall be entitled to rely upon the opinion of any counsel satisfactory to it that such proposed amending ordinance complies with the provisions of the General Bond Ordinance.

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The General Bond Ordinance sets forth certain provisions requiring that notice be given to holders of bonds issued pursuant to the General Bond Ordinance in the event of a proposed amendment to such ordinance. The provisions for modifications described above apply equally to amendments to the Sinking Fund Ordinance.

Defeasance

When all of the bonds issued pursuant to the General Bond Ordinance have been paid and discharged, and provision has been made for paying all sums payable under the General Bond Ordinance, the General Bond Ordinance shall cease, and the covenants of the City shall be discharged. Thereupon the Trustee shall, at the request of the City, execute and deliver to the City such instruments in writing as shall discharge the lien thereof and the Trustee shall assign and deliver to the City any property at the time subject to the lien of the General Bond Ordinance which may then be in its possession.

Bonds issued pursuant to the General Bond Ordinance shall be deemed to have been paid and discharged within the meaning of the General Bond Ordinance:

(a) if the Escrow Agent or any paying agent for such bonds shall hold in special accounts or sub-accounts, in trust for and irrevocably committed solely thereto, sufficient money, or

(b) if the Escrow Agent shall hold in special accounts or sub-accounts in trust for and irrevocably committed solely thereto, direct obligations of the United States certified by an independent public accounting firm of national reputation to be of such maturities and interest payment dates and to bear such interest as will, without further investment or reinvestment of either the principal amount thereof or the interest earnings therefrom (likewise to be held in trust and committed, except as hereinafter provided), be sufficient together with moneys referred to in subsection (a) above, for the payment, at their maturities or redemption dates, of all debt charges thereon to the date of maturity or redemption, as the case may be, or if default in such payment shall have occurred on such date, then to the date of the tender of such payment; provided, that if any such bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been duly given or irrevocable provision satisfactory to the Trustee shall have been duly made for the giving of such notice. Any such moneys shall be invested by the Escrow Agent, upon written direction of the Director of Finance, only in direct obligations of the United States of America, maturing, or redeemable at the option of the holder, at times and in amounts sufficient to meet payments of debt charges on such bonds.

The Trustee

The Trustee is entitled to act upon any written advice or opinion of counsel and shall not be liable for any such action taken in good faith and believed by it to be within the discretion or rights conferred upon it by the General Bond Ordinance. In addition, the Trustee is entitled to rely on certificates and other instruments as specified in the General Bond Ordinance. The City also has covenanted to indemnify the Trustee for, and hold it harmless against, any loss, liability or expense incurred by the Trustee without negligence or bad faith in connection with the performance of its duties. The General Bond Ordinance also contains provisions relating to the resignation and removal of the Trustee and the appointment of a successor trustee.

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APPENDIX C

BOOK-ENTRY SYSTEM; DTC

The information set forth in the following numbered paragraphs is based on information provided by The Depository Trust Company in its “Sample Offering Document Language Describing DTC and Book- Entry-Only Issuance” (June 2013). As such, the City believes it to be reliable, but the City takes no responsibility for the accuracy or completeness of that information. It has been adapted to the Bond issue by substituting “Series 2017A Bonds” for “Securities,” “City” for “Issuer” and “Trustee” for “registrar” and by the addition of the italicized language set forth in the text. See also the additional information following those numbered paragraphs.

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Series 2017A Bonds. The Series 2017A Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each (maturity) of the Series 2017A Bonds, each in the aggregate principal amount of such (maturity), and will be deposited with DTC.

2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non- U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. (This internet site is included for reference only, and the information in this internet site is not incorporated by reference in this Official Statement.)

3. Purchases of the Series 2017A Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2017A Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2017A Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners

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will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Series 2017A Bonds is discontinued.

4. To facilitate subsequent transfers, all Securities 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 Securities 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 Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities 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.

5. 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 Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities 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 notices be provided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City 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 Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend (debt charges) payments on the Securities 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 City or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City 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.

9. (Not Applicable to the Series 2017A Bonds).

10. DTC may discontinue providing its services as depository with respect to the Series 2017A Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the

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event that a successor depository is not obtained, Bond certificates are required to be printed (or otherwise produced) and delivered.

