Ratings: Moody’s A1 Standard & Poor’s AA- NEW ISSUE BOOK ENTRY FORM ONLY See “RATINGS” herein 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 2015 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 and (ii) interest on, and any profit made on the sale, exchange or other disposition of, the Series 2015 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 2015 Bonds may be subject to certain federal taxes imposed only on certain corporations, including the corporate alternative minimum tax on a portion of that interest. For a more complete discussion of the tax aspects, see “TAX MATTERS” herein. OFFICIAL STATEMENT $60,485,000 County of Cuyahoga, Ohio Excise Tax Revenue Bonds, Series 2015 (Sports Facilities Improvement Project) Dated: Date of Delivery Due: December 1, as shown on the inside cover herein THE SERIES 2015 BONDS ARE SPECIAL OBLIGATIONS OF THE COUNTY SECURED BY THE COUNTY’S EXCISE TAX RECEIPTS AND PLEDGED FUNDS AND DO NOT AND SHALL NOT REPRESENT OR CONSTITUTE A GENERAL OBLIGATION, DEBT OR PLEDGE OF THE FAITH AND CREDIT OF THE COUNTY, THE STATE OF OHIO OR ANY POLITICAL SUBDIVISION THEREOF. Terms used herein with initial capitalization where the rules of grammar would not otherwise so require and not defined have the meanings given to them under “DEFINITIONS” or “APPENDIX A – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE” herein. Principal of the Series 2015 Bonds will be payable at the main corporate office of U. S. Bank National Association, Cleveland, Ohio, as trustee, registrar, paying agent and transfer agent (the “Trustee”) for the Series 2015 Bonds. Interest thereon will be payable semi‑annually on June 1 and December 1 of each year beginning June 1, 2016 to the person whose name appears as the registered holder thereof on the Series 2015 Bond registration records on the record date (15th day of the calendar month next preceding an interest payment date), by check mailed to such registered holder at his address as it appears on such registration records, by such registrar, paying agent and transfer agent without deduction for exchange, collection or service charges. The Series 2015 Bonds will be issuable as fully registered bonds without coupons in the denominations set forth herein. The Series 2015 Bonds will be issuable under a book entry method and registered in the name of The Depository Trust Company (“DTC”) or its nominee. There will be no physical delivery of the Series 2015 Bonds to the ultimate purchasers. The Underwriter has satisfied the requirements of DTC for the Series 2015 Bonds to be eligible for its book entry services. See “BOOK ENTRY SYSTEM” herein. The Series 2015 Bonds maturing on and after December 1, 2024 are subject to optional redemption on any date on or after December 1, 2023. See “THE SERIES 2015 BONDS – Redemption Provisions” herein. The Series 2015 Bonds are offered when, as and if issued and received by the Underwriter, subject to prior sale and to withdrawal or modification of the offer without notice. Certain legal matters relating to the issuance of the Series 2015 Bonds are subject to the approving opinion of Squire Patton Boggs (US) LLP, Bond Counsel. Certain legal matters will be passed upon for the Underwriter by its counsel, Calfee, Halter & Griswold LLP. See “LEGAL MATTERS” and “TAX MATTERS” herein. H. J. Umbaugh & Associates has acted as Municipal Advisor to the County in connection with the issuance of the Series 2015 Bonds. (See “Municipal Advisor” herein.) This cover page contains certain information for general reference only. It is not a summary of the provisions of the Series 2015 Bonds. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. This Official Statement has been prepared by the County of Cuyahoga, Ohio in connection with the original offering for sale by it of the Series 2015 Bonds. It is expected that delivery of the Series 2015 Bonds in definitive form will be made through DTC on or about December 22, 2015. The date of this Official Statement is December 9, 2015, and the information herein speaks only as of that date.
$60,485,000 COUNTY OF CUYAHOGA, OHIO Excise Tax Revenue Bonds, Series 2015 (Sports Facilities Improvement Project)
YEAR PRINCIPAL INTEREST PRICE CUSIP MATURING RATE 2016 $4,350,000 3.00% $102.297 23227E AA6 2017 4,255,000 3.00% 103.894 23227E AB4 2018 4,325,000 5.00% 110.766 23227E AC2 2019 4,485,000 5.00% 113.593 23227E AD0 2020 4,655,000 5.00% 115.885 23227E AE8 2021 4,840,000 5.00% 117.584 23227E AF5 2022 5,035,000 5.00% 118.995 23227E AG3 2023 5,245,000 5.00% 120.057 23227E AH1 2024 5,460,000 5.00% 120.137 23227E AJ7 2025 5,695,000 5.00% 119.254 23227E AK4 2026 5,940,000 5.00% 118.776 23227E AL2 2027 6,200,000 5.00% 118.141 23227E AM0
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______+The County is not responsible for the use of the CUSIP numbers referenced herein nor is any representation made by the County as to their correctness; such CUSIP numbers are included solely for the convenience of the readers of the Official Statement.
$60,485,000 COUNTY OF CUYAHOGA, OHIO Excise Tax Revenue Bonds, Series 2015 (Sports Facilities Improvement Project) County Council
Dan Brady Pernel Jones, Jr. President Vice-President
Shontel Brown Yvonne M. Conwell Michael J. Gallagher Member Member Member
Chuck Germana Dave Greenspan Anthony T. Hairston Member Member Member
Dale Miller Jack Schron Sunny M. Simon Member Member Member County Administration
Armond Budish County Executive
Dennis G. Kennedy, CPA County Fiscal Officer
Robert J. Triozzi, Esq. Director of Law
Professional Services
KeyBanc Capital Markets, Inc. Underwriter
Squire Patton Boggs (US) LLP Bond Counsel
H.J. Umbaugh & Associates Municipal Advisor
U.S. Bank National Association Trustee
i
REGARDING THIS OFFICIAL STATEMENT
This Official Statement does not constitute an offering of any security other than the original offering of the Series 2015 Bonds of the County of Cuyahoga, Ohio (the "County") identified on the cover hereof. No person has been authorized by the County to give any information or to make any representations, other than those contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been given or authorized by the County. Statements contained in this Official Statement that involve estimates, forecasts, or matters of opinion, whether or not expressly described herein, are intended solely as such and are not to be construed as representations of facts.
The information set forth herein has been obtained from the County and other sources that are believed to be reliable for purposes of this Official Statement. This Official Statement contains, in part, estimates and matters of opinion that are not intended as statements of fact, and no representation is made as to the correctness of such estimates and opinions or that they will be realized. The information and expressions of opinions herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the County since the date hereof.
This Official Statement contains statements that the County believes may be "forward-looking statements." Words such as "plan," "estimate," "project," "budget," "anticipate," "expect," "intend," "believe" and similar terms are intended to identify forward-looking statements. The achievement of results or other expectations expressed or implied by such forward-looking statements involves known and unknown risks, uncertainties and other factors that are difficult to predict, may be beyond the County's control and could cause actual results, performance or achievements to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. The County undertakes no obligation, and does not plan, to issue any updates or revisions to such forward-looking statements.
CUSIP data on the inside cover page hereof has been provided by Standard & Poor's CUSIP Service Bureau, a division of the McGraw-Hill Companies, Inc. The CUSIP data is being provided solely for the convenience of the owners of the Series 2015 Bonds only at the time of issuance of the Series 2015 Bonds, and the County does not make any representation with respect to such data or undertake any responsibility for its accuracy now or at any time in the future. The CUSIP data is subject to being changed after the issuance of the Series 2015 Bonds as a result of procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of the Series 2015 Bonds.
Certain information in this Official Statement is attributed to the Ohio Municipal Advisory Council ("OMAC"). OMAC compiles information from official and other sources. OMAC believes the information it compiles is accurate and reliable, but OMAC does not independently confirm or verify the information and does not guarantee its accuracy. OMAC has not reviewed this Official Statement to confirm that the information attributed to it is information provided by OMAC or for any other purpose.
Certain information located at websites referred to herein has been prepared by the respective entities responsible for maintaining such websites. The County takes no responsibility for the continued accuracy of any internet address or the accuracy, completeness, or timeliness of any information posted at any such address. In the absence of an express statement to the contrary, none of such information is incorporated herein by reference.
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The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.
UPON ISSUANCE, THE SERIES 2015 BONDS WILL NOT BE REGISTERED BY THE COUNTY UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE, AND WILL NOT BE LISTED ON ANY STOCK OR OTHER SECURITIES EXCHANGE. THE SERIES 2015 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS ANY OTHER FEDERAL, STATE, MUNICIPAL OR OTHER GOVERNMENTAL ENTITY OR AGENCY, EXCEPT THE COUNTY, PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT OR APPROVED THE SERIES 2015 BONDS FOR SALE. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, AND THERE SHALL NOT BE ANY SALE OF, THE SERIES 2015 BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2015 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE SERIES 2015 BONDS TO CERTAIN DEALERS, DEALER BANKS AND BANKS ACTING AS AGENT AT PRICES LOWER THAN THE PUBLIC OFFERING PRICE STATED ON THE COVER PAGE HEREOF AND SAID PUBLIC OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.
INVESTMENT CONSIDERATIONS
The Series 2015 Bonds, like all obligations of state and local governments, are subject to changes in value due to changes in the condition of the market for tax-exempt obligations or changes in the financial position of the County.
It is possible under certain market conditions, or if the financial condition of the County should change, that the market price of the Series 2015 Bonds could be adversely affected.
With regard to the risk involved in a loss of the exclusion from gross income for purposes of federal income taxation of interest payable on the Series 2015 Bonds, see "TAX MATTERS" herein. With regard to the risk involved in a downward revision or withdrawal of the rating for the Series 2015 Bonds shown on the cover hereof, see "RATINGS" herein.
The County Excise Tax is levied on sales of spirituous liquor, beer, wine and other beverages and cigarettes in the County. The volume of sales of those commodities may vary over the period of time that the Series 2015 Bonds are outstanding, and those variations may include declines in sales with resulting declines in the County Excise Tax Receipts from which Bond Service Charges are payable.
Prospective purchasers of the Series 2015 Bonds should consult their own tax advisors prior to any purchase of the Series 2015 Bonds as to the impact of the Internal Revenue Code of 1986, as amended, upon their acquisition, holding or disposition of the Series 2015 Bonds.
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BOND ISSUE SUMMARY
The information contained in this Bond Issue Summary is qualified in its entirety by the entire Official Statement, which should be reviewed in its entirety by potential investors.
Issuer: County of Cuyahoga, Ohio Issue: $60,485,000 Excise Tax Revenue Bonds, Series 2015 (Sports Facilities Improvement Project) Dated Date: Date of Delivery
Interest Payment Dates: Each June 1 and December 1, beginning June 1, 2016
Principal Payment Dates: December 1, 2016 through December 1, 2027.
Redemption: The Series 2015 Bonds maturing on and after December 1, 2024 are subject to redemption at the option of the County, either in whole or in part, in such order of maturity as the County shall determine, on any date on or after December 1, 2023, at a redemption price equal to 100% of the principal amount redeemed plus, in each case, accrued interest to the date fixed for redemption. See “THE SERIES 2015 BONDS- Redemption - Optional Redemption of the Series 2015 Bonds” herein. Purpose: The Series 2015 Bonds are being issued for the purpose of (i) constructing, reconstructing, refurbishing, renovating and improving or repairing sports facilities and reimbursing the County for costs incurred by the County in constructing sports facilities, together with all necessary appurtenances and work incidental thereto, (ii) paying capitalized interest on the Series 2015 Bonds, (iii) funding a deposit to the Bond Reserve Fund, and (iv) paying expenses incurred in connection with the issuance of the Series 2015 Bonds. See "THE SERIES 2015 BONDS – Authorization and Purpose" herein. Security: The Series 2015 Bonds will be special obligations of the County secured by a pledge of the County Excise Tax Receipts and the Pledged Funds. Neither the general credit of the County, nor that of the State of Ohio or of any political subdivision thereof, is pledged to the payment of principal of, or premium or interest on the Series 2015 Bonds. The Series 2015 Bonds are not secured by the full faith and credit of the County or by any revenues of the County other than the proceeds of the County Excise Tax. See “SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2015 BONDS” Credit Rating: The County has received ratings on the Series 2015 Bonds from Moody's Investors Service, Inc. and Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc., "A1" and "AA-", respectively. See "RATINGS" herein.
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Tax Matters: In the opinion of Bond Counsel, under existing law (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the Series 2015 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 and (ii) interest on, and any profit made on the sale, exchange or other disposition of, the Series 2015 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 2015 Bonds may be subject to certain federal taxes imposed only on certain corporations, including the corporate alternative minimum tax on a portion of that interest. See "TAX MATTERS" herein. Bank Qualification: The County has not designated the Series 2015 Bonds as "qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. Bond Counsel: Squire Patton Boggs (US) LLP
Trustee: U.S. Bank National Association
Underwriter: KeyBanc Capital Markets, Inc.
Underwriter's Counsel: Calfee, Halter & Griswold LLP
Municipal Advisor: H. J. Umbaugh & Associates
Book Entry The Series 2015 Bonds are being issued as fully registered Bonds in book entry form and System: book entry interests therein will be available for purchase in amounts of $5,000 and integral multiples thereof. Owners of book entry interests will not receive physical delivery of Bond certificates. The Depository Trust Company or its nominee will receive all payments with respect to the Series 2015 Bonds from the Bond Registrar. The Depository Trust Company is required by its rules and procedures to remit such payments to its participants for subsequent disbursement to owners of the book entry interests. Delivery and It is expected that delivery of the Series 2015 Bonds in definitive form will be made Payment: through DTC on or about December 22, 2015. The Series 2015 Bonds will be released to the Underwriter against payment in federal funds. County Official: Questions concerning the Official Statement should be directed to Dennis G. Kennedy, County Fiscal Officer, 2079 East 9th St., Cleveland, Ohio 43040. Telephone: (216) 443- 8191.
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TABLE OF CONTENTS
REGARDING THIS OFFICIAL STATEMENT ...... ii INVESTMENT CONSIDERATIONS ...... iii INTRODUCTORY STATEMENT ...... 1 DEFINITIONS ...... 2 THE SERIES 2015 BONDS ...... 4 Authorization and Purpose ...... 4 Form and Terms ...... 5 Redemption Provisions ...... 5 ESTIMATED SOURCES AND USES OF FUNDS ...... 6 SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2015 BONDS ...... 6 County Excise Tax ...... 7 County Excise Tax Bonds ...... 7 Application of Revenues; Payment of Bond Service Charges ...... 8 ISSUANCE OF ADDITIONAL BONDS ...... 11 ISSUING OR INCURRING SUBORDINATED INDEBTEDNESS ...... 11 UNDERWRITING ...... 11 MUNICIPAL ADVISOR...... 12 RATINGS ...... 12 LITIGATION ...... 13 LEGAL MATTERS ...... 13 TAX MATTERS ...... 14 BOOK ENTRY SYSTEM ...... 16 REVISION OF BOOK ENTRY SYSTEM - REPLACEMENT BONDS ...... 18 TRANSCRIPT AND CLOSING DOCUMENTS ...... 18 CONTINUING DISCLOSURE ...... 19 CONCLUDING STATEMENT ...... 20 APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE ...... A-1 APPENDIX B - THE COUNTY OF CUYAHOGA, OHIO...... B-1 APPENDIX C - AUDITED BASIC FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED DECEMBER 31, 2014...... C-1
APPENDIX D - GATEWAY ECONOMIC DEVELOPMENT CORPORATION OF GREATER CLEVELAND ...... D-1 vi
APPENDIX E - PROPOSED TEXT OF BOND COUNSEL OPINION...... E-1
APPENDIX F - SAMPLE CLOSING CERTIFICATES...... F-1
APPENDIX G - SAMPLE CONTINUING DISCLOSURE CERTIFICATE...... G-1
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INTRODUCTORY STATEMENT
This Official Statement has been prepared by the County of Cuyahoga, Ohio in connection with the original issuance and sale by the County of the Series 2015 Bonds.
All financial and other information presented herein has been provided by the County 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 historic information, and is not intended to indicate future or continuing trends in the financial position or other affairs of the County. No representation is made that past experience, as might be shown by such financial and other information, will necessarily continue or be repeated in the future.
Certain statements contained in this Official Statement, including, without limitation, statements containing the words "believes," "anticipates," "expects" and words of similar import, involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the County to be materially different from any future results, performance or achievements expressed or implied by such statements. Such factors include, among others, general economic conditions, demographic changes, and existing government regulations and changes in, or the failure to comply with, government regulations. Certain of these factors are discussed in more detail elsewhere in this Official Statement. Given these uncertainties, readers of this Official Statement and investors are cautioned not to place undue reliance on such forward-looking statements.
This Official Statement should be considered in its entirety and no subject discussed should be considered less important than any other subject by reason of its location in the text. Reference should be made to laws, reports or documents referred to for more complete information regarding their contents.
As used in this Official Statement, "debt service" means principal of and interest on the Series 2015 Bonds. "State" or "Ohio" means the State of Ohio. "OMAC" means Ohio Municipal Advisory Council, a data clearing organization supported by investment banking firms active in Ohio and the State Information Depository for the State of Ohio as approved by the Ohio General Assembly and the Securities and Exchange Commission.
References herein to provisions of Ohio law, whether codified in the Revised Code or uncodified, the Ohio Constitution, or federal law, are references to such provisions as they presently exist. Provisions of the Ohio law and Constitution and federal law may in the future, and from time to time, be amended, repealed or supplemented.
Additional information relating to the financial condition of the County may be obtained by contacting Dennis G. Kennedy, County Fiscal Officer, 2079 East 9th St., Cleveland, Ohio 43040. Telephone: (216) 443-8191.
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DEFINITIONS
The following capitalized terms, as used in this Official Statement and the Appendices attached hereto, have the following meanings unless otherwise indicated:
As used herein, the following terms shall be defined as follows:
"Additional Bonds" means any Bonds issued on a parity with the Series 2015 Bonds upon the terms and conditions set forth in Article II of the Indenture.
"Bond Counsel" means Squire Patton Boggs (US) LLP, Cleveland, Ohio.
"Bond Registrar" means the Trustee.
"Bonds" means the County’s Series 2015 Bonds and any Additional Bonds or Series of Bonds authorized by legislation adopted by the County and issued pursuant to the Indenture.
"Council" means County Council, the County's legislative authority.
"County" means the County of Cuyahoga, Ohio.
"County Fiscal Officer" means the Fiscal Officer of the County.
"County Excise Tax" means the excise taxes on spirituous liquor, beer, wine and other beverages and cigarettes sold in the County, the question of the continuing levy of which for twenty (20) years beginning August 1, 2015, for the purpose of paying the cost of constructing, renovating, improving or repairing sports facilities and reimbursing the County for costs incurred by the County in the construction of sports facilities, the Council, pursuant to the County Excise Tax Resolution, caused to be submitted to the electors of the County at the special election on May 6, 2014, at which special election that ballot measure received a majority affirmative vote of the electors of the County, with the consequence that the taxes thereby levied went into effect beginning August 1, 2015.