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

12. The information (above) in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof.

Direct Participants and Indirect Participants may impose service charges on Beneficial Owners in certain cases. Purchasers of book-entry interests should discuss that possibility with their brokers.

The City and the Trustee have no role in the purchases, transfers or sales of book-entry interests. The rights of Beneficial Owners to transfer or pledge their interests, and the manner of transferring or pledging those interests, may be subject to applicable state law. Beneficial Owners may want to discuss with their legal advisers the manner of transferring or pledging their book-entry interests.

The City and the Trustee have no responsibility or liability for any aspects of the records or notices relating to, or payments made on account of, Beneficial Ownership, or for maintaining, supervising or reviewing any records relating to that ownership.

The City and the Trustee cannot and do not give any assurances that DTC, Direct Participants, Indirect Participants or others will distribute to the Beneficial Owners payments of debt charges on the Series 2017A Bonds made to DTC as the registered owner, or redemption, if any, or other notices, or that they will do so on a timely basis, or that DTC, Direct Participants or Indirect Participants will serve or act in a manner described in this Official Statement.

For all purposes under the Bond proceedings (except the Continuing Disclosure Certificate under which others as well as DTC may be considered an owner or holder of the Series 2017A Bonds, see “CONTINUING DISCLOSURE CERTIFICATE”), DTC will be and will be considered by the City and the Trustee to be the owner or holder of the Series 2017A Bonds.

Beneficial Owners will not receive or have the right to receive physical delivery of the Series 2017A Bonds, and, except to the extent they may have rights as Beneficial Owners or holders under the Continuing Disclosure Certificate, will not be or be considered by the City and the Trustee to be, and will not have any rights as, owners or holders of the Series 2017A Bonds under the Series 2017A Bond proceedings.

Reference herein to “DTC” includes when applicable any successor securities depository and the nominee of the depository.

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APPENDIX D

TEXT OF OPINION OF BOND COUNSEL

June __, 2017

To: City of Cleveland, Ohio

U.S. Bancorp Investments, Inc., as Representative of the Underwriters

We have served as bond counsel to our client the City of Cleveland, Ohio (the “City”) in connection with the issuance by the City of the following series of Subordinate Lien Income Tax Bonds: $______Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A-1 (Public Facilities Improvements) (the “Series 2017A-1 Bonds”) issued pursuant to Ordinance No. 412- 17, passed April 24, 2017, for the purpose of providing facilities for the discharge of governmental functions or services otherwise benefiting public safety, health and welfare, and pursuant to Ordinance No. 1592-14, passed December 8, 2014 (the “Refunding Ordinance”), for the purpose of advance refunding a portion of the City’s Subordinate Lien Income Tax Bonds, Series 2008A and a portion of the City’s Subordinate Lien Income Tax Bonds, Series 2012; $______Subordinate Lien Income Improvement and Refunding Tax Bonds, Series 2017A-2 (Bridges and Roadways Improvements) (the “Series 2017A-2 Bonds”) issued pursuant to Ordinance No. 413-17, passed April 24, 2017, for the purpose of improving the municipal street system and related facilities, and pursuant to the Refunding Ordinance for the purpose of advance refunding a portion of the City’s Subordinate Lien Income Tax Bonds, Series 2008B; $______Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A-3 (Parks and Recreation Facilities Improvements) (the “Series 2017A-3 Bonds”) issued pursuant to Ordinance No. 411-17, passed April 24, 2017, for the purpose of improving municipal parks and recreation facilities, and pursuant to the Refunding Ordinance for the purpose of advance refunding a portion of the City’s Subordinate Lien Income Tax Bonds, Series 2008C; $______Subordinate Lien Income Tax Refunding Bonds, Series 2017A-4 (Revitalization Improvements) (the “Series 2017A-4 Bonds”) issued pursuant to the Refunding Ordinance for the purpose of advance refunding a portion of the City’s Subordinate Lien Income Tax Bonds, Series 2008D; and $______Subordinate Lien Income Tax Refunding Bonds, Series 2017A-5 (Cemeteries Improvements) (the “Series 2017A-5 Bonds” and, together with the Series 2017A-1 Bonds, the Series 2017A-2 Bonds, the Series 2017A-3 Bonds and the Series 2017A-4 Bonds, the “Series 2017A Bonds”) issued pursuant to the Refunding Ordinance for the purpose of advance refunding a portion of the City’s Subordinate Lien Income Tax Bonds, Series 2008E, each of which is dated the date of this letter. Ordinance Nos. 411-17, 412-17 and 413-17, the Refunding Ordinance and the Certificates of Award delivered pursuant to them collectively constitute the “Series 2017A Bond Legislation.”