"County Excise Tax Receipts" means the monies received by the County from the County Excise Tax.
“County Excise Tax Resolution” means Resolution No. R2014-0002, adopted by the Council on January 28, 2014.
"Cover" means the cover page and the inside cover of this Official Statement.
"Indenture" means the Trust Indenture, as amended and supplemented by Supplemental Indenture No. 1, and as the same may be amended or supplemented by any other Supplemental Indentures entered into in accordance with the Indenture as previously amended and supplemented.
"MSA" means the Cleveland Metropolitan Statistical Area, as defined by the United States Office of Management and Budget, including Cuyahoga, Geauga, Lake, Lorain and Medina Counties.
"Pledged Funds" means the Bond Fund, the Bond Reserve Fund and any other funds established under the Indenture and pledged as security for the Bonds.
"Pledged Revenues" means, collectively, (a) the County Excise Tax Receipts and (b) all monies in the Pledged Funds and all income and profit from the investment of those monies.
2
"Revised Code" means the Ohio Revised Code.
"Series 2015 Bonds" means the County's $60,485,000 Excise Tax Revenue Bonds, Series 2015 (Sports Facilities Improvement Project), dated December 22, 2015.
"State" means the State of Ohio.
"State Auditor" means Auditor of the State.
"Supplemental Indenture" means any indenture supplemental to the Indenture entered into between the County and the Trustee in accordance with Article X of the Indenture.
"Trust Indenture" means the Trust Indenture, dated as of December 1, 2015, by and between the County and the Trustee.
"Trustee" means U.S. Bank National Association.
"Underwriter" means KeyBanc Capital Markets, Incorporated.
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THE SERIES 2015 BONDS
Authorization and Purpose
The Series 2015 Bonds are authorized by Resolution No. R2015-0210 adopted by the County Council on November 24, 2015, as to the Series 2015 Bonds, (the "Bond Legislation"), and Chapters 133 and 307 of the Revised Code.
The Series 2015 Bonds are issued in conformity with Chapters 133 and Section 307.673, Revised Code, and are, therefore, lawful investments for banks, savings and loan associations, credit union share guaranty corporations, trust companies, trustees, fiduciaries, insurance companies, including domestic for life and domestic not for life, trustees or other officers having charge of sinking and bond retirement or other funds of the State, subdivisions and taxing districts of the State, the Commissioners of the Sinking Fund of the State, the Administrator of Workers' Compensation, the State teachers, public employees, and school employees retirement systems, and the police and fire pension fund, and are eligible as security for the repayment of the deposit of public moneys.
The Series 2015 Bonds are issued for the purpose of (i) constructing, reconstructing, refurbishing, renovating and improving or repairing sports facilities and reimbursing the County for costs incurred by the County in constructing sports facilities, together with all necessary appurtenances and work incidental thereto, (ii) paying capitalized interest on the Series 2015 Bonds, (iii) funding a deposit to the Bond Reserve Fund, and (iv) paying expenses incurred in connection with the issuance of the Series 2015 Bonds.
Gateway Economic Development Corporation of Greater Cleveland ("Gateway") is a private, nonprofit corporation organized under Chapter 1702 of the Revised Code. Pursuant to Revised Code, Section 307.696, et seq. (the "Act"), Gateway, the City of Cleveland, Cuyahoga County (the "City") and the County entered into the Three Party Agreement, as hereinafter defined, regarding the ownership, construction, financing and operation of the sports facility and related economic development activities. Under the Act and the Agreement Relating to Ownership, Financing, Construction and Operation of a Sports Facility and Related Economic Redevelopment Projects dated November 7, 1990, among Gateway, the City and the County, and amended on September 15, 1992, and as further amended (the "Three Party Agreement"), Gateway has been authorized to construct, own and provide for the operation of sports facilities under the Act, namely the Progressive Field baseball park located in downtown, Cleveland, Ohio, which is the home field of the Cleveland Indians of Major League Baseball, and the Quicken Loan Arena also located in downtown Cleveland, Ohio and the home of the Cleveland Cavaliers of the National Basketball Association, the Lake Erie Monsters of the American Hockey League, and the Cleveland Gladiators of the Arena Football League. Pursuant to the Act, the Three Party Agreement and the Bond Legislation, the Series 2015 Bonds will be used for the purposes described-above, including to reimburse or to pay to Gateway, as lessor of the sports facilities, the costs of Major Capital Repairs as described under the terms of the lease agreements for Progressive Field and Quicken Loan Arena. Gateway is not an obligor of the Series 2015 Bonds, and no revenues derived from the Gateway sports facilities are pledged for the payment of Bond Service Charges. Sports facilities, as defined in the County Excise Tax Resolution, includes First Energy Stadium, which is the home of the Cleveland Browns of the National Football League. Proceeds of Additional Bonds issued under the Indenture may be used to finance costs of improvements to the First Energy Stadium. See APPENDIX D attached hereto for further information regarding Gateway.
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Form and Terms
The Series 2015 Bonds will be issued in fully registered form and will bear interest from the date of delivery until maturity or earlier redemption, at the rates per annum as set forth on the cover page hereof, payable on June 1 and December 1, commencing December 1, 2016, and will mature on December 1 in the years as indicated on the cover page of this Official Statement. The Series 2015 Bonds will be issued in denominations of $5,000 or any integral multiple thereof, provided that each Series 2015 Bond will be of a single maturity, and will be numbered consecutively from R-1 upward.
Principal of the Series 2015 Bonds will be payable at maturity or subject to sinking fund redemption, in lawful money of the United States of America, at the designated corporate trust office of Trustee in St. Paul, Minnesota, which has been designated as bond registrar, paying agent, and transfer agent for the Series 2015 Bonds (the "Bond Registrar"). Interest on the Series 2015 Bonds will be payable to the person whose name appears as the registered holder thereof on the registration records maintained by the Bond Registrar, on the respective Record Date (15th calendar day of the month next preceding an interest payment date) by check mailed to such registered holder at the address of such registered holder as it appears on the registration records. No deduction shall be made for exchange, collection, or service charges.
Redemption Provisions
Optional Redemption
The Series 2015 Bonds maturing on and after December 1, 2024 are subject to redemption at the option of the County, either in whole or in part, in such order of maturity as the County shall determine, on any date on or after December 1, 2023, at a redemption price equal to 100% of the principal amount redeemed plus, in each case, accrued interest to the date fixed for redemption.
When partial redemption is authorized, the Series 2015 Bonds or portions thereof will be selected by lot within a maturity in such manner in accordance with DTC procedures as the Trustee may determine, provided, however, that the portion of any such Series 2015 Bond so selected will be in the amount of $5,000 or any integral multiple thereof. The notice of the call for redemption of Series 2015 Bonds shall identify (i) by designation, letters, numbers or other distinguishing marks, such Series 2015 Bonds or portions thereof to be redeemed, (ii) the redemption price to be paid, (iii) the date fixed for redemption, date and (iv) the place or places where the amounts due upon redemption are payable. From and after the specified redemption date, interest on such Series 2015 Bonds (or portions thereof) called for redemption shall cease to accrue. Such notice shall be sent by first class mail to each such registered holder at the address shown in the Series 2015 Bond registration records at least 30 days prior to the redemption date. Failure to receive such notice or any defect therein shall not affect the validity of the proceedings for the redemption of any such Series 2015 Bond.
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5
ESTIMATED SOURCES AND USES OF FUNDS
The proceeds of the Series 2015 Bonds will be applied as follows:
Sources
Par Value of the Series 2015 Bonds $60,485,000.00
Original Issue Premium $9,375,816.90
Cash from Excise Tax Receipts Received Since August $987,274.58 2015 Total Sources $70,848,091.48
Uses
Deposit to Series 2015 Project Fund $60,483,118.00
Deposit to Bond Reserve Fund $7,035,774.58
Deposit to Series 2015 Interest Payment Subaccount $2,693,141.40
Deposit to Series 2015 Cost of Issuance Subaccount* $636,057.50
Total Uses $70,848,091.48
SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2015 BONDS
The Series 2015 Bonds are limited special revenue obligations of the County, payable from the Pledged Revenues and Pledged Funds as described herein, subject to Chapter 9 of the Federal Bankruptcy Code and other laws affecting creditors' rights. Neither the general credit of the County, nor that of the State of Ohio or of any political subdivision thereof, is pledged to the payment of the principal of, or premium, if any, or interest on the Series 2015 Bonds.
THE SERIES 2015 BONDS ARE NOT GENERAL OBLIGATIONS OF THE COUNTY, THE STATE OF OHIO, OR ANY POLITICAL SUBDIVISION THEREOF, AND ARE NOT SECURED BY THE FULL FAITH AND CREDIT OF THE COUNTY, THE STATE, OR ANY POLITICAL SUBDIVISION THEREOF, AND THE OWNERS AND HOLDERS OF THE SERIES 2015 BONDS DO NOT HAVE THE RIGHT TO HAVE ANY EXCISE, SALES TAXES OR OTHER TAXES, OTHER THAN THE COUNTY EXCISE TAX, LEVIED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO OR THE TAXING AUTHORITY OF ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE COUNTY, FOR THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2015 BONDS.
* Includes Underwriter's compensation, printing costs, rating fees, Trustee fees, Municipal Advisor fees, legal fees, and certain miscellaneous expenses. 6
County Excise Tax
The County currently levies an excise tax at the rate of three dollars on each gallon of spirituous liquor sold in the county, sixteen cents per gallon on the sale of beer (one point five cents per 12-ounce bottle) sold at wholesale in the county, thirty-two cents per gallon (six cents per 750 ml bottle of wine) on the sale of wine and mixed beverages sold at wholesale in the county, twenty-four cents per gallon on the sale of cider sold at wholesale in the county, and 2.25 mills per cigarette on the sale of cigarettes sold at wholesale in the county for a period of twenty (20) years beginning August 1, 2015. The County Excise Tax was authorized pursuant to the County Excise Tax Resolution which was adopted by the Council of the County on January 28, 2014, which caused the County to submit to the electors of the County at the special election on May 6, 2014, the question whether the excise taxes shall continue to be levied by the County, at which special election that ballot measure received a majority affirmative vote of the electors of the County, with the consequence that the taxes thereby levied went into effect beginning August 1, 2015. No portion of County Excise Tax is now subject to repeal by referendum or initiative. The County Excise Tax is collected by the State and distributed monthly to the County, Receipts for the County Excise Tax since 2005, are set forth in the table below.
Historical County Excise Tax Collections - County of Cuyahoga, Ohio
Wine/Mixed Total Collection Period Cigarettes Alcohol Beer Beverage Collections 2005 (Jan-Dec) $1,318,910 $1,626,154 $1,957,269 $428,547 $5,330,880 2006 (Jan-Dec) 3,669,400 5,048,977 4,693,307 1,093,337 14,505,021 2007 (Jan-Dec) 3,533,060 5,080,847 4,442,124 1,135,223 14,191,254 2008 (Jan-Dec) 2,910,136 5,082,429 4,437,035 1,165,038 13,594,638 2009 (Jan-Dec) 2,784,027 5,096,305 4,244,813 1,189,923 13,315,068 2010 (Jan-Dec) 2,622,926 5,088,923 4,387,030 1,127,831 13,226,710 2011 (Jan-Dec) 2,570,663 5,160,865 4,174,193 1,235,278 13,140,999 2012 (Jan-Dec) 2,558,401 5,467,920 4,290,576 1,338,207 13,655,104 2013 (Jan-Dec) 2,553,788 5,406,899 3,963,519 1,230,982 13,155,188 2014 (Jan-Dec) 2,401,244 6,619,100 4,040,856 1,319,409 14,380,609 Average* $2,844,849 $5,339,141 $4,297,050 $1,203,914 $13,684,955 Total $128,495,471
* Annual average Excise Tax collections from 2006 - 2014.
County Excise Tax Bonds
Pursuant to Sections 307.696, 307.697, 4301.421 and 5743.024 of the Revised Code, the County is authorized to submit to the voters a tax on spirituous liquor, beer, wine and mixed beverages, cider and cigarettes.
The County currently levies an excise tax at the rate of three dollars on each gallon of spirituous liquor sold in the county, sixteen cents per gallon on the sale of beer (one point five cents per 12-ounce bottle) sold at wholesale in the county, thirty-two cents per gallon (six cents per 750 ml bottle of wine) on the sale of wine and mixed beverages sold at wholesale in the county, twenty-four cents per gallon on the sale of cider sold at wholesale in the county, and 2.25 mills per cigarette on the sale of cigarettes sold at wholesale in the county for a period of twenty (20) years beginning August 1, 2015.
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To secure the payment of the Bond Service Charges on the Bonds, the County has pledged in the Indenture the County Excise Tax Receipts to the Trustee and has pledged, assigned and created a security interest in the Pledged Revenues and the Pledged Funds to and in favor of the Trustee. The Pledged Revenues comprise all money in the Pledged Funds and all income and profit from the investment of that money.
The County has created the Bond Fund and the Bond Reserve Fund under the Indenture as Pledged Funds in the custody of the Trustee. The County has agreed in the Indenture to fund the Bond Fund and to maintain the Bond Reserve Requirement in the Bond Reserve Fund from the County Excise Tax Receipts upon receipt.
The County is not prohibited from using other lawfully available funds to pay debt service on the Series 2015 Bonds.
Application of Revenues; Payment of Bond Service Charges
Pursuant to the Indenture, the County will direct the Tax Commissioner or other appropriate official of the State to deposit the County Excise Tax Receipts each month into the Revenue Fund. Pursuant to the Indenture, the Trustee shall deposit the County Excise Tax Receipts and all other monies received by the Trustee under and pursuant to the provisions of the Indenture to be paid into the Funds and Accounts established under the Indenture as follows:
FIRST: All the County Excise Tax Receipts and all such other monies shall be deposited in the Interest Payment Account, until the balance in that Account (after all monies in the Capitalized Interest Account of the Bond Fund related to a particular series of Bonds have been transferred to the Interest Payment Account for payment of that Series of Bonds) suffices to pay interest on the Bonds due on the next two succeeding Interest Payment Dates;
SECOND: After the deposits in the Interest Payment Account required by paragraph FIRST above, all the County Excise Tax Receipts and all such other monies shall be deposited in the Principal Payment Account until the balance in that Account suffices to pay the principal amount due at maturity or upon Mandatory Sinking Fund Redemption of the Bonds on the next succeeding Principal Payment Date;
THIRD: After the deposits required by paragraphs FIRST and SECOND above, all the County Excise Tax Receipts and all such other monies shall be deposited in the Bond Reserve Fund until the balance in the Bond Reserve Fund equals the Bond Reserve Requirement, if any, for each series of Bonds outstanding;
FOURTH: After the deposits required by Paragraphs FIRST, SECOND and THIRD above, all the County Excise Tax Receipts and all such other monies shall be applied to the payment of the Trustee’s fees and expenses for Ordinary Services and Extraordinary Services then due and payable; and
FIFTH: After the deposits and payments required by Paragraphs FIRST, SECOND, THIRD and FOURTH above, all the County Excise Tax Receipts, including any County Excise Tax Receipts then remaining on deposit in the Revenue Fund, and all such other monies shall be deposited in the Facilities Improvement Fund and disbursed in accordance with the Indenture for any lawful purpose for which County Excise Tax Receipts may be expended.
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If, five (5) Business Days prior to any Interest Payment Date or Principal Payment Date, the amount on deposit in the Interest Payment Account of the Bond Fund or the Principal Payment Account of the Bond Fund, as applicable, is not sufficient to pay the interest on or principal of (at maturity or by Mandatory Sinking Fund Redemption) any Bonds due on that date, the Trustee shall transfer from the Bond Reserve Fund to the Interest Payment Account and the Principal Payment Account, in that order, the amounts needed to cure or reduce as fully as possible such insufficiency.
Prior to making any transfer from the Bond Reserve Fund and otherwise at any time at which the monies in the Bond Service Fund are insufficient for the payment of Bond Service Charges then due, the Trustee shall first transfer any balance in the Facilities Improvement Fund to the Interest Payment Account or the Principal Payment Account (in that order) to eliminate that insufficiency as fully as possible, utilizing any balance in the General Account for that purpose.
Subject to the requirements of the preceding paragraph, the monies in the Facilities Improvement Fund may be used for any lawful purpose for which County Excise Tax Receipts may be expended, (i.e., for the purpose of paying the cost of constructing, renovating, improving or repairing sports facilities and reimbursing the County for costs incurred by the County in the construction of sports facilities, as set forth in the County Excise Tax Resolution).
The Trustee shall disburse monies from the Facilities Improvement Fund upon requisition of the County Executive or Fiscal Officer. Each such requisition shall certify: (i) the amount of the requisition; (ii) the purpose of the requisition; and (iii) the payee of the requisitioned monies. Each such requisition shall include the representation that: (A) the purpose of the requisition is a permitted purpose for County Excise Tax Receipts; and (B) prior to submitting the requisition, the County has obtained all required consents and approvals of any other party or person whose consent thereto or approval thereof is required by law or by any agreement to which the County is party.
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The table below presents the coverage ratio for debt service on the Bonds based on County Excise Tax Receipts for 2014 and 2015 and debt service on the Series 2015 Bonds commencing in 2016. The Excise Tax Revenues shown for the Years 2015 through 2027 are the average of the actual collections for fiscal years 2013 and 2014 and do not constitute a forecast or projection.
Excise Tax Revenue Bond Coverage County of Cuyahoga, Ohio Year Excise Tax Excise Tax Excise Tax Debt Revenues Bonds Debt Service Coverage Service Ratio
2013 $13,155,188 - - 2014 14,380,609 - - 2015 13,767,899 - - 2016 13,767,899 $7,035,775 195.7% 2017 13,767,899 6,976,650 197.3% 2018 13,767,899 6,919,000 199.0% 2019 13,767,899 6,862,750 200.6% 2020 13,767,899 6,808,500 202.2% 2021 13,767,899 6,760,750 203.6% 2022 13,767,899 6,713,750 205.1% 2023 13,767,899 6,672,000 206.4% 2024 13,767,899 6,624,750 207.8% 2025 13,767,899 6,586,750 209.0% 2026 13,767,899 6,547,000 210.3% 2027 13,767,899 6,510,000 211.5%
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ISSUANCE OF ADDITIONAL BONDS
The Indenture requires that before any such Additional Bonds are issued, the County must (among other things) certify (i) that reasonably projected continuing County Excise Tax Receipts to be received from and after the date of delivery of such Additional Bonds to the original purchaser thereof are sufficient in time and amount to pay all Bond Service Charges on all Bonds and all debt service changes in subordinated indebtedness outstanding immediately after delivery of such Additional Bonds when due without regard to any optional redemption and (ii) that one half of the aggregate continuing County Excise Tax Receipts during the twenty-four (24) consecutive calendar months prior to the sale of the Additional Bonds is greater than one hundred eighty-five percent (185%) of the amount of Bond Service Charges on all Bonds outstanding immediately after delivery of such Additional Bonds due and payable during any year plus one hundred fifty percent (150%) of all debt service charges on all Subordinated Indebtedness due and payable during any Bond Year; provided, however, that if such Additional Bonds are to be sold during the twenty-four (24) months beginning August 1, 2015, then the amount of County Excise Tax Receipts to be used to in such calculation shall be the average amount of County Excise Tax Receipts received in each month following August 1, 2015 in which County Excise Tax Receipts are received, multiplied by twelve (12).