The Series 2017A Bonds are issued under authority of the Constitution and laws of the State of Ohio, including Revised Code Chapter 133, the Charter of the City, the Series 2017A Bond Legislation, and the Trust Indenture dated as of June 1, 2008, as amended by Section 6.1 of the Second Supplemental Trust Indenture dated as of June 1, 2010 (as amended, the “Trust Indenture”), and as supplemented by the Ninth Supplemental Trust Indenture dated as of June 1, 2017 (the “Ninth Supplement” and together with the Trust Indenture, the “Indenture”), each between the City and U.S.

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Bank National Association, as trustee (the “Trustee”). The Series 2017A Bonds are equally and ratably payable solely from, and secured by a pledge of and lien on, the “Revenues” as defined in the Indenture and being generally the income tax receipts of the City remaining after there has been paid to the escrow agent under the General Bond Ordinance (defined below) the amount required by Section 9(b) of the General Bond Ordinance to be withheld and paid to the escrow agent for the City’s General Obligation Bonds (defined below). Ordinance No. 1749-80, passed by Council of the City on October 8, 1980, as amended by Ordinance No. 1112-83, passed by Council of the City on May 6, 1983, and as further amended by Ordinance No. 944-96, passed by Council of the City on June 10, 1996 collectively constitute the “General Bond Ordinance,” and any outstanding unvoted general obligation bonds or notes of the City issued and secured under the General Bond Ordinance constitute the “General Obligation Bonds.” Capitalized terms not otherwise defined in this letter are used as defined in the Indenture.

In our capacity as bond counsel, we have examined the transcript of proceedings relating to the issuance of the Series 2017A Bonds, a copy of the signed and authenticated Series 2017A Bond of the first maturity for each series of the Series 2017A Bonds and such other documents, matters and law as we deem necessary to render the opinions set forth in this letter.

Based on that examination and subject to the limitations stated below, we are of the opinion that under existing law:

1. The Series 2017A Bonds and the Indenture are valid and binding obligations of the City enforceable in accordance with their respective terms.

2. The Series 2017A Bonds constitute special obligations of the City, and the principal of and interest on (collectively, “debt service”) the Series 2017A Bonds, together with debt service on other series of Bonds that have been and may be issued and outstanding, from time to time, under the Trust Indenture (collectively, the “Bonds”), are payable from and secured solely by the Revenues and the Pledged Funds, all as defined and described in the Indenture. Payments of debt service on the Series 2017A Bonds are not secured by an obligation or pledge of any money raised by taxation other than the Revenues pledged pursuant to the Indenture, and the Series 2017A Bonds do not represent or constitute a general obligation or a pledge of the faith and credit of the City, the State of Ohio or any of its political subdivisions.

3. Interest on the Series 2017A Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Series 2017A Bonds is included in the calculation of a corporation’s adjusted current earnings for purposes of, and thus may be subject to, the corporate alternative minimum tax. Interest on, and any profit made on the sale, exchange or other disposition of, the Series 2017A Bonds are exempt from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax. We express no opinion as to any other tax consequences regarding the Series 2017A Bonds.

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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 rendering all 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 and (ii) the due and legal authorization, execution and delivery of those documents by, and the valid, binding and enforceable nature of those documents upon, any parties other than the City.

In rendering those opinions with respect to the treatment of the interest on the Series 2017A Bonds under the federal tax laws, we further assume and rely upon compliance with the covenants in the proceedings and documents we have examined, including those of the City. Failure to comply with certain of those covenants subsequent to issuance of the Series 2017A Bonds may cause interest on the Series 2017A Bonds to be included in gross income for federal income tax purposes retroactively to their date of issuance.