ISSUING OR INCURRING SUBORDINATED INDEBTEDNESS
The Indenture provides that the County may from time to time issue or incur Subordinated Indebtedness for the same purposes for which the County may issue the Series 2015 Bonds and for the purpose of refunding or advance refunding Subordinated Indebtedness previously issued for those purposes, subject to the Additional Bonds Test. Any Supplemental Indenture applicable to the Subordinated Indebtedness shall provide for the creation or maintenance of a subordinated debt service fund and for the requirement of deposits of County Excise Tax Receipts at times and in amounts consistent with the requirement that debt service charges on Subordinated Indebtedness are payable and secured on a basis subordinate to the Bond Service Charges and to any obligation of the Issuer under the Indenture to many any required deposit to the Bond Reserve Fund. Any Supplemental Indenture applicable to subordinated indebtedness shall also provide that neither the holders of such Subordinated Indebtedness nor any trustee on their behalf shall have the right, power or authority to cause acceleration of such Subordinated Indebtedness unless and until the Trustee has exercised any power it may have to accelerate the Bonds.
UNDERWRITING
KeyBanc Capital Markets, Incorporated, as the underwriter (the "Underwriter"), has agreed, pursuant to the Bond Purchase Agreement (the "Purchase Agreement") with the County dated December 9, 2015, to purchase all, but not less than all, of the Series 2015 Bonds at a purchase price of $69,473,500.40 (the "Purchase Price"), which is equal to the par amount of the Series 2015 Bonds $60,485,000, plus original issue premium ($9,375,816.90), less Underwriter's discount ($387,316.50), plus accrued interest, if any.
The Underwriter is purchasing the Series 2015 Bonds as originally issued for purpose of resale. The Underwriter reserves the right to join with dealers and other underwriters in offering the Series 2015 Bonds to the public. The Underwriter may offer and sell the Series 2015 Bonds to certain dealers (including dealer banks and dealers depositing the Series 2015 Bonds into unit investment trusts, certain of which may be sponsored or managed by the Underwriter), and others at prices lower than the public offering prices noted on the cover page hereof. The initial offering prices of the Series 2015 Bonds may be changed, from time to time, by the Underwriter.
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The obligation of the Underwriter to accept delivery of the Series 2015 Bonds is subject to various conditions of the Purchase Agreement. The Underwriter is obligated to purchase all of the Series 2015 Bonds if any of the Series 2015 Bonds are purchased.
MUNICIPAL ADVISOR
The County has retained H.J. Umbaugh & Associates, Certified Public Accountants, LLP (the “Municipal Advisor”), to provide financial advice in connection with the issuance of the Series Bonds. The Municipal Advisor’s duties, responsibilities and fees arise solely as Municipal Advisor to the County and it has no secondary obligations or other responsibility. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for accuracy, completeness or fairness of the information contained in this Official Statement. The Municipal Advisor’s fees are expected to be paid from proceeds of the Bonds. Municipal Advisor Registration The Municipal Advisor is registered with the Securities and Exchange Commission and the Municipal Securities Rulemaking Board. As such, the Municipal Advisor is providing certain specific municipal advisory services to the County, but is neither a placement agent to the City nor a broker/dealer. The offer and sale of the Bonds shall be made by the County, in the sole discretion of the County, and under its control and supervision. The County agrees that the Municipal Advisor does not undertake to sell or attempt to sell the Bonds, and will take no part in the sale thereof. Other Financial Industry Activities and Affiliations Umbaugh Cash Advisory Services, LLC (“UCAS”) is a wholly-owned subsidiary of the Municipal Advisor. UCAS is registered as an investment adviser with the Securities and Exchange Commission under the federal Investment Advisers Act. UCAS provides non-discretionary investment advice with the purpose of helping clients create and maintain a disciplined approach to investing their funds prudently and effectively. UCAS may provide advisory services to the clients of the Municipal Advisor. UCAS has no other activities or arrangements that are material to its advisory business or its clients with a related person who is a broker-dealer, investment company, other investment adviser or financial planner, bank, law firm or other financial entity. RATINGS
As noted on the cover page, the County has received ratings on the Series 2015 Bonds from Moody's Investors Service, Inc. and Standard & Poor's Ratings Services, a division of The McGraw Hill Companies, Inc., “A1” and “AA-”, respectively. No application for a rating has been made to any other rating agency.
The ratings reflect only the views of such rating agency. Any explanation of the significance of the rating may only be obtained from Moody's Investors Service, Inc., 7 World Trade Center, New York, New York 10007, telephone (212) 553-0300, website www.moodys.com, and Standard & Poor's Ratings Services, a division of The McGraw Hill Companies, Inc., 55 Water Street, New York, New York 10041, telephone (212) 438-2000, website www.standardpoors.com.
The County 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 2015 Bonds and the County. Generally, rating agencies base their ratings on such information and materials, as well as investigation, studies and assumptions by the rating agencies. Such ratings are not recommendations to buy, sell or hold the Series 2015 Bonds.
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There can be no assurance that the ratings, as assigned, will continue for any given period of time or that it will not be lowered or withdrawn entirely by the rating agencies if, in its judgment, circumstances so warrant. In addition, the County currently expects to provide to the rating agency (but assumes no obligation to furnish to the Underwriter or the holders from time to time of the Series 2015 Bonds) further information and materials that it or they may request. The County does not, however, obligate itself hereby to furnish such information and materials, and may issue unrated bonds and notes from time to time. Failure by the County to furnish such information and materials, or the issuance of unrated bonds or notes, may result in the suspension or withdrawal of either rating agency's rating on the Series 2015 Bonds. Any lowering, suspension or withdrawal of such ratings may have an adverse effect on the marketability or market price of the Series 2015 Bonds.
LITIGATION
To the knowledge of the appropriate officials of the County, no litigation or administrative action or proceeding is pending or threatened restraining or enjoining, or seeking to restrain or enjoin, the issuance and delivery of the Series 2015 Bonds, or contesting or questioning the proceedings and authority under which the Series 2015 Bonds are to be authorized and are to be issued, sold, executed or delivered, or the validity of the Series 2015 Bonds. A no-litigation certificate to such effect will be delivered to the Underwriter at the time of original delivery of the Series 2015 Bonds to the Underwriter.
The County is a party to various legal proceedings seeking damages or injunctive relief and generally incidental to its operations. These proceedings are unrelated to the Series 2015 Bonds or the security therefor. The ultimate disposition of such proceedings is not presently determinable, but will not, in the opinion of the County officials, have a material adverse effect on the Series 2015 Bonds or the security therefor.
LEGAL MATTERS
Legal matters incident to the issuance of the Series 2015 Bonds and with regard to the excludability from gross income for federal income tax purposes of the interest thereon (see "TAX MATTERS" herein) are subject to the approving opinion of Squire Patton Boggs (US) LLP, Bond Counsel to the County. A signed copy of that opinion will be delivered to the Underwriter at the time of original delivery, and a copy will be printed on the Series 2015 Bonds. Assuming no change in applicable law prior to the date of delivery of such opinion, the opinion will be substantially in the form attached hereto as APPENDIX E. The opinion will speak only as of its date, and subsequent distribution of it by recirculation of the 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 the date thereof. Certain legal matters will be passed upon for the Underwriter by its counsel, Calfee, Halter & Griswold LLP. Certain legal matters will be passed upon by the Director of Law for the County.
While Bond Counsel has participated in the preparation of portions of this Official Statement, it has not been engaged to confirm or verify, and expresses and will express no opinion as to the accuracy, completeness or fairness of any of the statements in this Official Statement, including its appendices (other than APPENDIX E), or in any other reports, financial information, offering or disclosure documents or other information pertaining to the County or the Series 2015 Bonds that may be prepared or made available by the County or others to the holders of the Series 2015 Bonds or others.
The County has retained the legal services of Calfee, Halter & Griswold LLP from time to time as bond counsel. Squire Patton Boggs (US) LLP and Calfee, Halter & Griswold LLP also serve and have served as bond counsel for one or more of the political subdivisions that the County territorially overlaps.
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Both Calfee, Halter & Griswold LLP and Squire Patton Boggs (US) LLP have served as counsel to the Underwriters in connection with matters that do not relate to the County.
TAX MATTERS In the opinion of Squire Patton Boggs (US) LLP, Bond Counsel, under existing law: (i) interest on the Series 2015 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; and (ii) interest on, and any profit made on the sale, exchange or other disposition of, the Series 2015 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 2015 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 County contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that the Series 2015 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 County’s certifications and representations or the continuing compliance with the County’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 2015 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 County may cause loss of such status and result in the interest on the Series 2015 Bonds being included in gross income for federal income tax purposes retroactively to the date of issuance of the Series 2015 Bonds. The County has covenanted to take the actions required of it for the interest on the Series 2015 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 2015 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 2015 Bonds or the market value of the Series 2015 Bonds.
A portion of the interest on the Series 2015 Bonds earned by certain corporations may be subject to a federal corporate alternative minimum tax. In addition, interest on the Series 2015 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
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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 2015 Bonds. Bond Counsel will express no opinion regarding those consequences.
Payments of interest on tax-exempt obligations, including the Series 2015 Bonds, are generally subject to IRS Form 1099-INT information reporting requirements. If a Series 2015 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 2015 Bonds ends with the issuance of the Series 2015 Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the County or the owners of the Series 2015 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 2015 Bonds, under current IRS procedures, the IRS will treat the County as the taxpayer and the beneficial owners of the Series 2015 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 2015 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 2015 Bonds.
Prospective purchasers of the Series 2015 Bonds upon their original issuance at prices other than the respective prices indicated on the inside cover of this Official Statement, and prospective purchasers of the Series 2015 Bonds at other than their original issuance, should consult their own tax advisers 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 2015 Bonds. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Series 2015 Bonds will not have an adverse effect on the tax status of interest or other income on the Series 2015 Bonds or the market value or marketability of the Series 2015 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 2015 Bonds from gross income for federal or state income tax purposes for all or certain taxpayers.
For example, recent presidential and legislative 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 2015 Bonds should be aware that any such future legislative actions (including federal income tax reform) may retroactively change the treatment of all or a portion of the interest on the Series 2015 Bonds for federal income tax purposes for all or certain taxpayers. In such event, the market value of the Series 2015 Bonds may be adversely affected and the ability of holders to sell their Series 2015 Bonds in the secondary market may be
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reduced. The Series 2015 Bonds are not subject to special mandatory redemption, and the interest rates on the Series 2015 Bonds are not subject to adjustment in the event of any such change.
Investors should consult their own financial and tax advisers to analyze the importance of these risks.
Original Issue Premium.
The Series 2015 Bonds (“Premium Bonds”) were 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 Premium Bonds should consult their own tax advisers as to the determination for federal income tax purposes of the amount of bond premium properly accruable or amortizable in any period with respect to the Premium Bonds and as to other federal tax consequences and the treatment of bond premium for purposes of state and local taxes on, or based on, income.
BOOK ENTRY SYSTEM
The information in this section concerning The Depository Trust Company ("DTC") and DTC's book entry system has been obtained from DTC and the County takes no responsibility for the completeness or accuracy thereof. The County cannot and does not give any assurances that DTC, Direct Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal, or premium, if any, with respect to the Series 2015 Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Series 2015 Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its partnership nominee, as the registered owner of the Series 2015 Bonds, or that they will so do on a timely basis or that DTC, Direct Participants or Indirect Participants will act in the manner described in this Official Statement. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC.
DTC will act as securities depository for the Series 2015 Bonds. The Series 2015 Bonds will be issued as fully-registered bonds registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Series 2015 Bond certificate will be issued for each issue of the Series 2015 Bonds, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million
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of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.
DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million 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 rating of AA+ from Standard & Poor's. The DTC rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.
Purchases of Series 2015 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2015 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2015 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2015 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2015 Bonds, except in the event that use of the book entry system for the Series 2015 Bonds is discontinued.
To facilitate subsequent transfers, all Series 2015 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2015 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2015 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2015 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2015 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2015 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Series 2015
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Bonds. For example, Beneficial Owners of Series 2015 Bonds may wish to ascertain that the nominee holding the Series 2015 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Bond Registrar and request that copies of the notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Series 2015 Bonds within 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.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2015 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2015 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions and dividend payments on the Series 2015 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the County or the Bond Registrar, 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 Bond Registrar, or the County, 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 County or the Bond Registrar, 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.
REVISION OF BOOK ENTRY SYSTEM - REPLACEMENT BONDS
The Bond Legislation provides for issuance of fully registered Series 2015 Bonds (the "Replacement Bonds") directly to owners other than DTC or its nominee only if DTC determines not to continue to act as security depository of the Series 2015 Bonds. In such event, the County may in its discretion establish a securities depository/book entry relationship with another qualified securities depository. If the County does not or is unable to do so, and after appropriate notice to DTC, the County's Bond Registrar will authenticate and deliver fully registered Replacement Bonds, in the denominations of $5,000 or any multiple thereof, to or at the direction of and, if the event is not the result of County action or inaction, at the expense (including printing costs) of, any persons requesting such issuance. Replacement Bonds may be transferred, registered and assigned only in the registration books of the County's Bond Registrar.
TRANSCRIPT AND CLOSING DOCUMENTS
A complete transcript of proceedings for the Series 2015 Bonds, including an appropriate no-litigation certificate (described above under "LITIGATION"), will be delivered by the County when the Series 2015 Bonds are delivered by the County to the Underwriter. The County will at that time also provide to the Underwriter certificates of the County Fiscal Officer and Director of Law of the County, in the form attached hereto as APPENDIX F, addressed to the Underwriter relating to the accuracy and completeness of this Official Statement.
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CONTINUING DISCLOSURE
The County has agreed for the benefit of the holders and beneficial owners of the Series 2015 Bonds to provide annual financial information and notices of certain events under Rule 15c2-12 (the "Rule") promulgated by the Securities and Exchange Commission. Concurrently with the delivery of the Series 2015 Bonds, the County will deliver a certificate of the County Fiscal Officer of the County, in the form attached hereto as APPENDIX G, describing the nature of the information to be provided, the persons and entities to whom such information will be provided and the times at which such information will be provided (the "Continuing Disclosure Certificate"). The County's failure to comply with any undertaking contained in such certificate will not constitute an event of default under the Series 2015 Bonds.
In connection with its prior issuance of obligations, the County entered into agreements to provide certain annual financial information and operating data, audited financial statements and notice of the occurrence of certain events for purposes of the Rule. In the past five years, the County failed to comply with those agreements in 2012 with respect to information regarding Fiscal Year 2011. In 2012, the County failed to timely file the information because certain agreements required the inclusion of the County's audited and unaudited basic financial statements to be filed by the 270th day of 2012, and those financial statements were not completed by that date. The County’s Annual Information Statements filed in the years 2008 to 2011 did not include audited or unaudited financial statements. The County’s 2012 audited financial statements were released by the State Auditor and posted on the State Auditor’s website on February 11, 2014. The County filed these financial statements with the Electronic Municipal Market Access system of the MSRB on May 20, 2014.
It has come to the attention of the County that CUSIP numbers for certain of the County's outstanding bonds, as well as the Development Revenue Bonds, Series 2013 (Administrative Headquarters Project) (Cuyahoga County, Ohio, Lessee) issued by the Cleveland-Cuyahoga County Port Authority for which the County is an "obligated person" within the meaning of the Rule, were not associated with all of the County's prior continuing disclosure filings. The County has rectified the omission (of the association of CUSIP numbers) with its filings for the past five years.
The County’s Annual Information Statement for 2014 was timely filed with the MSRB’s EMMA system using the six-digit CUSIP number for all issues other than the County’s Certificates of Participation, Series 2014 (Convention Center Hotel Project), CUSIP No. 23225P. The Annual Information Statement for 2014 was filed using CUSIP No. 23225P on October 5, 2015, five business days after the due date.
The Disclosure Certificate is being executed by the County to assist the Underwriter in complying with Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission. Specifically, the County agrees to provide the Annual Report to the Municipal Securities Rulemaking Board (the "MSRB") in an electronic format, if required, and to provide notice of the enumerated events to the MSRB in an electronic format, if required.
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CONCLUDING STATEMENT
To the extent that any statements made in this Official Statement involve matters of opinion or estimates, whether or not expressly stated to be such, they are made as such and not as representations of fact or certainty, and no representation is made that any of such statements will be realized. Information herein has been derived by the County from official and other sources and is believed by the County to be reliable, but information other than that obtained from official records of the County has not been independently confirmed or verified by the County and its accuracy is not guaranteed.
Neither this Official Statement nor any statement which may have been made orally or in writing is to be construed as or as part of a contract with the original purchasers or holders of the Series 2015 Bonds.
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This Official Statement has been duly prepared and delivered by the County by direction of the Council.
COUNTY OF CUYAHOGA, OHIO
By: /s/ Armond Budish Armond Budish, County Executive
By: /s/ Dennis G. Kennedy Dennis G. Kennedy, Fiscal Officer
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APPENDIX A SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE AND SUPPLEMENTAL INDENTURE NO. 1
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
The following is a summary of certain provisions of the Trust Indenture and Supplemental Indenture No. 1. This summary does not purport to be complete. Reference is made to the complete text of those documents, copies of which are available at the corporate trust office of the Trustee.
Definition of Certain Terms
When used in the Official Statement and in the Appendices thereto, the following terms have the meanings set forth below. Additional terms used herein are more fully defined in the Trust Indenture and Supplemental Indenture No. 1, copies of which are available from the Underwriter upon request.
"Act" means Chapter 133 and Section 307.673 of the Ohio Revised Code, as enacted or amended from time to time.
"Additional Bonds" means any Bonds issued on a parity with the Series 2015 Bonds upon the terms and conditions set forth in Article II of the Indenture.
“Additional Bonds Test” means the condition for the issuance of Additional Bonds set forth in Article II of the Indenture.
"Bond Fund" means the Bond Fund created by Article V of the Indenture, including the Interest Payment Account, the Principal Payment Account, the Cost of Issuance Account, the Capitalized Interest Account, the Redemption Account and the Defeasance Account therein, and any other accounts or subaccounts created thereon by a Supplemental Indenture.