The rights of the owners of the Series 2017A Bonds and the enforceability of the Series 2017A Bonds are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer, and other laws relating to or affecting the rights and remedies of creditors generally; to the application of equitable principles, whether considered in a proceeding at law or in equity; to the exercise of judicial discretion; and to limitations on legal remedies against public entities.

No opinions other than those expressly stated herein are implied or shall be inferred as a result of anything contained in or omitted from this letter. The opinions expressed in this letter are stated only as of the time of its delivery and we disclaim any obligation to revise or supplement this letter thereafter. Our engagement as bond counsel in connection with the original issuance and delivery of the Series 2017A Bonds is concluded upon delivery of this letter.

Respectfully submitted,

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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE

This CONTINUING DISCLOSURE CERTIFICATE, dated as of June __, 2017 (the “Certificate”), is made, signed and delivered by the CITY OF CLEVELAND, Ohio, a municipal corporation and political subdivision duly organized and existing under its Charter and the Constitution and laws of the State of Ohio (the “City”), for the benefit of the Holders and Beneficial Owners (as defined herein) from time to time of the City’s $67,395,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A, consisting of (a) $15,940,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A-1 (Public Facilities Improvements) (the “Series 2017A-1 Bonds”), (b) $27,385,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A-2 (Bridges and Roadways Improvements) (the Series 2017A-2 Bonds”), (c) $21,080,000* Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A-3 (Parks and Recreation Facilities Improvements) (the “Series 2017A- 3 Bonds”), (d) $2,540,000* Subordinate Lien Income Tax Refunding Bonds, Series 2017A-4 (Revitalization Improvements) (the “Series 2017A-4 Bonds”), and (e) $450,000* Subordinate Lien Income Tax Refunding Bonds, Series 2017A-5 (Cemeteries Improvements) (the “Series 2017A-5 Bonds”, and together with the Series 2017A-1 Bonds, the Series 2017A-2 Bonds, the Series 2017A-3 Bonds, and the Series 2017A-4 Bonds, the “Series 2017A Bonds”), each of which Series is dated as of June __, 2017, and authorized as follows: (i) Ordinance Nos. 412-17 and 1592-14, authorizing the Series 2017A-1 Bonds (the “Series 2017A-1 Bond Legislation”), (ii) Ordinance No. 413-17 and 1592-14, authorizing the Series 2017A-2 Bonds (the “Series 2017A-2 Bond Legislation”), (iii) Ordinance No. 411-17 and 1592-14 and 1592-14, authorizing the Series 2017A-3 Bonds (the “Series 2017A-3 Bond Legislation”), (iv) Ordinance No. 1592-14, authorizing the Series 2017A-4 Bonds (the “Series 2017A-4 Bond Legislation), (v) Ordinance No. 1592-14, authorizing the Series 2017A-5 Bonds (the “Series 2017A-5 Bond Legislation), and together with the Series 2017A-1 Bond Legislation, the Series 2017A-2 Bond Legislation, the Series 2017A-3 Bond Legislation, and the Series 2017A-4 Bond Legislation, the “Bond Legislation”).

RECITAL

The City, by passage of the Bond Legislation, has determined to issue the Series 2017A Bonds to provide funds for City purposes, and US Bancorp, as representative (the “Underwriter”), has agreed to provide those funds to the City by purchasing the Series 2017A Bonds. As a condition to the purchase of the Series 2017A Bonds from the City and the sale of the Series 2017A Bonds to Holders and Beneficial Owners, the Underwriter is required to reasonably determine that the City has undertaken, in a written agreement for the benefit of Holders and Beneficial Owners of the Series 2017A Bonds, to provide certain information in accordance with the Rule (as defined herein).

NOW, THEREFORE, in accordance with the Bond Legislation, the City covenants and agrees as set forth in this Continuing Disclosure Certificate.

Section 1. Purpose of Continuing Disclosure Certificate. This Certificate is being entered into, signed and delivered for the benefit of the Holders and Beneficial Owners of the Series 2017A Bonds and in order to assist the Participating Underwriter of the Series 2017A Bonds in complying with Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission (“SEC”) pursuant to the Securities Exchange Act of 1934, as may be amended from time to time (the “Rule”).

Section 2. Definitions. In addition to the definitions set forth above, the following capitalized terms shall have the following meanings in this Certificate, unless the context clearly otherwise requires. Reference to “Sections” shall mean sections of this Certificate.

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“Annual Filing” means any Annual Information Filing provided by the City pursuant to, and as described in, Sections 3 and 4.

“Audited Financial Statements” means the audited basic financial statements of the City, prepared in conformity with generally accepted accounting principles.

“Beneficial Owner” means any person that (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2017A Bonds (including persons holding Series 2017A Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2017A Bonds for federal income tax purposes.

“EMMA” means the Electronic Municipal Market Access system of the MSRB; information regarding submissions to EMMA is available at http://emma.msrb.org.

“Filing Date” means the last day of the ninth month following the end of each Fiscal Year (or the next succeeding business day if that day is not a business day), beginning September 30, 2018.

“Fiscal Year” means the 12-month period beginning on January 1 of each year or such other 12- month period as the City shall adopt as its fiscal year.

“Holder” means, with respect to the Series 2017A Bonds, the person in whose name a Series 2017A Bond is registered in accordance with the Bond Legislation.

“MSRB” means the Municipal Securities Rulemaking Board.

“Obligated Person” means, any person, including the issuer of municipal securities (such as the Series 2017A Bonds), who is generally committed by contract or other arrangement to support payment of all or part of the obligations on the municipal securities being sold in an offering document (such as the Official Statement); the City is the only Obligated Person for the Series 2017A Bonds.

“Official Statement” means the Official Statement for the Series 2017A Bonds dated ______, 2017.

“Participating Underwriter” means any of the original underwriters of the Series 2017A Bonds required to comply with the Rule in connection with offering of the Series 2017A Bonds.

“Specified Events” means any of the events with respect to the Series 2017A Bonds as set forth in Section 5(a).

“State” means the State of Ohio.

Section 3. Provision of Annual Information.

(a) The City shall provide (or cause to be provided) not later than the Filing Date to the MSRB an Annual Filing, which is consistent with the requirements of Section 4. The Annual Filing shall be submitted in an electronic format and contain such identifying information as is prescribed by the MSRB, and may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4; provided that if the Audited Financial Statements of the City are unavailable on the Filing Date, the City shall submit unaudited financial statements with the Annual Filing on the Filing Date and then submit the Audited Financial Statements of the City when available. If the City’s Fiscal Year

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changes, it shall give notice of such change in the same manner as for a Specified Event under Section 5.

(b) If the City is unable to provide to the MSRB an Annual Filing by the Filing Date, the City shall, in a timely manner, send a notice to the MSRB in an electronic format as prescribed by the MSRB.

Section 4. Content of Annual Filing. The City’s Annual Filing shall contain or include by reference the following:

(a) Financial information and operating data of the type included in the Official Statement under SECURITY AND SOURCES OF PAYMENT – Debt Service Requirements and Pledged Taxes; in the table Summary of General Fund Cash Receipts by Source and Budgetary Expenditures by Function – Non-GAAP Budgetary Basis under FINANCIAL MATTERS; in the table Summary of General Fund – Fund Balance – GAAP Basis under General Fund Balances; in the table under THE CITY – MAJOR GENERAL FUND REVENUE SOURCES – Municipal Income Taxes and in the table under Local Government Fund (LGF)/Local Government Revenue Assistance Fund (LGRAF); in the tables under Ad Valorem Property Taxes – Assessed Valuation, TAX TABLE A – Overlapping Tax Rates, TAX TABLE B – City Tax Rates, and Collection of Ad Valorem Property Taxes; in the table under CITY DEBT AND OTHER OBLIGATIONS – Debt Outstanding and in the table under Projected Outstanding Debt and Debt Service for Fiscal Year 2018.