"Bond Legislation" means when used with reference to the Bonds, any resolution or ordinance adopted by the Legislative Authority providing for the issuance of the Bonds, including without limitation, any Certificate of Award that is required to be executed prior to the issuance of the Bonds by the Bond Legislation, all as amended or supplemented from time to time.
"Bond Reserve Requirement" means the amount, if any, required to be on deposit in the Bond Reserve Fund with respect to a Series of Bonds, and, as to the Series 2015 Bonds, the maximum Bond Service Charges on the Series 2015 Bonds in any Fiscal Year.
“Bond Reserve Fund” means the Bond Reserve Fund created by Article V of the Indenture and any accounts or subaccounts created therein by a Supplemental Indenture.
"Bond Service Charges" means for any applicable time period or date, including an Interest Payment Date, the principal (including any Mandatory Sinking Fund Requirements), interest, and redemption premium, if any, required to be paid by the Issuer on the Bonds pursuant to the Indenture. In determining Bond Service Charges accruing for any period or due and
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payable on any date, Mandatory Sinking Fund Requirements accruing for that period or due on that date shall be included and principal maturities for which, and to the extent, Mandatory Sinking Fund Requirements were imposed in a prior period or for a prior date shall be excluded.
"Bonds" means the Issuer's Series 2015 Bonds and any Additional Bonds or Series of Bonds authorized by legislation adopted by the Issuer and issued pursuant to the Indenture.
"Book entry form" or "book entry system" means, with respect to the Bonds, a form or system, as applicable, under which (i) the Beneficial Ownership Interests may be transferred only through a book entry and (ii) physical Bond certificates in fully registered form are registered only in the name of a Depository or its nominee as Bondholder, with the physical Bond certificates "immobilized" in the custody of the Depository. The book entry system, maintained by and the responsibility of the Depository and not maintained by or the responsibility of the Issuer or the Trustee, is the record that identifies, and records the transfer of the interests of, the owners of book entry interests in the Bonds.
"Business Day" means any day of the year other than (i) a Saturday or a Sunday, (ii) a day on which the Trustee is required or is authorized to close or is not prohibited from closing, by law (including without limitation, executive orders) and is closed, (iii) any day on which the Federal Reserve Bank of Cleveland is closed, or (iv) a day on which the Depository is closed.
"Capitalized Interest Account" means the Capitalized Interest Account in the Bond Fund created by Article V of the Indenture. "Certificate of Award" means a Certificate of Award executed by any Authorized Official or the Fiscal Officer, pursuant to the Bond Legislation, setting forth and determining those terms and other matters pertaining to a series of Bonds and their issuance, sale and delivery as the Bond Legislation authorizing their issuance provides may or shall be set forth or determined therein.
"Clerk" means the Clerk of the Legislative Authority.
"Costs of Issuance Account" means the Costs of Issuance Account in the Revenue Fund created by Article V of the Indenture.
"Council" means the County Council, the Legislative Authority of the Issuer.
"Counsel" means an attorney duly admitted to practice law before the highest court of any state and, without limitation, may include independent or in-house legal counsel for the County or the Trustee.
"County" means the County of Cuyahoga, Ohio.
“County Excise Tax” means the excise taxes on spirituous liquor, beer, wine and other beverages and cigarettes sold in the County, the question of the continuing levy of which for 20 years beginning August 1, 2015, for the purpose of paying the cost of constructing, renovating, improving or repairing sports facilities and reimbursing the County for costs incurred by the County in the construction of sports facilities, the Council, pursuant to the County Excise Tax Resolution,
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caused to be submitted to the electors of the County at the special election on May 6, 2014, at which special election that ballot measure received a majority affirmative vote of the electors of the County, with the consequence that the taxes thereby levied went into effect beginning August 1, 2015.
“County Excise Tax Resolution” means Resolution No. R2014-0002, adopted by the Council on January 28, 2014.
“County Excise Tax Receipts” means the monies received by the County from the County Excise Tax.
"Credit Facility" means a letter of credit and may include a confirming letter of credit or similar credit facility issued by a Credit Facility Provider which, by its terms, shall secure the payment of the principal of and interest on the Bonds when due and the Tender Price of tendered Eligible Bonds, to the extent such Tender Price is not paid from proceeds of remarketing such tendered Eligible Bonds, delivered to the Trustee.
"Depository" means any securities depository that is a clearing agency under federal law operating and maintaining, with its participants or otherwise, a book entry system to record ownership of book entry interests in Bonds, and to effect transfers of book entry interests in Bonds in book entry form, and includes and means initially The Depository Trust Company (a limited purpose trust company), New York, New York.
"Eligible Investments" means, to the extent permitted by law:
(a) U.S. Treasury Bills, notes, and bonds.
(b) Various federal agency securities including issues of the Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corp. (FHLMC), Federal Home Loan Bank (FHLB), Federal Farm Credit Bank (FFCB), Student Loan Marketing Association (SLMA), Government National Mortgage Association (GNMA), and other agencies or instrumentalities of the United States. Eligible Investment include securities that may be "called" (by the issuer) prior to the final maturity date. Any Eligible Investment may be purchased at a premium or a discount (all federal agency securities shall be direct issuances of federal government agencies or instrumentalities).
(c) Commercial paper issues of companies incorporated under the laws of the United States or any state, provided that such companies are rated "A" or better by at least one Rating Agency.
(d) Bankers acceptances issued by any bank domiciled in the State of Ohio or bankers acceptances issued by any domestic bank rated in the highest category by at least one Rating Agency.
(e) Money market mutual funds, investing exclusively in the same types of eligible securities as defined above, including any such money market funds affiliated with the Trustee.
(f) Repurchase agreements.
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(g) Federal funds.
(h) Certificates of deposit up to a maximum of $100,000 per issuer.
(i) Corporate notes or bonds rated, at the time of purchase, "A" or better by any Rating Agency.
In determining whether the rating assigned by Moody's or S&P to an investment complies with the rating categories provided in this definition, the rating category shall be determined without regard to any numerical or plus or minus modifier, unless otherwise expressly provided in this definition. The Trustee shall have no responsibility to monitor the ratings of Eligible Investments after the initial purchase of such Eligible Investments, including at the time of reinvestment of earnings thereof.
"Event of Default" means any of the events described in Article VII of the Indenture.
“Facilities Improvement Fund” means the Facilities Improvement Fund created by Article V of the Indenture.
"Favorable Opinion of Bond Counsel" means an unqualified Opinion of Bond Counsel to the effect that the action proposed to be taken (or failure to take such action) is permitted under the Indenture and will not, in and of itself, adversely affect the validity or enforceability of the Bonds and interest on the Series 2015 Bonds to remain excluded from gross income.
"Fiscal Officer" means the Fiscal Officer of the Issuer, including any acting or interim fiscal officer of the Issuer or any person acting on behalf of the Fiscal Officer by written authorization signed by the Fiscal Officer.
"Fiscal Year" means the twelve month period ending December 31 of each year.
"Flow of Funds" means the Flow of Funds Memorandum delivered to the Issuer and the Trustee at the time and issuance and delivery of the Series 2015 Bonds, as the same may be amended or supplemented in accordance with its terms, as approved by the Issuer.
"Funds" means any of the funds created by or referred to in Article V of the Indenture.
"Holder" means the Person in whose name a Bond is registered on the Bond Register.
“Indebtedness” means Bonds and any Subordinated Indebtedness.
"Indenture" means the means the Trust Indenture as amended and supplemented by Supplemental Indenture No. 1, and as the same may be amended or supplemented by any other Supplemental Indentures entered into in accordance with the Indenture as previously amended and supplemented.
"Interest Payment Account" means the Interest Payment Account in the Bond Fund created by Article V of the Indenture.
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"Interest Payment Date" means (as) as to the Series 2015 Bonds, means the first day of each June and December, and (b) as to any other Series of Bonds, means any date on which interest is to be paid on the Bonds, or any date defined as an Interest Payment Date in a Supplemental Indenture.
"Issuer" or “County” means the County of Cuyahoga, Ohio, a county and political subdivision in and of the State.
"Legal Officer" means the Director of Law.
"Liquidity Facility" means a standby bond purchase agreement, letter or line of credit or similar liquidity facility issued by a Liquidity Facility Provider which, by its terms, provides for the payment of the Tender Price of Bonds tendered and not remarketed, furnished by the Issuer to the Tender Agent, including any Substitute Liquidity Facility, which Liquidity Facility and all agreements relating to the obligation to reimburse the Liquidity Facility Provider for draws thereunder, if any, shall be approved by the Issuer.
"Mandatory Redemption Dates" means the dates specified in the Certificate of Award on which the Bonds are to be redeemed.
"Mandatory Sinking Fund Requirements" means the amounts required by the Certificate of Award or applicable Supplemental Indenture to be deposited in the Bond Fund and credited to the Principal Payment Account in any year for the purpose of retiring principal amounts of Bonds which would have been due and payable, except for such prior mandatory redemption requirements or retirement as provided in the Certificate of Award or applicable Supplemental Indenture, in any subsequent year.
"Maximum Rate" means twenty-five percent (25%) per annum or, with respect to any Bonds in a Fixed Rate Period, the maximum rate set forth in the applicable Bond Legislation.
"Opinion of Bond Counsel" means an Opinion of Counsel, which shall be Bond Counsel, containing the opinion specifically required by the provisions of the Indenture.
"Opinion of Counsel" means a written opinion of independent Counsel who is not objected to by the Issuer, in form and substance not objected to by the Issuer, the Credit Facility Provider, if any (but only if the Credit Facility Provider is an addressee of such opinion pursuant to the Reimbursement Agreement or the Indenture) or the Liquidity Facility Provider, if any (but only if the Liquidity Facility Provider is an addressee of such opinion pursuant to the Liquidity Facility or the Indenture).
"Original Purchaser" means, as to any series of Bonds, the Person designated as the Original Purchaser in the applicable Bond Legislation, Certificate or Award or Supplemental Indenture.
"Outstanding Bonds," "Bonds outstanding" or "outstanding" as applied to the Bonds mean, as of the applicable time, all Bonds which have been authenticated and delivered, or which are being delivered, by the Trustee under the Indenture, except:
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(a) Bonds canceled upon surrender, exchange or transfer, or canceled because of payment or redemption at or prior to that time;
(b) Bonds, or the portion thereof, for the payment, redemption or purchase for cancellation of which sufficient monies have been irrevocably deposited with the Trustee or any Paying Agents on or prior to that time for that purpose (whether upon or prior to the maturity or redemption date of those Bonds); provided, that if any of those Bonds are to be redeemed prior to their maturity, either notice of that redemption shall have been given, irrevocable arrangements satisfactory to the Trustee shall have been made for giving notice of that redemption, or waiver by the affected Holders of that notice, satisfactory in form to the Trustee, shall have been filed with the Trustee;
(c) Bonds, or the portion thereof, which are deemed to have been paid and discharged or caused to have been paid and discharged pursuant to the provisions of the Indenture;
(d) Bonds in lieu of which others have been authenticated under the Indenture, other than with respect to lost or wrongfully taken Bonds; and
(e) Bonds deemed tendered pursuant to any Supplemental Indenture.
"Paying Agent" means, as to Bonds and the Trustee, any commercial bank with trust powers or trust companies designated as paying agencies or places of payment for Bonds by or pursuant to the applicable Bond Legislation, and their successors designated pursuant to the Indenture.
"Person" or words importing persons means firms, associations, partnerships, joint ventures, societies, estates, trusts, corporations, public or governmental bodies, other legal entities and natural persons.
“Pledged Funds” means the Bond Fund, the Bond Reserve Fund and any other funds established under the Indenture and pledged as security for the Bonds.
“Pledged Revenues” means (a) the County Excise Tax Receipts, and (b) all monies in the Pledged Funds and all income and profit from the investment of those monies.
"Principal Payment Date" means, (a) as to the Series 2015 Bonds, means the first day of each December commencing December 1, 2016, and (b) as to any other Series of Bonds, the date specified in the Bond Legislation or Supplemental Indenture pertaining to such Bonds.
"Principal Payment Account" means the Principal Payment Account established in Article V of the Indenture.
"Registrar" means, as to the Bonds, the Trustee, until a successor Registrar shall have been named pursuant hereto provided that the Registrar shall be a transfer agent registered in accordance with Section 17A(c) of the Securities Exchange Act of 1934, as amended.
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"Revenue Fund" means the Revenue Fund created by Article V of the Indenture, including the Cost of Issuance Account.
"Series 2015 Bonds" means the Issuer’s $60,485,000 Excise Tax Revenue Bonds, Series 2015, dated December 22, 2015 and issued pursuant to this Indenture and Supplemental Indenture No. 1.
“Series 2015 Interest Payment Subaccount” means the Series 2015 Interest Payment Subaccount in the Interest Payment Account of the Bond Fund created by Article V of Supplemental Indenture No. 1.
“Series 2015 Principal Payment Subaccount” means the Series 2015 Principal Payment Subaccount in the Principal Payment Account of the Bond Fund created by Article V of Supplemental Indenture No. 1.
“Series 2015 Project” means the Project as defined in the Bond Legislation.
“Series 2015 Project Fund” means the Series 2015 Fund created by Article V of Supplemental Indenture No. 1.
“Series 2015 Rebate Account” means the Series 2015 Rebate Account in the Rebate Fund created by Article V of Supplemental Indenture No. 1.
“Series 2015 Redemption Subaccount” means the Series 2015 Redemption Subaccount in the Redemption Account of the Bond Fund created by Article V of Supplemental Indenture No. 1.
“Series 2015 Reserve Account” means the Series 2015 Reserve Account in the Bond Reserve Fund created by Article V of Supplemental Indenture No. 1.
"Special Record Date" means, with respect to any Bond, the date established by the Trustee in connection with the payment of overdue interest on that Bond pursuant to the Indenture.
"State" means the State of Ohio.
“Subordinated Indebtedness” any obligation or evidence of indebtedness issued or incurred by the Issuer in accordance with Article II of the Indenture, the debt service charges on which are payable and secured on a basis subordinate to the Bond Service Charges and to any obligation of the Issuer under the Indenture to make any required deposit to the Bond Reserve Fund.
"Supplemental Indenture" means any indenture supplemental to the Indenture entered into between the Issuer and the Trustee in accordance with Article X of the Indenture.
"Supplemental Indenture No. 1" means Supplemental Trust Indenture No. 1, dated as of December 1, 2015, by and between the Issuer and the Trustee and relating to the issuance of the Series 2015 Bonds and any amendment or supplement thereto.
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"Trustee" means the Trustee under the Indenture, initially, U.S. Bank National Association, and any successor Trustee as determined or designated hereunder or pursuant to the Indenture.
"Trust Indenture" means the Trust Indenture dated as of December 1, 2014 by and between the Issuer and the Trustee.
Indenture
The following, in addition to information contained above under the heading "THE SERIES 2015 BONDS" and "SECURITY AND SOURCES OF PAYMENTS," summarizes certain provisions of the Indenture to which document reference is made for the detailed provisions thereof.
So long as the Series 2015 Bonds are immobilized in a Book-Entry System with a Depository, that Depository or its nominee is for all purposes of the Indenture considered by the Issuer and the Trustee to be the Holder of those Series 2015 Bonds, and the Book Entry Interest Owners of the Series 2015 Bonds will not be considered the Holders of the Series 2015 Bonds and will have no right as Holders under the Indenture. See "THE SERIES 2015 BONDS - Registration, Payment and Transfer" and "BOOK-ENTRY ONLY SYSTEM."
Security
The Indenture provides for a pledge of the Pledged Revenues and the amounts deposited in the Pledged Funds, and shall be secured only by the Indenture granting a lien upon the Pledged Revenues and such amounts in the Pledged Funds, to the Trustee for the benefit of the Holders of the Series 2015 Bonds. See "SECURITY AND SOURCES OF PAYMENTS."
Funds and Accounts
The Indenture establishes the following funds and accounts to be held by the Trustee and used for specific purposes thereunder:
(1) the Revenue Fund, and the Costs of Issuance Account therein;
(2) the Bond Fund, and the Interest Payment Account, the Principal Payment Account, the Redemption Account, the Capitalized Interest Account, and the Defeasance Account therein;
(3) the Bond Reserve Fund;
(4) the Facilities Improvement Fund; and
(5) the Rebate Fund.
Supplemental Indenture No. 1 establishes the following accounts and subaccounts for the Series 2015 Bonds to be held by the Trustee and used for specific purposes thereunder:
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(1) in the Interest Payment Account of the Bond Fund: the Series 2015 Interest Payment Subaccount;
(2) in the Principal Payment Account of the Bond Fund: the Series 2015 Principal Payment Subaccount;
(3) in the Redemption Account of the Bond Fund: the Series 2015 Redemption Subaccount;
(4) in the Bond Reserve Fund, the Series 2015 Reserve Account;
(5) in the Cost of Issuance Account of the Revenue Fund: the Series 2015 Cost of Issuance Subaccount;
(6) in the Rebate Fund: the Series 2015 Rebate Account; and
(7) the Series 2015 Project Fund.
Allocation of the Proceeds of the Bonds and Initial Deposit of County Excise Tax Receipts
The proceeds of sale of the Series 2015 Bonds shall be allocated and deposited by the Trustee as follows: (i) to the Series 2015 Cost of Issuance Subaccount, the amount of $248,741.00 to be used to pay certain costs of issuance of the Series 2015 Bonds, (ii) to the Series 2015 Capitalized Interest Subaccount, the amount of $2,693,141.40 to pay capitalized interest on the Series 2015 Bonds, (iii) to the Series 2015 Reserve Account, $6,048,500 to fund a portion of the Bond Reserve Requirement, and (iv) the balance, to the Series 2015 Project Fund to pay the costs of the Series 2015 Project in accordance with Supplemental Indenture No. 1.
Upon the Issuer's issuance and delivery of the Series 2015 Bonds and after the deposit of any proceeds thereof in the Bond Fund or the Bond Reserve Fund pursuant to Supplemental Indenture No. 1 and as described above, all County Excise Receipts previously received and then in the custody of the Issuer or the Trustee shall be deemed received by the Trustee and applied and deposited as follows: (i) first, to the Bond Reserve Fund, any amount required to cause the balance therein to equal the Bond Reserve Requirement; (ii) second, to the Interest Payment Account, any amount required to cause the balance in that Account to suffice to pay interest on the Bonds due on the next two succeeding Interest Payment Dates; and (iii) third, to the Facilities Improvement Fund, any balance; and the Issuer and the Trustee shall take all actions required to effect such application and deposit.
Revenue Fund
The Issuer covenants that it shall, irrevocably, at all times direct the Tax Commissioner of the State or other appropriate official of the State to convey the County Excise Tax Receipts by electronic funds transfer directly to the Revenue Fund, commencing upon the issuance of the Series 2015 Bonds. Notwithstanding any other ordinance, resolution or action to the contrary, all of the County Excise Tax Receipts received by or on behalf of the Issuer from and after the date of delivery of the Series 2015 Bonds to the Original Purchaser shall be deposited into the Revenue Fund immediately upon receipt pursuant to the procedures described in this paragraph.