(b) The Audited Financial Statements of the City utilizing generally accepted accounting principles applicable to governmental units as described in the Official Statement, except as may be modified from time to time and described in such financial statements; provided that if the Audited Financial Statements of the City are unavailable on the Filing Date, the City shall submit unaudited financial statements with the Annual Filing on the Filing Date and then submit the Audited Financial Statements of the City when available.

The foregoing shall not obligate the City to prepare or update projections of any financial information or operating data.

Any or all of the items listed above may be included by specific reference to other documents, including annual informational statements of the City or official statements of debt issues of the City or related public entities, which have been submitted to the MSRB or the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.

Section 5. Reporting Specified Events.

(a) The City shall provide to the MSRB, in an electronic format and containing such identifying information as is prescribed by the MSRB and in a timely manner but not later than ten business days after the occurrence of the event, notice of any of the following events with respect to the Series 2017A Bonds, as specified by the Rule:

(i) Principal and interest payment delinquencies;

(ii) Non-payment related defaults, if material;

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(iii) Unscheduled draws on debt service reserves reflecting financial ٭;difficulties

(iv) Unscheduled draws on credit enhancements reflecting financial difficulties;*

(v) Substitution of credit or liquidity providers, or their failure to perform;*

(vi) (Issuance of) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security (i.e., the Series 2017A Bonds), or other material events affecting the tax status of the security;

(vii) Modifications to rights of security holders, if material;

(viii) Bond calls, if material, and tender offers;†

(ix) Defeasances;

(x) Release, substitution, or sale of property securing repayment of the securities, if material;‡

(xi) Rating changes;

(xii) Bankruptcy, insolvency, receivership or similar event of the Obligated Person;§

(xiii) The consummation of a merger, consolidation, or acquisition involving an Obligated Person or the sale of all or substantially all of the assets of the Obligated Person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and

(xiv) Appointment of a successor or additional trustee or the change of name of a trustee, if material.

(b) For the Specified Events described in Section 5(a)(ii), (vi, as applicable), (vii), (viii, as applicable), (x), (xiii) and (xiv), where materiality is required, the City acknowledges that

The City has not obtained or provided, and does not expect to obtain or provide, any debt service reserves, credit enhancements or credit or ٭ liquidity providers for the Series 2017A Bonds. † Any scheduled redemption of Series 2017A Bonds pursuant to mandatory sinking fund redemption requirements does not constitute a specified event within the meaning of the Rule. ‡ Repayment of the Series 2017A Bonds is not secured by a lien on any property capable of release or sale or for which other property may be substituted. § For the purposes of the event identified in this subparagraph, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an Obligated Person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Obligated Person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority; or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Obligated Person.

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it must make a determination whether such Specified Event is material under applicable federal securities laws in order to determine whether a filing is required.

Section 6. Amendments. The City reserves the right to amend this Certificate, and noncompliance with any provision of this Certificate may be waived, as may be necessary or appropriate to achieve its compliance with any applicable federal securities law or rule, to cure any ambiguity, inconsistency or formal defect or omission, and to address any change in circumstances arising from a change in legal requirements, change in law, or change in the identity, nature, or status of the City, or type of business conducted by the City. Any such amendment or waiver shall not be effective unless the Certificate (as amended or taking into account such waiver) would have materially complied with the requirements of the Rule at the time of the primary offering of the Series 2017A Bonds, after taking into account any applicable amendments to or official interpretations of the Rule, as well as any change in circumstances and until the City shall have received either (i) a written opinion of bond counsel or other qualified independent special counsel selected by the City that the amendment or waiver would not materially impair the interests of Holders or Beneficial Owners or (ii) the written consent to the amendment or waiver of the Holders of at least a majority of the principal amount of the Series 2017A Bonds then outstanding. An Annual Filing containing any revised operating data or financial information shall explain, in narrative form, the reasons for any such amendment or waiver and the impact of the change on the type of operating data or financial information being provided. If the amendment relates to the accounting principles to be followed in preparing Audited Financial Statements, the City shall provide notice of such change in the same manner as for a Specified Event under Section 5 and the Annual Filing for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements or information as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

Section 7. Additional Information. Nothing in this Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Certificate or providing any other means of communication, or including any other information in any Annual Filing or providing notice of the occurrence of an event, in addition to that which is required by this Certificate. If the City chooses to include any information in any document or notice of occurrence of an event in addition to that which is specifically required by this Certificate, the City shall have no obligation under this Certificate to update such information or include it in any future Annual Filing or notice of occurrence of a Specified Event.