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So long as any Bonds are outstanding, the County Excise Tax Receipts shall be appropriated for the purposes set forth in the Indenture, and the Issuer shall take whatever action is required to make, affirm or ratify such appropriation.
Unless otherwise provided in a Supplemental Indenture, promptly upon receipt thereof, the Trustee shall deposit County Excise Tax Receipts and all other monies received by the Trustee under and pursuant to the provisions of this Indenture to be paid into the Funds and Accounts as follows:
FIRST: All the County Excise Tax Receipts and all such other monies shall be deposited in the Interest Payment Account, until the balance in that Account (after all monies in the Capitalized Interest Account of the Bond Fund related to a particular series of Bonds have been transferred to the Interest Payment Account for payment of that Series of Bonds) suffices to pay interest on the Bonds due on the next two succeeding Interest Payment Dates;
SECOND: After the deposits in the Interest Payment Account described in paragraph FIRST above, all the County Excise Tax Receipts and all such other monies shall be deposited in the Principal Payment Account until the balance in that Account suffices to pay the principal amount due at maturity or upon Mandatory Sinking Fund Redemption of the Bonds on the next succeeding Principal Payment Date;
THIRD: After the deposits described in paragraphs FIRST and SECOND above, all the County Excise Tax Receipts and all such other monies shall be deposited in the Bond Reserve Fund until the balance in the Bond Reserve Fund equals the Bond Reserve Requirement, if any, for each series of Bonds outstanding;
FOURTH: After the deposits described in Paragraphs FIRST, SECOND and THIRD above, all the County Excise Tax Receipts and all such other monies shall be applied to the payment of the Trustee’s fees and expenses for Ordinary Services and Extraordinary Services then due and payable; and
FIFTH: After the deposits and payments described in Paragraphs FIRST, SECOND, THIRD and FOURTH above, all the County Excise Tax Receipts, including any County Excise Tax Receipts then remaining on deposit in the Revenue Fund, and all such other monies shall be deposited in the Facilities Improvement Fund and disbursed in accordance with Article V of the Indenture for any lawful purpose for which County Excise Tax Receipts may be expended.
If, five (5) Business Days prior to any Interest Payment Date or Principal Payment Date, the amount on deposit in the Interest Payment Account of the Bond Fund or the Principal Payment Account of the Bond Fund, as applicable, is not sufficient to pay the interest on or principal of (at maturity or by Mandatory Sinking Fund Redemption) any Bonds due on that date, the Trustee shall transfer from the Bond Reserve Fund to the Interest Payment Account and the Principal Payment Account, in that order, the amounts needed to cure or reduce as fully as possible such insufficiency.
Upon the written request of the Issuer in accordance with the Flow of Funds Memorandum delivered to the Trustee on the Closing Date, the Trustee shall make disbursements from the Costs of Issuance Fund to pay the fees and expenses incurred in
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connection with the issuance of the Bonds, including without limitation the Trustee’s Fee. The money and Eligible Investments held to the credit of the Costs of Issuance Fund shall not constitute part of the Pledged Revenues. On the earlier of (a) six months from the date of the Series 2015 Bonds, or (b) the date when all fees, charges and expenses relating to the issuance of the Series 2015 Bonds have been paid or provision for their payment has been made, as certified to the Trustee by the Issuer, the Trustee shall transfer any balance remaining in the Series 2015 Account of the Costs of Issuance Fund to the Revenue Fund and shall close the Series 2015 Account of the Cost of Issuance Fund.
Bond Fund
The Bond Fund and accounts therein and the monies and investments therein shall be used solely and exclusively for the payment of Bond Service Charges and the purchase price of Bonds as they become due at stated maturity, by redemption or pursuant to any Mandatory Sinking Fund Requirements, or otherwise all as provided in this Indenture; provided, that no part thereof (other than monies in the Defeasance Account or the Redemption Account) shall be used to redeem any Bonds prior to maturity, except as may be provided otherwise in this Indenture. Amounts in the Interest Payment Account and the Principal Payment Account shall be used to pay principal of and interest on the Bonds, respectively, as such principal and interest become due. All amounts deposited in the Capitalized Interest Account shall be transferred to the Interest Payment Account to make payment of interest on the applicable Bonds as such interest becomes due and payable. All amounts deposited to pay premiums on the Bonds shall be deposited directly into the Redemption Account, which account shall hold no other monies. All amounts deposited to pay and discharge the Bonds pursuant to Article IX of the Indenture, including amounts necessary to pay any redemption premium, shall be deposited directly into the Defeasance Account, which account shall hold no other monies. The Issuer shall have no right or interest in the Redemption Account, the Defeasance Account, any special account or subaccount so restricted by the applicable Supplemental Indenture or the monies and Eligible Investments therein, all of which shall be held in trust by the Trustee for the sole benefit of the Holders.
The Trustee shall establish separate subaccounts within the Redemption Account and the Defeasance Account for each deposit (including any investment income thereon) made into such account of the Bond Fund so that the Trustee may at all times ascertain the date and source of deposit of the funds in such accounts.
The Trustee shall transmit to any Paying Agents, as appropriate, from monies in the Bond Fund applicable thereto, amounts sufficient to make timely payments of principal of and any premium on the Bonds to be made by those Paying Agents and then due and payable. To the extent that the amount needed by any Paying Agent is not sufficiently predictable, the Trustee may make any credit arrangements with that Paying Agent which will permit those payments to be made. The Issuer authorizes and directs the Trustee to cause withdrawal of monies from the Bond Fund which are available for the purpose of paying, and are sufficient to pay, the principal of and any premium on the Bonds as they become due and payable (whether at stated maturity, by redemption or pursuant to any Mandatory Sinking Fund Requirements), for the purposes of paying or transferring monies to the Paying Agents which are necessary to pay such principal and premium.
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Bond Reserve Fund
If and to the extent provided for in any Supplemental Indenture, a Bond Reserve Fund, with an appropriate designation, shall be created as a special account applicable to the Bonds to which that Supplemental Indenture applies. The Bond Reserve Fund shall, as provided in the Supplemental Indenture, be established in the custody of the Trustee. A Bond Reserve Fund is a Pledged Fund and a trust fund and is pledged to and shall be used, as provided in the Indenture and the applicable Supplemental Indenture, solely for the payment of Bond Service Charges on the Bonds to which that Bond Reserve Fund pertains.
In the case of Bonds to which a Bond Reserve Fund pertains, if by 9:00 a.m. (Cleveland, Ohio time) of the day upon which Bond Service Charges on those Bonds is due, the amount in the Principal Payment Account or the Interest Payment Account (after taking into account any transfers from the Capitalized Interest Account) is insufficient to pay the Bond Service Charges to be paid therefrom on that date, the Trustee, after complying with the provisions of Article V of the Indenture related to the Rebate Fund and without necessity for any further order of the Issuer, shall immediately transfer to the Paying Agents for those Bonds from the Bond Reserve Fund, an amount sufficient to make up that insufficiency in the Principal Payment Account or the Interest Payment Account, if applicable, allocable to those Bonds.
Subject to the foregoing, and if all Bond Service Charges due on the Bonds secured by such Bond Reserve Fund have been paid, any amount in a Bond Reserve Fund in excess of the Bond Reserve Requirement may be transferred to the credit of (1) another account in the Bond Reserve Fund, the Redemption Account or the Defeasance Account for the purposes of those Accounts or (2) the Principal Payment Account or the Interest Payment Account for the payment of Bond Service Charges on other Bonds as such Bond Service Charges shall become due and payable; if not needed for either such purpose, such excess shall be transferred to the Facilities Improvement Fund for any lawful purpose on which County Excise Tax Receipts may be expended. That excess amount shall be determined by calculating the Bond Reserve Requirement with reference to the applicable Outstanding Bonds only, which Outstanding Bonds shall exclude any Outstanding Bonds for the payment, redemption or purchase of which that excess amount is being transferred to the credit of the Principal Payment Account or the Interest Payment Account, Redemption Account or Defeasance Account.
Supplemental Indenture No.1 establishes the Series 2015 Reserve Account in the Bond Reserve Fund for the Series 2015 Bonds and requires that monies in the Series 2015 Reserve Account shall be used to effect transfers to the Bond Fund at the times and in the amounts required by Article V of the Indenture.
Rebate Fund
Any provision of the Indenture to the contrary notwithstanding, amounts credited to the Rebate Fund shall be free and clear of any lien under the Indenture. A separate account shall be created in the Rebate Fund for each series of the Bonds and, to the extent required by the Code, any calculations and payments described below shall be made as to each series of Bonds. Monies and investments in the Rebate Fund are not Pledged Revenues and shall be invested
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pursuant to the procedures and in the manner provided for investment of monies in the Pledged Funds.
For the Bonds constituting a separate tax-exempt issue for purposes of the Code, within thirty (30) days after the end of every fifth Bond Year and within thirty (30) days after the payment in full of all outstanding Bonds, the Issuer shall calculate or cause to be calculated the Rebate Amount as of the end of that Bond Year or the date of such payment in full and shall provide copies of such calculation to the Trustee. Upon the occurrence of an Event of Default and at the request of the Trustee, the Issuer shall calculate or cause to be calculated the Rebate Amount as of the date requested by the Trustee and provide such calculation to the Trustee on or before the date so requested. In either event, the Trustee shall notify the Issuer in writing of the amount then on deposit in the applicable account in the Rebate Fund. If the amount then on deposit in the applicable account in the Rebate Fund is in excess of the Rebate Amount (less the Rebate Amounts, if any, previously paid to the United States as described in this paragraph), the Trustee shall forthwith pay that excess amount to the Issuer. If the amount then on deposit in the applicable account in the Rebate Fund is less than the Rebate Amount (less the Rebate Amounts, if any, previously paid to the United States as described in this paragraph), the Issuer shall, within five (5) days after receipt of the aforesaid notice from the Trustee, pay to the Trustee for deposit in the Rebate Fund an amount sufficient to cause the applicable account in the Rebate Fund to contain an amount equal to the Rebate Amount (less the Rebate Amounts, if any, previously paid to the United States as described in this paragraph). Within thirty-five (35) days after the end of the fifth Bond Year and every fifth Bond Year thereafter as to the Pledged Funds, upon the written direction of the Issuer, the Trustee, acting on behalf of the Issuer, shall pay to the United States in accordance with Section 148(f) of the Code from the monies then on deposit in the applicable account in the Rebate Fund an amount equal to ninety percent (90%) (or such greater percentage not in excess of one hundred percent (100%) as the Issuer may direct the Trustee to pay) of the Rebate Amount as of the end of such fifth Bond Year (less the Rebate Amounts, if any, previously paid to the United States as described in this paragraph). Within sixty (60) days after the payment in full of all outstanding Bonds, upon the written direction of the Issuer, the Trustee shall pay to the United States in accordance with Section 148 of the Code from the monies then on deposit in the applicable account in the Rebate Fund an amount equal to one hundred percent (100%) of the Rebate Amount as of the date of such payment (less the Rebate Amounts, if any, previously paid to the United States as described in this paragraph). Any monies remaining in the applicable account in the Rebate Fund following such payment shall be paid to the Issuer. All computations of Rebate Amounts, as described in this paragraph shall treat the amount or amounts, if any, previously paid to the United States as described in this paragraph as amounts on deposit in the Rebate Fund.
The Trustee shall be entitled to rely on the calculations made pursuant to the Indenture and shall not be responsible for any loss or damage resulting from any action taken or omitted to be taken in reliance upon those calculations.
The Trustee shall keep and make available to the Issuer such records concerning the investments of the gross proceeds of the Bonds and the investments of earnings from those investments as may be requested by the Issuer in order to enable the Issuer to make the aforesaid computations as are required under Section 148 of the Code.
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For purposes of the requirements described above:
“Bond Year” means the annual period provided for the computation of Excess Earnings under Section 148(f) of the Code.
“Excess Earnings” means an amount equal to the sum of (i) plus (ii) where:
(i) is the excess of
(a) the aggregate amount earned from the date of issuance of the applicable Bonds on all nonpurpose obligations in which gross proceeds of the applicable Bonds are invested (other than investments attributable to an excess described in this clause (i)), over
(b) the amount that would have been earned if such nonpurpose obligations (other than amounts attributable to an excess described in this clause (i)) were invested at a rate equal to the yield on the applicable Bonds; and
(ii) is any income attributable to the excess described in clause (i).
The sum of (i) plus (ii) shall be determined in accordance with Section 148 of the Code. As used herein, the terms “gross proceeds,” “nonpurpose obligations” and “yield” have the meanings assigned to them for purposes of Section 148 of the Code.
“Rebate Amount” as of any date means the rebate amount as of such date, or such other amount as may be due to the United States pursuant to Section 148(f) of the Code.
The procedures described above may be modified to the extent necessary to comply with relevant regulations, temporary regulations and proposed regulations under Section 148 of the Code, as determined in an Opinion of Bond Counsel delivered to the Trustee.
Facilities Improvement Fund
Prior to making any transfer from the Bond Reserve Fund pursuant to Article V and otherwise at any time at which the monies in the Bond Service Fund are insufficient for the payment of Bond Service Charges then due, the Trustee shall first transfer any balance in the Facilities Improvement Fund to the Interest Payment Account or the Principal Payment Account (in that order) to eliminate that insufficiency as fully as possible.
Subject to the requirements described in the preceding paragraph, the monies in the Facilities Improvement Fund may be used for any lawful purpose for which County Excise Tax Receipts may be expended: i.e., for the purpose of paying the cost of constructing, renovating, improving or repairing sports facilities and reimbursing the County for costs incurred by the County in the construction of sports facilities, as set forth in the County Excise Tax Resolution. The Trustee shall disburse monies from the Facilities Improvement Fund upon requisition of the County Executive or Fiscal Officer. Each such requisition shall certify: (i) the amount of the requisition; (ii) the purpose of the requisition; and (iii) the payee of the requisitioned monies. Each such requisition shall include the representation that: (A) the purpose of the requisition is a
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permitted purpose for County Excise Tax Receipts; and (B) prior to submitting the requisition, the County has obtained all required consents and approvals of any other party or person whose consent thereto or approval thereof is required by law or by any agreement to which the County is party. Subject to the requirements described above in this paragraph, the County and the Trustee may from time to time and without consent of Holders enter into Supplemental Indentures under Article VIII to create additional procedures or requirements for the disbursement of funds from the Facilities Improvement Fund or to modify or clarify such procedures and requirements.
Supplemental Trust Indentures
Without the consent of or notice to the Holders, but with the consent of any Person required by an applicable Supplement Indenture, the Issuer and the Trustee may enter into supplemental indentures as shall not be inconsistent with the terms and provisions of the Indenture, for any one or more of the following purposes: (i) to cure any ambiguity, inconsistency or formal defect or omission in the Indenture; (ii) to grant to or confer upon the Trustee for the benefit of the Holders any additional rights, remedies, powers or authority that lawfully may be granted to or conferred upon the Holders or the Trustee; (iii) to pledge or assign additional revenues and/or under the Indenture; (iv) to add to the covenants and agreements of the Issuer under the Indenture other covenants and agreements thereafter to be observed for the protection of the Holders, or to surrender or limit any right, power or authority reserved to or conferred upon the Issuer in the Indenture, including without limitation, the limitation of rights of redemption so that in certain instances Bonds of different series will be redeemed in some prescribed relationship to one another for the protection of the Holders of a particular series of Bonds; (v) to evidence any succession to the Issuer and the assumption by the successors of the covenants and agreements of the Issuer in the Bonds and the Indenture; (vi) to permit the use of a book entry system to identify the owner of an interest in a Bond issued by the Issuer under the Indenture, whether that obligation was formerly, or could be, evidenced by a physical security and to facilitate (a) the transfer of Bonds from one Depository to another, (b) the succession of Depositories or (c) the withdrawal of Bonds issued to a Depository for use in a book entry system and the issuance of replacement Bonds in fully registered form to others than a Depository; (vii) to permit the Trustee to comply with any obligations imposed upon it by law; (viii) to specify further the duties and responsibilities of, and to define further the relationship among, the Trustee, the Registrar and any Authenticating Agents or Paying Agents; (ix) to achieve compliance of the Indenture with any applicable federal securities or tax law; (x) to make amendments to the provisions hereof relating to arbitrage matters under Section 148 of the Code, if, in the Opinion of Bond Counsel, those amendments would not cause the interest on Bonds outstanding to become included in gross income of Holders for federal income tax purposes which amendments may, among other things, change the responsibility for making the relevant calculations; (xi) to permit any amendments required by any Rating Service in order to obtain a rating on the Bonds from such Rating Service; (xii) in connection with the issuance of Bonds, including provisions for Bonds in forms other than fully registered Bonds and for amendments of this Indenture relating to Bonds and the rights of the Holders of Bonds issued in those forms not inconsistent with the provisions of this Indenture applying to the rights of owners of fully registered Bonds and other Persons, if in the opinion of nationally recognized bond counsel those provisions would not result in the interest on any of the Bonds outstanding becoming subject to federal income taxation; (xiii) to permit any amendments related to credit
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enhancement, including but not limited to letters of credit and bond insurance, of the Bonds; (xiv) subject to Article V of the Indenture or to the applicable provision of any Supplemental Indenture regarding the disbursement of proceeds of Bonds from any fund or account established under Supplemental Indenture for such proceeds, to create additional procedures or requirements for the disbursement of funds from the Facilities Improvement Fund or such fund or account, or to modify or clarify such procedures and requirements; and (xv) to permit any other amendment that, in the judgment of the Trustee, is not to the prejudice of the Trustee or the Holders
In addition, with the consent of the Holders of not less than a majority in aggregate principal amount of the Bonds then outstanding, evidenced as provided in the Indenture and the prior written consent of any other Person specified by a Supplemental Indenture, the Issuer and the Trustee may sign and deliver Supplemental Indentures adding any provisions to, changing in any manner or eliminating any of the provisions of the Indenture or any Supplemental Indenture or restricting in any manner the rights of the Holders, provided that no Supplemental Indenture may be entered into which provides for:
(a) without the consent of the Holder of each Bond so affected, (i) an extension of the maturity of the principal of or the interest on any Bond; (ii) a reduction in the principal amount of any Bond or the rate of interest or premium thereon; (iii) the creation of a right in the Issuer to call any Bond for redemption prior to its maturity, or the advancement of the time or reduction of the redemption price at which any existing right of the Issuer to call Bonds for redemption may be exercised; (iv) a reduction in the amount or extension of the time of payment of any Mandatory Sinking Fund Redemption Requirements; (v) a decrease in any amounts to be paid, or extension of any time for payments under a Credit Facility or a Liquidity Facility or (vi) a change in the timing of the draws under a Credit Facility or a Liquidity Facility; or
(b) without the consent of the Holders of all Bonds then outstanding, (i) the creation of a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (ii) a reduction in the aggregate principal amount of the Bonds required for consent to a Supplemental Indenture.
Where the consent of the Holders is required, procedures are established in the Indenture for notice to the Holders and for execution and filing of the requisite consents. Any consent shall be binding upon the Holder of the Bond giving the consent and upon any subsequent Holder of that Bond and of any Bond issued in exchange therefor, unless such consent is revoked in writing prior to the signing and delivery by the Trustee of the Supplemental Indenture. If the Holders of the required percentage in aggregate principal amount of Bonds outstanding shall have consented to the Supplemental Indenture, as provided in the Indenture, no Holder shall have any right to object to the signing or delivery of the Supplemental Indenture, any of the terms and provisions contained therein, or the operation thereof, to question the propriety of the signing and delivery thereof, or to enjoin or restrain the Trustee or the Issuer from that signing or delivery or from taking any action pursuant to the Indenture.
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Events of Default and Remedies
Events of Default. The following events constitute Events of Default under the Indenture:
(a) Non-payment of any interest on any Bond when and as such interest becomes due and payable;
(b) Non-payment of the principal of or any premium on any Bond when and as such principal or premium shall become due and payable, whether at stated maturity, by redemption, pursuant to any Mandatory Sinking Fund Requirements, by acceleration or otherwise;
(c) Failure by the Issuer to observe or perform any other covenant, agreement or obligation on its part to be observed or performed contained in the Indenture or in the Bonds, which failure shall have continued for a period of sixty (60) days after written notice, by registered or certified mail, to the Issuer specifying the failure and requiring that it be remedied, which notice may be given by the Trustee in its discretion and shall be given by the Trustee at the written request of the Holders of not less than twenty-five percent (25%) in aggregate principal amount of Bonds then outstanding; or
(d) The Issuer shall: (i) commence a proceeding under any federal bankruptcy, insolvency, reorganization or similar law or (ii) have a receiver or trustee appointed for it or for the whole or any substantial part of its property.
Notwithstanding the foregoing, if, by reason of Force Majeure, the Issuer is unable to observe or perform any covenant, agreement or obligation that would give rise to an Event of Default under subsection (c) above, the Issuer shall not be deemed in default during the continuance of such inability. The Issuer, however, shall promptly give notice to the Trustee of the existence of an event of Force Majeure. The term "Force Majeure" shall mean, without limitation, the following: acts of God; winds; fires; epidemics; landslides; floods; droughts; famines; impacting space debris; strikes, lockouts or other industrial disturbances; acts or orders of any kind of any governmental authority prohibiting the Issuer from carrying on its business; new outbreak of hostilities directly involving the armed forces of the United States of America or other new national or international calamity or crises, other than such that represents the continuation, deterioration, or escalation or existing hostilities, calamities, or crises; sabotage; riots; civil disturbances; explosions; breakage or accident to transmission pipes or canals; partial or entire failure of utilities; or other similar cause or event not within the control of Issuer creating a material adverse impact on the Issuer's ability in whole or in part to carry out the agreements on Issuer's part herein contained. Issuer shall, however, use its best efforts to remedy with all reasonable dispatch the cause or causes preventing Issuer from carrying out its agreements, provided, that the Issuer shall not in any event be required to settle strikes, lockouts or other industrial disturbances by acceding to the demands of the opposing party or parties when such course is, in the judgment of the Issuer, not in the interest of the Issuer.
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The declaration of an Event of Default under the 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.
Rights and Remedies Upon Default. Except as otherwise provided in any Supplemental Indenture, upon the occurrence of any Event of Default as described in subsections (c) or (d) above, the Trustee shall, upon the written direction of the Holders of at least twenty-five percent (25%) in aggregate principal amount of Bonds then outstanding, declare by a notice in writing delivered to the Issuer, the principal of all Bonds then outstanding (if not then due and payable), together with interest accrued thereon, to be due and payable immediately. Upon the occurrence of an Event of Default as described in subsection (a) or (b) above or specified in a Supplemental Indenture, the Trustee shall declare, by a notice in writing delivered to the Issuer, the principal of all Bonds then outstanding (if not then due and payable), and the interest accrued thereon, to be due and payable immediately. Upon any declaration as described above, the principal and interest on all Bonds then outstanding shall become and be due and payable immediately. Interest on the Bonds shall accrue to the date determined by the Trustee for the tender of payment to the Holders pursuant to that declaration. Any such declaration shall be by notice in writing to the Issuer and any other Person specified by a Supplemental Indenture, and, upon said declaration, principal and interest on all Bonds shall become and be immediately due and payable. The Trustee immediately upon such declaration shall give notice in the same manner as provided with respect to redemption of the Bonds. Such notice shall specify the date on which payment of principal and interest shall be tendered to the Holders of the Bonds.
The provisions of the preceding paragraph are subject, however, to the condition that if, at any time after declaration of acceleration and prior to the entry of a judgment in a court for enforcement under the Indenture (after an opportunity for hearing by the Issuer), (i) all sums payable under the Indenture (except the principal of and interest on Bonds which have not reached their stated maturity dates but which 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 in respect of which the default shall have occurred, shall have been duly paid or provision shall have been duly made therefor by deposit with the Trustee or Paying Agents, and (ii) all existing Events of Default shall have been cured, then and in every case, the Trustee shall waive the Event of Default and its consequences and shall rescind and annul that declaration. No waiver or rescission and annulment shall extend to or affect any subsequent Event of Default or shall impair any rights consequent thereon.
Upon the occurrence and continuance of an Event of Default, the Trustee may, as an alternative or in addition to acceleration of the Bonds, pursue any available remedy to enforce the payment of Bond Service Charges or the observance and performance of any other covenant, agreement or obligation under the Indenture. If, upon the occurrence and continuance of an Event of Default, the Trustee is requested so to do by the Holders of at least twenty-five percent (25%) in aggregate principal amount of Bonds then outstanding, the Trustee subject to the provisions of the Indenture and to any direction by the Holders of a majority of the aggregate principal amount of the Bonds then outstanding as to the method and place of conducting proceedings to be taken in connection with the enforcement of the terms and conditions of the Indenture), shall exercise any rights and powers conferred by the Indenture.
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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 necessary or desirable. No waiver of any default or Event of Default under the Indenture, whether by the Trustee or by the Holders, shall extend to or shall affect any subsequent default or Event of Default or shall impair any remedy, right or power consequent thereon.
All rights of action (including without limitation, the right to file proof of claims) under the Indenture or under any of the Bonds may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or other proceeding relating thereto. Any suit or proceeding instituted by the Trustee shall be brought in its name as Trustee without the necessity of joining any Holders as plaintiffs or defendants. Any recovery of judgment shall be for the benefit of the Holders of the outstanding Bonds, subject to the provisions of the Indenture.
Rights and Remedies of Holders. A Holder shall not have any right to institute any suit, action or proceeding for the enforcement of the Indenture, for the execution of any trust thereof, or for the exercise of any other remedy under the Indenture, unless: (i) there has occurred and is continuing an Event of Default of which the Trustee has been notified or of which it is deemed to have notice under the Indenture; (ii) the Holders of at least twenty-five percent (25%) in aggregate principal amount of Bonds then outstanding shall 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 herein or to institute the suit, action or proceeding in its own name, and shall have offered indemnity to the Trustee as provided in the Indenture, and (iii) the Trustee, for sixty (60) days thereafter, shall have failed or refused to exercise the remedies, rights and powers granted herein or to institute the suit, action or proceeding in its own name. At the option of the Trustee, such notification (or notice), request, opportunity and offer of indemnity are conditions precedent in every case, to the institution of any suit, action or proceeding described above.
No one or more Holders of the Bonds shall have any right to affect, disturb or prejudice in any manner whatsoever the security or benefit of the Indenture by its or their action, or to enforce, except in the manner provided, any remedy, right or power under the Indenture. Any suit, action or proceedings shall be instituted, had and maintained for the benefit of the Holders of all Bonds then outstanding.
Nothing in the Indenture shall affect or impair, however, the right of any Holder to enforce the payment of the Bond Service Charges on any Bond owned by that Holder at and after the maturity thereof, at the place, from the sources and in the manner expressed in that Bond.
Application of Money. All monies received by the Trustee (i) for deposit in the Bond Fund shall be applied in accordance with the Indenture or (ii) for other purposes set forth in a Supplemental Indenture, shall be applied as provided in that Supplemental Indenture. After payment of any costs, expenses, liabilities and advances paid, incurred or made by the Trustee in the collection of monies pursuant to any right given or action taken under the provisions of the Indenture (including without limitation, reasonable attorneys' fees and expenses, except as
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limited by law or judicial order or decision entered in any action taken under the Indenture), and provided that no such costs, expenses, liabilities and advances shall be paid from monies in the Redemption Account or the Defeasance Account, all monies received by the Trustee, shall be applied as follows, subject to the Indenture:
(a) Unless the principal of all of the Bonds shall have become due and payable, all of that money shall be deposited in the Bond Fund and shall be applied:
First – To the payment to the Holders entitled thereto of all installments of interest then due on the Bonds, in the order of the dates of maturity of the installments of that interest, beginning with the earliest date of maturity and, if the amount available is not sufficient to pay in full any particular installment, then to the payment thereof ratably, according to the amounts due on that installment, to the Holders entitled thereto, without any discrimination or privilege, except as to any difference in the respective rates of interest specified in the Bonds; and
Second – To the payment to the Holders entitled thereto of the unpaid principal of any of the Bonds that shall have become due (other than Bonds previously called for redemption for the payment of which money is held pursuant to the provisions of the Indenture), whether at stated maturity, by redemption or pursuant to any Mandatory Sinking Fund Requirements, in the order of their due dates, beginning with the earliest due date, with interest on those Bonds from the respective dates upon which they became due at the rates specified in those Bonds, and if the amount available is not sufficient to pay in full all Bonds due on any particular date, together with that interest, then to the payment thereof ratably, according to the amounts of principal and interest due on that date, to the Holders entitled thereto, without any discrimination or privilege, except as to any difference in the respective rates of interest specified in the Bonds.
(b) If the principal of all of the Bonds shall have become due of shall have been declared to be due and payable pursuant to the Indenture, all of that money shall be deposited into the Bond Fund and shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds, without preference or priority of principal over interest, of interest over principal, of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the Holders entitled thereto, without any discrimination or privilege, except as to any difference in the respective rates of interest specified in the Bonds, and thereafter as provided in any applicable Supplemental Indenture.
(c) If the principal of all of the Bonds shall have been declared to be due and payable pursuant to the Indenture, and if that declaration thereafter shall have been rescinded and annulled under the provisions of the Indenture, subject to the provisions of paragraph (b) above in the event that the principal of all of the Bonds shall become due and payable later, the monies shall be deposited in the Bond Fund and shall be applied in accordance with the provisions of the Indenture.
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(d) Whenever money is to be applied pursuant to the provisions of the Indenture, that money shall be applied at such times, and from time to time, as the Trustee shall determine, having due regard to the amount of money available for application and the likelihood of additional money becoming available for application in the future. Whenever the Trustee shall direct the application of that money, it shall fix the date upon which the application is to be made, and upon that date, interest shall cease to accrue on the amounts of principal, if any, to be paid on that date, provided the money is available therefor. The Trustee shall give notice of the deposit with it of any money and of the fixing of that date, all consistent with the requirements of the Indenture for the establishment of, and for giving notice with respect to, a Special Record Date for the payment of overdue interest. The Trustee shall not be required to make payment of principal of and any premium on a Bond to the Holder thereof, until the Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if it is to be paid fully.
(e) Whenever all Bond Service Charges shall have been paid under the provisions of the Indenture and all expenses and charges of the Trustee, the Registrar, the Authenticating Agents and the Paying Agents have been paid, and all reimbursements to the Issuer have been paid, any balance remaining in the Bond Fund shall be paid respectively into the other Funds to make up any deficiency existing in any such Funds under the terms of the Indenture, or if all Bonds shall be deemed to have been paid and discharged under the Indenture, then shall be paid to the Issuer unless other provision is made therefor.
Termination of Proceedings. If the Trustee shall have proceeded to enforce any remedy, right or power under the Indenture in any suit, action or proceedings, and the suit, action or proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then the Issuer, the Trustee and the Holders shall be restored to their former positions and rights under the Indenture, respectively, and all rights, remedies and powers of the Trustee shall continue as if no suit, action or proceedings had been taken.
Waivers of Events of Default
Except as provided in the Indenture or as modified or supplemented by a Supplemental Indenture, the Trustee shall waive any Event of Default under the Indenture and its consequences upon the written request of the Holders of (i) 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 Bond Service Charges exists, or (ii) at least twenty-five percent (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. The Trustee will not however waive any Event of Default resulting from failure to pay any interest on any Bond when and as such interest becomes due and payable or from the failure to the principal of or any premium on any Bond when and as such principal or premium shall become due and payable, whether at stated maturity, by redemption, pursuant to any Mandatory Sinking Fund Redemption Requirements, by acceleration or otherwise, plus interest to the extent permitted by law on any overdue installments of interest at the rate borne by the Bonds in respect of which the default
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shall have occurred, shall have been duly paid or provision shall have been duly made therefor by deposit with the Trustee or Paying Agents.
Defeasance
When all Outstanding Bonds and all other sums payable under the Indenture or a Supplemental Indenture have been paid and discharged (or provisions therefor have been made within the meaning of the Indenture), then the Indenture will cease, determine and become null and void (except for those provisions surviving by reason of the Indenture in the event that the Bonds are deemed to be paid and discharged pursuant to the Indenture), and the covenants, agreements and obligations of the Issuer under the Indenture shall be released, discharged and satisfied and the Trustee shall sign and deliver to the Issuer any instruments or documents in writing as shall be requisite to evidence that release and discharge or as reasonably may be requested by the Issuer, and the Trustee and any other Paying Agents shall assign and deliver to the Issuer any property then subject to the lien of the Indenture which then may be in their possession, except amounts in the Bond Fund required (i) to be paid under the Indenture or (ii) to be held by the Trustee and the Paying Agents under the Indenture or otherwise for the payment of Bond Service Charges, and the Trustee shall take any other actions required by a Supplemental Indenture.
Additional Bonds
Upon the execution and delivery of the applicable Supplemental Indenture, the Issuer shall cause the execution of the related series of Bonds and their delivery to the Trustee. Thereupon, the Trustee shall authenticate the Bonds and shall deliver them to, or on the order of, the Original Purchaser, as directed by the Issuer in accordance with the Indenture. As a condition precedent (among others) to the issuance of Additional Bonds, the Indenture requires the Issuer to certify (i) that reasonably projected County Excise Tax Receipts to be received from and after the date of delivery of such Additional Bonds to the Original Purchaser thereof are sufficient in time and amount to pay all Bond Service Charges on all Bonds and all debt service charges on all Subordinated Indebtedness outstanding immediately after delivery of such Additional Bonds when due without regard to any optional redemption, and (ii) that one-half of the aggregate County Excise Tax Receipts during the twenty-four (24) consecutive calendar months prior to the sale of the Additional Bonds is greater than one hundred eighty-five percent (185%) of the amount of Bond Service Charges on all Bonds to be outstanding immediately after delivery of such Additional Bonds due and payable during any Bond Year plus one hundred fifty percent (150%) of all debt service charges on all Subordinated Indebtedness due and payable during any Bond Year; provided, however, that if such Additional Bonds are to be sold during the twenty-four (24) months beginning August 1, 2015, then the amount of County Excise Tax Receipts to be used in such calculation shall be the average amount of County Excise Tax Receipts received in each month following August 1, 2015 in which County Excise Tax Receipts are received, multiplied by twelve (12) The Indenture permits Additional Bonds to be issued in a variety of interest rate modes and with balloon maturities or tender features, and in those cases allows compliance with the Additional Bonds Test to be determined based on the specified assumptions regarding long-term interest rates and amortization schedules.
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Subordinated Indebtedness
The Indenture provides that the County may from time to time issue or incur Subordinated Indebtedness for the same purposes for which the County may issue the Series 2015 Bonds and for the purpose of refunding or advance refunding Subordinated Indebtedness previously issued for those purposes, subject to the Additional Bonds Test. Any Supplemental Indenture applicable to the Subordinated Indebtedness shall provide for the creation or maintenance of a subordinated debt service fund and for the requirement of deposits of County Excise Tax Receipts at times and in amounts consistent with the requirement that debt service charges on Subordinated Indebtedness are payable and secured on a basis subordinate to the Bond Service Charges and to any obligation of the Issuer under the Indenture to many any required deposit to the Bond Reserve Fund. Any Supplemental Indenture applicable to subordinated indebtedness shall also provide that neither the holders of such Subordinated Indebtedness nor any trustee on their behalf shall have the right, power or authority to cause acceleration of such Subordinated Indebtedness unless and until the Trustee has exercised any power it may have to accelerate the Bonds.
The Trustee
Prior to the occurrence of a Default or an Event of Default of which the Trustee has been notified and after the cure or waiver of all Defaults or Events of Default which may have occurred, the Trustee undertakes to perform only those duties which are described specifically in the Indenture, and no duties of the Trustee shall be implied; in the absence of bad faith on its part, the Trustee may rely conclusively, as to the truth of the statements and the accuracy of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and which conform to the requirements of the Indenture. In case a Default or an Event of Default has occurred and is continuing (of which the Trustee has been notified or is deemed to have notice), the Trustee shall exercise those rights, remedies and powers vested in it under the Indenture and shall use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of that person's own affairs.
Nothing in the Indenture relieves the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that this does not affect the limitation of the Trustee's duties and obligations described in the previous paragraph or the Trustee's right to rely on the truth of statements and the correctness of opinions as provided in the previous paragraph. Furthermore, the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than sixty- six and two-thirds percent (66-2/3%) in principal amount of the Bonds then outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under the Indenture. Finally, no provision of the Indenture requires the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or powers if it will have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
Except for its certificate of authentication on the Bonds, the Trustee shall not be responsible for any recital in the Indenture, in the Bonds, or any other related document, statement or certificate; the validity, priority, recording, rerecording, filing or refiling of the Indenture or any Supplemental Indenture; any financing statements, amendments thereto or
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continuation statements; the validity of the execution by the Issuer of the Indenture, any Supplemental Indenture or instruments or documents of further assurance; the sufficiency of the security for the Bonds issued under the Indenture or intended to be secured by the Indenture; or the maintenance of the security thereof. The Trustee shall not be bound to ascertain or inquire as to the observance or performance of any covenants, agreements, or obligations on the part of the Issuer, except as set forth in the Indenture; but the Trustee may require of the Issuer full information and advice as to the observance or performance of those covenants, agreements and obligations. The Trustee shall not be accountable for the application by the Issuer of the proceeds of any Bonds authenticated or delivered under the Indenture. The Trustee shall be protected, in the absence of bad faith on its part, in acting upon any notice, request, consent, certificate, order, affidavit, letter, telegram or other paper or document reasonably believed by it to be genuine and correct and to have been signed or sent by the proper Person. Any action taken by the Trustee pursuant to the Indenture upon the request or authority or consent of any Person who is the Holder of any Bonds at the time of making the request or giving the authority or consent, shall be conclusive and binding upon all future Holders of the same Bond and of Bonds issued in exchange therefor or in place thereof.