Section 8. Remedy for Breach. This Certificate shall be solely for the benefit of the Holders and Beneficial Owners from time to time of the Series 2017A Bonds. The exclusive remedy for any breach of the Certificate by the City shall be limited, to the extent permitted by law, to a right of Holders and Beneficial Owners to institute and maintain, or to cause to be instituted and maintained, such proceedings as may be authorized at law or in equity to obtain the specific performance by the City of its obligations under this Certificate in a court in Cuyahoga County, Ohio. Any such proceedings shall be instituted and maintained only in accordance with Section 133.25(B)(4)(b) or (C)(1) of the Revised Code (or any like or comparable successor provisions); provided that any Holder or Beneficial Owner may exercise individually any such right to require the City to specifically perform its obligation to provide or cause to be provided a pertinent filing if such a filing is due and has not been made. Any Beneficial Owner seeking to require the City to comply with this Certificate shall first provide at least 30 days’ prior written notice to the City of the City’s failure, giving reasonable detail of such failure, following which notice the City shall have 30 days to comply. A default under this Certificate shall not be deemed an event of default under the Bond Legislation, and the sole remedy under this Certificate in the event of any failure of the City to comply with this Certificate shall be an action to compel performance. No person or entity shall be entitled to recover monetary damages under this Certificate.

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Section 9. Appropriation. The performance by the City of its obligations under this Certificate shall be subject to the availability of funds and their annual appropriation to meet costs that the City would be required to incur to perform those obligations. The City shall provide notice to the MSRB in the same manner as for a Specified Event under Section 5 of the failure to appropriate funds to meet costs to perform the obligations under this Certificate.

Section 10. Termination. The obligations of the City under the Certificate shall remain in effect only for such period that the Series 2017A Bonds are outstanding in accordance with their terms and the City remains an Obligated Person with respect to the Series 2017A Bonds within the meaning of the Rule. The obligation of the City to provide the information and notices of the events described above shall terminate, if and when the City no longer remains such an Obligated Person. If any person, other than the City, becomes an Obligated Person relating to the Series 2017A Bonds, the City shall use its best efforts to require such Obligated Person to comply with all provisions of the Rule applicable to such Obligated Person.

Section 11. Dissemination Agent. The City may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under this Certificate, and may discharge any such agent, with or without appointing a successor dissemination agent.

Section 12. Beneficiaries. This Certificate shall inure solely to the benefit of the City, any dissemination agent, the Participating Underwriter and Holders and Beneficial Owners from time to time of the Series 2017A Bonds, and shall create no rights in any other person or entity.

Section 13. Recordkeeping. The City shall maintain records of all Annual Filings and notices of Specified Events and other events including the content of such disclosure, the names of the entities with whom such disclosures were filed and the date of filing such disclosure.

Section 14. Governing Law. This Certificate shall be governed by the laws of the State.

IN WITNESS WHEREOF, the City has caused this Continuing Disclosure Certificate to be duly signed and delivered to the Underwriter, as part of the Series 2017A Bond proceedings and in connection with the original delivery of the Series 2017A Bonds to the Underwriter, on its behalf by its officials signing below, all as of the date set forth above, and the Holders and Beneficial Owners from time to time of the Series 2017A Bonds shall be deemed to have accepted this Certificate made in accordance with the Rule.

CITY OF CLEVELAND, OHIO

By: Director of Finance

Approved as to form:

By: ______Assistant Director of Law

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APPENDIX F SCHEDULE OF REFUNDED BONDS

Redemption Refunded Interest Earliest Optional Price (% of Series Maturity Rate CUSIP** Par Amount Redemption Date Par)

** Copyright American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the City and are included solely for the convenience of the holders of the Refunded Bonds. The City is not responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the Refunded Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Refunded Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Refunded Bonds

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CITY OF CLEVELAND, OHIO • Subordinate Lien Income Tax Improvement and Refunding Bonds, Series 2017A