As to the existence or nonexistence of any fact for which the Issuer may be responsible or as to the sufficiency or validity of any instrument, document, report, paper or proceeding, the Trustee, in the absence of bad faith on its part, shall be entitled to rely upon a certificate signed on behalf of the Issuer, as sufficient evidence of the facts recited therein. Prior to the occurrence of a default or Event of Default under the Indenture of which the Trustee has been notified or of which the Trustee is deemed to have notice, the Trustee may accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient; provided that the Trustee in its discretion may require and obtain any further evidence that it deems to be necessary or advisable; and, provided further that the Trustee shall not be bound to secure any further evidence. The Trustee may accept a certificate of the Clerk to the effect that legislation has been enacted by the Council in the form recited in that certificate, as conclusive evidence that the legislation has been duly enacted and is in full force and effect.
The Trustee shall not be required to take notice, and shall not be deemed to have notice, of any default or Event of Default under the Indenture, except Events of Default involving non- payment of interest or Bonds, unless the Trustee shall be notified specifically of the default or Event of Default in a written instrument or document delivered to it by the Issuer, or by the Holders of at least twenty-five percent (25%) of the aggregate principal amount of Bonds then outstanding. In the absence of delivery of a notice satisfying those requirements, the Trustee may assume conclusively that there is no default or Event of Default, except as noted above.
Before taking remedial actions under the Indenture, the Trustee may require that a satisfactory indemnity bond be furnished to it for the reimbursement of all fees and expenses which it may incur and to protect it against all risk and liability by reason of any action so taken, except liability that is adjudicated to have resulted from its negligence or willful default.
Extent of Covenants; No Personal Liability
All covenants, stipulations, obligations and agreements of the Issuer contained in the Indenture are and shall be deemed to be covenants, stipulations, obligations and agreements of
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the Issuer to the full extent authorized by law and permitted by the Constitution of the State. No covenant, stipulation, obligation or agreement of the Issuer contained in the Indenture shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, officer, agent or employee of the Issuer or the Council in other than that person's official capacity. Neither the members of the Council nor any official signing the Bonds, the Indenture or any amendment or supplement hereto or thereto shall be liable personally on the Bonds.
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APPENDIX B THE COUNTY OF CUYAHOGA, OHIO
The County is an independent political subdivision of the State and operates subject to the provisions of the Ohio Constitution, the Charter (defined below) and various sections of the Revised Code. The County is located on the southern shore of Lake Erie in northeastern Ohio. The County covers an area of 458.3 square miles and contains two townships and 57 cities and villages, the largest of which is the City of Cleveland (the "City"), the county seat of the County. The State established the County on February 8, 1808, and the first meeting of the Cuyahoga County Board of County Commissioners was held in June 1810. The County is substantially fully developed and, according to the 2010 census, had a population of 1,280,122, making it the most populous county in the State and the 29th most populous county in the United States. The population estimate for the County in 2014 was 1,259,828.
Census figures for the County, over the last several decades, show the County's trend in population as follows:
Decade Population 1970 1,721,300 1980 1,498,400 1990 1,412,140 2000 1,393,978 2010 1,280,122
The County is served by 31 school districts, including the Cleveland Metropolitan School District, which educates over 38,700 students within the County.
In addition to the services provided by municipalities (and to some extent, townships) and the educational services provided by the various school districts within the County and State, there are other special districts and governmental entities currently performing various public service functions in the County. These include, among others, the Cleveland Metropolitan Park District (park and recreation facilities and programs), the Greater Cleveland Regional Transit Authority (mass transit), the Cleveland-Cuyahoga County Port Authority (lake port facilities and economic development activities), the Cuyahoga Community College District (two-year community college), the Cuyahoga County Library District (library facilities), the Cuyahoga County Solid Waste Management District (solid waste management), the Cuyahoga Metropolitan Housing Authority (low-income housing), the Northeast Ohio Regional Sewer District (wastewater collection and treatment) and Cuyahoga Arts & Culture (support for the arts).
The several cities, villages and townships, together with the various special districts and other governmental entities operating in the County, are responsible for providing many local governmental services and make significant expenditures in providing such services to County residents. The County, nonetheless, has significant responsibilities in the areas of general government, administration of justice, health care, sanitation, and welfare and public assistance.
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ORGANIZATION AND MAJOR OFFICES
Government Structure Prior to January 1, 2011
Prior to January 1, 2011, a three-member Board of County Commissioners, elected at large in even-numbered years for four-year overlapping terms, was the primary legislative and executive body of the County.
In addition to the County Commissioners, there were eight other elected administrative officials of the County, each of whom was independent within the limits provided by the State statutes affecting the particular office. Those officials, elected to four- year terms, included the County Auditor, County Treasurer, Clerk of Courts, County Recorder, County Engineer, Sheriff, Prosecuting Attorney and Coroner.
Government Structure Effective January 1, 2011
Under the State Constitution, the electors of a county have authority to adopt a charter that provides an organization for their county government that differs from that under State statutes and, under certain circumstances, for the county government to exercise powers in addition to those vested in counties by statute.
On November 6, 2009, the voters of the County adopted a County Charter (the "Charter") that changed the form of the County's government. The Charter was effective January 1, 2010, with 2010 being a year of transition to the new form of government.
The Charter eliminated the elected positions of County Commissioners, County Auditor, County Treasurer, County Recorder, Clerk of Courts, County Coroner, County Engineer and Sheriff. In place of the previously elected officers, the Charter provides for an elected County Executive, an elected 11-member County Council (the "Council") and an elected Prosecuting Attorney. The County Executive and the Prosecuting Attorney are elected by all the voters of the County, and each member of Council is elected by voters in one of 11 districts established by the Charter. Consistent with the authority and requirements provided in the State Constitution for charter counties, the Charter provides for the County to exercise all powers vested in and perform all duties imposed upon counties and county officers from time to time by the Constitution and laws of the State, but also powers specifically conferred by the Charter or incidental to those specific powers and all other powers that counties are not prohibited to exercise by the Constitution or laws, including powers that may be concurrently exercised by the County and municipalities.
At an election in November 2010, Edward FitzGerald was elected as the first County Executive for a four-year term commencing January 1, 2011. At that same election, 11 members of the new Council were elected, six members to serve four-year terms and five members to serve two-year terms, all also commencing on January 1, 2011. Commencing January 1, 2013, all members were and will be elected to four-year terms. At an election on November 4, 2014, Armond Budish was elected as County Executive for a four-year term commencing January 1, 2015.
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The following is a table of the principal officials of the County. Their duties and responsibilities are outlined below: Principal Officials County of Cuyahoga, Ohio Date Term Date Name Office Expires Tenure Began Dan Brady Council President 12/31/2018 1/1/2015 Pernel Jones, Jr. Council Vice President 12/31/2018 1/1/2015 Yvonne M. Conwell Council Member 12/31/2018 1/1/2015 Michael J. Gallagher Council Member 12/31/2018 1/1/2015 Chuck Germana Council Member 12/31/2018 1/1/2015 Dave Greenspan Council Member 12/31/2018 1/1/2015 Anthony T. Hairston Council Member 12/31/2016 5/1/2014 Shontel Brown Council Member 12/31/2018 1/1/2015 Dale Miller Council Member 12/31/2016 1/1/2011 Jack Schron Council Member 12/31/2016 1/1/2011 Sunny M. Simon Council Member 12/31/2018 1/1/2015 Armond Budish County Executive 12/31/2018 1/1/2015 Timothy McGinty Prosecuting Attorney 12/31/2016 10/1/2012 Dennis G. Kennedy, CPA County Fiscal Officer Appointed 2/19/15 W. Christopher Murray II County Treasurer Appointed 4/28/15 Jeanne Schmotzer Clerk of Council Appointed 1/25/11 Nailah K. Byrd Clerk of Courts Appointed 1/8/15 Clifford Pinkney Sheriff Appointed 4/4/15 Robert J. Triozzi Director of Law Appointed 2/26/15 Mark Griffin Inspector General Appointed 3/3/15 Thomas P. Gilson, M.D. Medical Examiner Appointed 5/31/11 Valerie Harry, CPA Director of Internal Audit Appointed 3/27/12 Michael W. Dever, M.P.A. Director of Public Works Appointed 3/3/15 Egdilio Morales Interim Director of Human Resources Appointed 10/30/15 Matt Carroll Interim Director of Health and Appointed 1/16/15 Human Services Nathan Kelly Interim Director of Development Appointed 4/13/15 Edward Kraus Director of Regional Cooperation Appointed 1/2/15 Mary Louise Madigan Director of Communications Appointed 9/23/15 Eliza Wing Chief Communications Officer Appointed 8/17/15 Source: Cuyahoga County
County Executive
The County Executive, with the approval of the Council, appoints the following: (i) a County Fiscal Officer who has the duties of an elected county auditor, an elected county recorder and an elected clerk of courts (other than those related to the operations of the County Courts) under State law; (ii) a Medical Examiner who performs the duties of an elected county coroner under State law; (iii) a Clerk of Courts to carry out the duties of an elected clerk of courts related to the operations of the Courts under State law; (iv) a Director of Public Works who performs the duties of an elected county engineer and a sanitary engineer under State law; (v) a Director of Law who serves as the legal advisor and representative to the County B-3
Executive and Council; (vi) a County Treasurer who performs the duties of an elected county treasurer under State law; (vii) a Sheriff who performs the duties of an elected county sheriff under State law; and (viii) a Director of Human Services who manages the administration of the County's various human service agencies, programs and activities.
The County Executive has powers and duties of an administrative nature, including, but not limited to, overseeing most personnel and collective bargaining matters, executing contracts, conveyances and indebtedness on behalf of the County, introducing ordinances and resolutions for Council's consideration and submitting tax and operating budgets, capital improvement plans, a five-year financial forecast for County operating funds and a related written message annually. The County Executive also has veto power over Council's actions.
County Council
The Council holds the legislative power and is the taxing authority of the County. The Council elects a President, has a Clerk and other assistants, and has authority to establish procedures governing the making and administration of County contracts and public improvements. Council also has authority to adopt the annual tax budget and the County's operating and capital budgets, to make appropriations to provide for the acquisition, construction and maintenance of property, and to establish a procedure for the levying of special assessments. The Council may override a veto of the County Executive if at least eight members of Council vote to approve the vetoed measure. The Council may investigate any financial transaction relating to any matter upon which it is authorized to act, and has investigative as well as legislative powers.
County Budget Commission
The County Budget Commission, consisting of the County Executive, the County Fiscal Officer and the Prosecuting Attorney, exercises all powers and performs all duties performed by a county budget commission under State law.
County Department of Development
A County Department of Development oversees economic development in the County with a Director of Development appointed by the County Executive, subject to confirmation by Council. An appointed Economic Development Commission is required to present a five- year economic development plan in June of each year.
County Audit Committee
The County Audit Committee provides internal auditing to assist the County Executive, Fiscal Officer, the Council, and other county officers and departments, institutions, boards, commissions, authorities, organizations, and agencies of the County government funded in whole or in part by County funds in providing taxpayers of the County with efficient and effective services.
County Personnel Review Commission
County employment practices and the classification of employee positions are monitored by an appointed County Personnel Review Commission. B-4
Financial Management
The County Executive is responsible for providing and managing the funds used to support various County activities. The Council exercises its legislative powers in budgeting, appropriating money, levying taxes, issuing securities and letting contracts for public works and services.
The County's Office of Budget and Management performs financial analysis and administrative functions for the County Executive. That Office's staff assists the County Executive and County Fiscal Officer in the budget process and monitors the operations of the County departments and independent boards and agencies. Its responsibilities include revenue forecasting, operating budget development and review, policy and legislative analysis, fiscal transaction processing, capital budgeting, systems analysis, federal programs review, cost effectiveness studies and financial consultation services.
Management of County Facilities
The County Executive has responsibility for the management of most County facilities, including various public assistance and social services, court, correctional and administrative facilities, and general County government facilities.
Administration
Independent boards and commissions administer a large variety of services within the County. Those boards and commissions include, among others, the Alcohol, Drug Addiction and Mental Health Services Board, the Veterans Service Commission, the Board of Developmental Disabilities, the County Planning Commission and the Board of County Hospital Trustees.
Some of these boards and commissions are appointed entirely by the County Executive and are subject to complete fiscal control by the County Executive and, through the appropriations process, the Council. Others have no members appointed by the County Executive and may, to varying extents, be independent of fiscal control by the County Executive and the Council. There are also others for which the County Executive does not have appointment powers but does have extensive fiscal responsibilities. For example, the County Executive has extensive financing, funding, budgeting and accounting responsibilities for the Board of Elections and for various courts, but does not appoint the members of the Board of Elections or the judges or employees of the courts.
The County Executive appoints three of ten members of the Board of Trustees of the Greater Cleveland Regional Transit Authority, three of nine members of the Board of Directors of the Cleveland-Cuyahoga County Port Authority, six of nine members of the Board of Trustees of the Cuyahoga Community College District, one of seven members of the Board of Trustees of the Northeast Ohio Regional Sewer District and all three members of the Board of Trustees of Cuyahoga Arts & Culture. Those entities are separate political subdivisions for which the County has no fiscal or administrative responsibilities other than as taxing authority. The County Executive also appoints two of five members, and shares with the City of Cleveland one joint appointment, to the Board of the Gateway Economic Development Corporation of Greater Cleveland, a nonprofit corporation organized for the purpose of developing and maintaining the Gateway Project, which consists of a 42,300-seat outdoor baseball stadium (Progressive Field), a 20,500-seat multipurpose arena (Quicken B-5
Loans Arena), a parking garage and related common areas in downtown Cleveland. The County Executive also appoints four of sixteen members of the Board of Directors of Senior Transportation Connection of Cuyahoga County, a nonprofit corporation organized for the purpose of increasing and improving the availability and quality of, and access to, sufficient transportation services for senior citizens in the County (the "STC"). The County Executive currently has no fiscal or administrative responsibilities with respect to the STC.
General Government
Of the officers that can be grouped under the category of general government, in addition to the County Executive, two, the County Fiscal Officer and the County Treasurer, are of particular pertinence to the financial affairs of the County.
Fiscal Officer
The County Fiscal Officer has assumed the duties performed by elected county auditors and county recorders under the statutory form of county government, as well as certain duties performed by an elected clerk of courts.
The County Fiscal Officer has the responsibility of assessing real property for taxing purposes. Under State law, a complete reappraisal must be conducted every six years (as was last completed in 2012) and updated every three years. The Fiscal Officer is the fiscal officer of the County and, in general, no County contract or obligation (other than contracts and obligations entered into in connection with the operation of The MetroHealth System, the County's public hospital system) may be made without his certification that funds for payment are available or are in the process of collection. In addition, no account may be paid except by his warrant drawn upon the County Treasury. The Fiscal Officer is responsible for preparation and disbursement of the County payroll and has statutory accounting responsibilities. He is a member, and the Secretary, of the County Board of Revision and the County Budget Commission and serves as the chair of the County Audit Committee.
Treasurer
The Treasurer, who is now appointed by the County Executive and reports to the Fiscal Officer, performs the duties of an elected county treasurer under the statutory form of county government. The Treasurer collects certain taxes to distribute to various governmental units. The Treasurer prepares and mails tax bills to real property owners in the County and is the disbursing agent for expenditures authorized by the County Executive and Council. The Treasurer makes daily reports showing receipts, payments and balances to the Fiscal Officer. The Treasurer is also charged with the responsibility of investing County funds. See "COUNTY TAX BASE – Investment of Funds."
Employees
As of December 31, 2014, the County had approximately 7,627 full-time equivalent employees (excluding employees of The MetroHealth System) in various job classifications who were employed by the County Executive, other elected County officials and County- funded boards and commissions.
A statewide public employee collective bargaining law applies to public employee relations and collective bargaining. B-6
As of December 31, 2014, 2,839 County employees under the County Executive were members of and represented by one of 36 individual bargaining units. The balance of full- time County employees are not members of a bargaining unit.
Generally, the terms of the salaries, wages and other economic benefits have been the products of negotiations with representatives of the employees or bargaining units and increases in economic benefits have been provided on an annual basis. The County's most recent contracts with the collective bargaining units for its employees have provided for annual wage and salary increases up to 2% in 2014 and for the employees to participate in the County's health care plans.
The County's non-bargaining unit employees have not been allocated wage and salary cost of living increases during the period from 2008 through 2012, but did receive a 1% cost of living increase in 2013. In 2014, merit increases ranging from 0.5% to 1.5% were given to non-bargaining employees; there was no cost of living increase.
In the judgment of the County, its employee relations generally have been and are currently considered to be good. Pension Obligations
Employees, present and retired, of the County are covered under a statewide public retirement (including disability retirement) system, the Ohio Public Employees Retirement System ("OPERS"). Teachers employed by the school for Board of Developmental Disabilities ("BODD") are covered under a statewide public retirement system, State Teachers Retirement System of Ohio ("STRS Ohio"). Both plans are cost sharing, multiple- employer plans, created by and operated pursuant to Ohio law. The General Assembly could amend the format of the funds, and revise contribution rates to be made by the County, and revise benefits or benefit levels. Health care coverage is not statutorily guaranteed.
Currently, all of the employees of the County, other than those employed by BODD, are covered by OPERS. These employees contribute at a rate of 10.00% of earnable salary or compensation, and the County contributes 14.00% of the same base, except for uniformed employees of the Sheriff's Department who currently contribute at a rate of 12.10% of earnable salary or compensation, and for whom the County contributes at a rate of 18.1%.
The current employer contributions to OPERS have been and are presently treated as current expenses of the County and included in its operating expenditures. OPERS issues a stand-alone financial report that may be obtained at www.opers.org or in at the OPERS offices, 277 East Town Street, Columbus, Ohio 43215 or by calling (800) 222-7377.
Currently, 76 County employees are covered by STRS Ohio. The employee contribution rate is 10.00% of earnable salary or compensation, and the County contributes 14.00% of the same base.
The current employer contributions to STRS Ohio have been and are presently treated as current expenses of the County and included in its operating expenditures. STRS Ohio issues a stand-alone financial report that may be obtained at www.strsoh.org or at the STRS Ohio offices, 275 East Broad Street, Columbus, Ohio 43215.
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Under the Consolidated Omnibus Reconciliation Act of 1985 (P.L. 99-272), public employers including the County are subject to mandatory Medicare (hospital insurance tax or FICA tax) contributions of 1.45% of each covered employee's wage base. Covered employees include all employees (with limited exceptions) hired after March 31, 1986.
COUNTY SERVICES AND RESPONSIBILITIES
The following are descriptions of selected County services and responsibilities.
Public Assistance and Social Services
Public assistance and employment training functions within the County are administered by a unified Department of Health and Human Services. There are four autonomous divisions within the Department – Jobs and Family Services, Children and Family Services, Senior and Adult Services, and Workforce Development. Each division has its own administrator but is supported and overseen by the Office of Health and Human Services. The director of each such division reports to the Director of Health and Human Services, who serves as the statutorily-mandated County Director of Jobs and Family Services and is appointed by, and responsible to, the County Executive. The four divisions had 1,733 full- time equivalent employees as of December 31, 2014, and are further described below.
Jobs and Family Services
Jobs and Family Services ("JFS") administers a variety of programs and services providing assistance to working families, older adults and disabled persons. Those programs and services, which include Healthy Start and other Medicaid health insurance programs, child-care assistance, the Ohio Works First ("OWF") program, food benefits, PRC emergency financial help and financial and medical assistance services for the disabled, are primarily funded from federal and State sources. Within JFS, the Cuyahoga Support Enforcement Agency locates absent parents, helps to establish paternity, works with parents in completing requirements for support orders and collects and distributes child support and spousal support funds from divorced parents.
Children and Family Services
Children and Family Services provides child protection activities and support services to strengthen families by investigating allegations of child abuse, neglect and dependency, coordinating child protective services and resources, utilizing foster and adoptive homes or residential treatment facilities as needed, and providing services designed to promote family reunification.
Senior and Adult Services
Senior and Adult Services provides protective and supportive services to consenting elderly and disabled adults to protect them from abuse, neglect or exploitation. These services are designed to keep individuals in their homes or in the least restrictive environment possible. See "COUNTY SERVICES AND RESPONSIBILITIES – Health" herein.
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Workforce Development
Workforce Development administers the federal Workforce Investment Act program that provides education services and training programs to prepare adults and youth for the workforce and to assist in meeting the community's workforce needs.
As of December 31, 2014, $126.7 million was expended for the public assistance programs and $294.6 million was expended in total for the social service and employment training programs it administers, with approximately 56.6% of the amount for public assistance programs and social service programs coming from the State and federal governments. Some of the social services are provided directly by Children and Family Services and Senior and Adult Services; other services are provided by Employment and Family Services, Workforce Development and community agencies under contract with these divisions. Cuyahoga Support Enforcement Agency expenditures for Fiscal Year 2014 were $29.0 million, of which approximately 80% is expected to come from the State and Federal governments.
The County's local share of expenditures for the activities and programs of these divisions is currently funded with proceeds from two voted health and human services property tax levies of 3.9 mills and 4.8 mills, expiring on December 31, 2016 and 2018, respectively. Approximately $101.5 million from the health and human services tax levies was directed to these purposes in 2014, utilizing a total of $232.4 million for all health and human services purposes combined.
The Veterans Service Commission (the "Veterans Commission") and the Board of Developmental Disabilities also operate within the area of health and public assistance but apart from the Department of Health and Human Services.
The Veterans Commission assists veterans and their dependents by providing emergency assistance and securing the materials and information needed to apply for and receive assistance under the various programs administered by the United States Department of Veterans Affairs. The five members of the Veterans Commission are appointed by the Judges of the Common Pleas Court and serve five-year terms. The activities of the Veterans Commission are financed from the County's General Fund. Veteran Services spent $6.4 million from the General Fund for those activities in 2014.
The County's program for the developmentally disabled persons, operated through the Board of Developmental Disabilities, provides various services to developmentally handicapped children and adults, including training classes, workshops and home services. Of the seven members of the Board of Developmental Disabilities, five are appointed by the County Executive and two by the Judges of the Probate Court. In addition to receiving State reimbursement and tuition reimbursement from the boards of education in the County, the Board of Developmental Disabilities is currently funded by a 3.9-mill voted property tax levy which was renewed for a continuing period of time in November 2005. That levy generated $90.2 million in 2014.
Health
The County subsidizes the operation of The MetroHealth System ("MetroHealth"), the public health care system for the County that includes a general, acute-care hospital, outpatient centers, a skilled and intermediate care nursing facility, a rehabilitation facility and a family B-9
health center. MetroHealth is governed by a Board of County Hospital Trustees that is appointed by the County Executive and the senior judges of the County's Probate and Common Pleas Courts. The total bed capacity of MetroHealth is 731, and in Fiscal Year 2013 (the most recent year available) the total operating expenditures of MetroHealth were $823.9 million. The County spent $40.1 million from proceeds of the two voted health and human services tax levies, referred to above under “Public Assistance and Social Services” to subsidize System expenditures in Fiscal Year 2014. Requests from the County Hospital Trustees for levy fund subsidies are considered by the County each year and allocations of levy funds for operating expenditures of MetroHealth are made based on System needs and County resources available for this purpose. The County will continue to consider the provision of funds to MetroHealth in subsequent years.
MetroHealth has announced a significant Transformation Plan which would include upgrading and expansion of its physical facilities, including the Critical Care Pavilion which is expected to be completed in the summer of 2016. MetroHealth has requested significant funding for future phases of the Transformation Plan from the County. To date, the County has made no commitment to provide funding, nor has a source of funding been identified.
The Alcohol, Drug Addiction and Mental Health Services Board of Cuyahoga County (the "ADAMHS Board") is responsible for the planning, funding and monitoring of public mental health, and alcohol and other drug addiction treatment services delivered to the residents of the County. The ADAMHS Board does not provide services directly to consumers, but coordinates and evaluates activities at mental health centers and provides counseling and education services for children and adults. Other services for diagnosis, treatment and counseling for substance abuse are contracted out to provider agencies. In Fiscal Year 2014, the County provided approximately $39.4 million of funding to the ADAMHS Board. The County's sources of that funding are the two voted health and human services tax levies referred to above under "Public Assistance and Social Services".
The County Health District (the "CHD") is a separate political subdivision which is not coterminous with the County. The CHD Board of Health performs various services for villages, cities, townships and school districts contracting with it. Some of the services provided are immunizations, home nursing visits and sanitary inspections. The County provides office space for the CHD Board of Health but has no authority to control the activities of the CHD Board of Health and Council does not appropriate any significant amount of funds for its operations. The CHD Board of Health is supported primarily by the charges it receives from contracting subdivisions.
Administration of Justice
As a part of the administration of the justice system in the County, the County maintains facilities for the Common Pleas Court (the court of general jurisdiction), including the Juvenile Division, the Domestic Relations Division and the Probate Division, and the Eighth District Court of Appeals. The Prosecuting Attorney's office, the Juvenile Justice Center and County Jail facilities are also maintained by the County.
In addition to his responsibilities as a prosecutor of criminal cases, the Prosecuting Attorney is designated by the Charter and Ohio law as the chief legal counsel for all County officers, boards and agencies, including the County Executive, the Council, the Board of
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Elections, the Fiscal Officer, townships, local school districts and tax-supported public libraries. The Department of Law also provides legal counsel to the County Executive, the Council and all departments under the County Executive.
The Clerk of Courts keeps all official records of the Common Pleas Court and serves as Clerk of Court of the Court of Appeals.
The County Sheriff, the chief law enforcement officer of the County, provides certain specialized services, which include maintaining a special staff of deputies whose duties are to assist local law enforcement officers upon their request and to enforce the law in unincorporated areas of the County. The Sheriff also operates and maintains the County Jail and is responsible for its inmates, including persons detained for trial or transfer to other institutions. As an officer of the County Courts, the Sheriff is in charge of the service of court documents.
Construction of the Cuyahoga County Juvenile Justice Center ("CCJJC") began in 2007 on a 12-acre site in Cleveland. The $160 million project features a 630,000 square foot facility providing for the safety and security of all juveniles housed there and manages their care while awaiting disposition in the Cuyahoga County Juvenile Court for charged criminal violations. Following disposition, the juvenile may be committed to a State Training School, sentenced to the Juvenile Detention Center, placed in a residential treatment center, placed on Probation, or released to parents or guardians. Residents continue their education through the Cleveland Metropolitan School District via on-site classrooms and teachers. The CCJJC facility consolidates all court related and detention activities and replaces the former Cuyahoga County Detention Center. The nine-story tower accommodates the Juvenile Court system for the County. Secured parking is provided for Judges, related staff, other employees of the Center, as well as the public. The CCJJC opened in the first quarter of 2011.
In 2008, the County received a grant in the amount of $10.8 million from the State Department of Rehabilitation and Corrections to construct a Community Based Correctional Facility ("CBCF"). CBCFs are residential sanctioned facilities that provide County Courts of Common Pleas a sentencing alternative to prison. The County's new facility is operated by an outside entity with the Ohio Department of Rehabilitation and Corrections providing an annual operating subsidy for the County's internal cost of administering the facility. A CBCF Governing Board was created at the County to oversee the design, siting and construction of the new facility. The County selected a contractor and construction of the facility commenced in early 2010 and was completed on time and under the allotted budget in late 2010. The facility officially opened on January 30, 2011.
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Arts and Culture
In November 2006, the voters of the County approved an additional tax on wholesale sales of cigarettes for the purpose of supporting the County's arts and cultural sector. The tax, in the amount of $0.015 per cigarette, became effective February 1, 2007, and is collected by the State. The tax generated $16.6 million for 2013, and generated approximately $16.0 million for 2014. The current tax expires in 2017. On November 3, 2015, the voters of the County approved an extension of the excise tax for an additional ten years. The County Executive has appointed the three-person Board of Trustees of Cuyahoga Arts & Culture that makes decisions about the expenditure of such tax revenues. All prior County support for this sector was funded from General Fund revenue sources.
County Facilities, Utility and Other Enterprises
The County presently owns the following facilities: Facility Use Square Feet Acreage Estimated Value
Mall/Public Square District Special Events 946,377 $425,000,000 Cleveland Convention Center and Global Center for Health Innovation Courthouse and Huntington Park Courts, Parking Garage 638,792 10.24 38,120,800 Garage Courthouse Square Justice related programs 100,503 0.45 12,557,500 Men’s Homeless Shelter Men’s homeless shelter 29,332 0.92 872,300 Soldiers’ & Sailors’ Monument Monument 2.90 18,961,700 Justice Center Courts Tower Courts (a) (b) (c)
Corrections Center Courts/Inmate cells (a) (b) (c) Galleria Court rooms (a) (b) (c) Jail II Corrections Facility Courts/Inmate cells (a) (b) (c) Parking Garage Parking garage (a) (b) (c) East 9th/Erieview District Central Services Building Central Services 51,480 1.20 2,162,200 Lakeside Industry District Virgil E. Brown Building Child Support Enforcement 250,852 1.26 26,893,700 Mid-Town Corridor District Board of Elections Board of Elections 64,149 .72 2,343,700 Jane Edna Hunter Building Children & Family Services 170,640 2.41 6,105,600 University Circle District Coroner Building Medical Examiner’s Office 279,919 3.33 15,737,000 Juvenile Justice Center Juvenile Court & Detention Ctr. 607,500 15.18 141,340,300 Ohio City District Metzenbaum Child Center Family Services 26,896 5.81 2,422,300 Richmond Heights District/County Airport Safety/Service Building Administrative Offices and Hangar 86,505 660.00 (d) Valley View District Sanitary Engineer Sanitary Engineer 44,164 6.03 2,230,200 County Animal Shelter County Kennel 20,360 3.95 2,325,300 County Fairgrounds Exhibitor/County Fair 202,799 105.40 7,802,900 (a) Combined square footage of 1,952,083. (b) These facilities are all located on the same 5.16 acre site. (c) Combined estimated value of $93,376,100. (d) Combined estimated value of $12,762,200.
Source: County Fiscal Office. B-12
The County Executive has responsibility for the management of most of these facilities and insures all of the buildings and their contents. The County has recently completed construction of an integrated facility for (a) exhibition space and showrooms for medical devices and equipment and related functions (the Global Center for Health Innovation, previously referred to as the Medical Mart) (the “Global Center”), and (b) exhibition, tradeshow and conference facilities, meeting rooms and related functions (the “Convention Facilities”). The Global Center consists of medical showrooms and meeting rooms and serves as an entrance for the Convention Facilities. The Convention Facilities are located on the site of the former City of Cleveland owned convention center that was demolished to its structural foundation. The Convention Facilities consist of an exhibition hall, associated meeting rooms and other amenities, a ballroom, and a newly designed public mall plaza above. The Global Center and the Convention Facilities opened for use in July 2013. The County sold the former Ameritrust properties to GEIS, Inc. for $27 million in a transaction which involved GEIS overseeing the construction of a new County Headquarters at the corner of East 9th and Prospect in Cleveland, Ohio. The Cleveland-Cuyahoga County Port Authority issued $75,465,000 in bonds to build the new headquarters and functions as the landlord for the building. GEIS developed and will manage the new headquarters for 27 years. The County pays base rent to the Port Authority to cover the debt service on the bonds and pays service rent to GEIS to manage the property. Base rent in the amount of $4,007,100 per year commenced in 2016 and will increase 2% each year for 25 years. Service rent in the amount of $1,767,120 commenced in July 2014 and will increase 2% per year. At the end of the management agreement, the County can purchase the new headquarters for $1.00. The purpose of the County Headquarters is to consolidate personnel from several buildings in the County into one central location. The County has sold 8 buildings and is in the process of selling 4 more buildings. The County will terminate the leases on three buildings after the move takes place. Approximately 700 County employees moved into the new County Headquarters in July, 2014. See also “COUNTY DEBT AND DEBT LIMITATIONS -- County Administrative Building” below. The County owns and maintains a network of roads and bridges constituting the County highway system and related roadside drainage facilities and storm or surface water runoff systems. The Director of Public Works, who has assumed the duties previously performed by the elected county engineer and a county sanitary engineer under State law, oversees roads and bridges and serves as the civil engineer for the County and its officials. The Director of Public Works’ primary responsibilities relate to the construction, maintenance and repair of those roads, bridges and storm water drainage facilities. The Director of Public Works takes bids on and awards contracts for the projects recommended and approved by the County Executive. The County also owns and operates certain wastewater collection and treatment facilities, certain water lines, an airport and related facilities and certain off-street parking facilities. The County’s Sanitary Engineer Division has considerable experience in the maintenance of sanitary and storm sewer lines and is often a major source of information and guidance that mayors, municipal engineers and service directors rely on when making infrastructure decisions within their communities. Currently, this operation encompasses over 34 communities and maintains nearly 1,325 miles of sanitary sewers, treats approximately 147 million gallons of wastewater per year and operates 54 sewage pumping stations as well as 3 wastewater treatment plants throughout Cuyahoga County. The Division also has B-13
agreements with municipal corporations for the establishment, operation and maintenance of sanitary sewers and facilities. In addition, standards for any system connected to or served by a County-owned improvement are established and enforced. In July 2012, the County entered into an agreement with the City of Shaker Heights (“Shaker”) to maintain Shaker’s sewer system. Under this agreement, the County oversees the maintenance of Shaker’s sanitary sewer system, which has become a district within the County sewer system. Shaker continues to own the sewer lines, and the County collects funds for the maintenance of Shaker’s sewer lines. In the first quarter of 2014, the County entered into an agreement with the City of Euclid (“Euclid”) to operate its jail for $400,000 per year. Also, as part of the agreement, the County has agreed to pay $600,000 for renovations of the jail. The County will be paid back over a period of five years for the refurbishments of the jail by Euclid. The Cuyahoga County Airport, Robert D. Shea Field (County Golf Course) is situated on 660 acres of land located in Richmond Heights, Highland Heights and Willoughby Hills. The Cuyahoga County Airport is a reliever airport to Cleveland Hopkins International, and serves the people of eastern Cuyahoga County, and western Lake County and Geauga County. The airport primarily services private and business aircraft, with Cleveland Hopkins International Airport serving as the commercial airport for scheduled airline service in the region. The County’s off-street parking facilities include two public parking facilities in the downtown area of the City and employee-only lots at various County-owned locations. The downtown facilities include a major four-level structure that offers 1,000 parking spaces and a two-level structure that offers 279 spaces, for both daily business activity and special events scheduled in the surrounding area. The County maintains separate funds for each of its sewer districts and parking facilities, and they receive no direct subsidies from the County’s General Fund.
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COUNTY ECONOMIC AND DEMOGRAPHIC INFORMATION
The County is served by diversified transportation facilities including six U.S. highways and seven interstate highways, CSX, Norfolk Southern and Amtrak railroads, four airports and the Port of Cleveland.
The City is the headquarters for the Fourth District Federal Reserve Bank, which serves Ohio, the western portion of Pennsylvania and portions of Kentucky and West Virginia.
Within driving distance the Cleveland metropolitan area are several public and private two-year and four-year colleges and universities, including, among others, Baldwin Wallace University, Case Western Reserve University, Cleveland State University, Cuyahoga Community College, Hiram College, John Carroll University, Kent State University, Lake Erie College, Lorain County Community College, Notre Dame College, Oberlin College, The University of Akron and Ursuline College.
The area is also noted as the site of many cultural institutions and attractions, including, among others, Severance Hall, The Cleveland Museum of Art, Playhouse Square Center (home of the Great Lakes Theater Festival, the Cleveland Play House and Dance Cleveland), The Cleveland Museum of Natural History, the Botanical Gardens, the Rock and Roll Hall of Fame and Museum, the Great Lakes Science Center, the Western Reserve Historical Society (including the History Museum, the Frederick C. Crawford Auto- Aviation Museum and the Library), The Children's Museum of Cleveland and the NASA Lewis Research Center Visitor Center.
Other performing and visual arts offerings include the Beck Center, Karamu House, Fairmount Theatre of the Deaf, the Cleveland Public Theatre, the Cleveland Center for Contemporary Art and Spaces Art Gallery.
The Cleveland metropolitan area is also served by various recreational facilities. The County's location on Lake Erie and the Cuyahoga River provides a setting for many water recreation facilities and offerings, including the Cleveland Lakefront State Park (five lakeshore locations), many power and sail boat marinas and fishing piers and offshore reefs. The City's North Coast Harbor is the site of the William G. Mather Museum, the Rock and Roll Hall of Fame and Museum, the Great Lakes Science Center and the Cleveland Browns Stadium.
Also available to area residents is the Cleveland Metroparks System, a 21,000-acre, 16 recreational system called the "Emerald Necklace" because it surrounds the City, and the Cuyahoga Valley National Park, a 32,860-acre national park in the County and adjacent Summit County. The Cleveland Metroparks Zoo, which features multiple wildlife and educational exhibits, is also located in the City.
The City features the Gateway complex, consisting of Progressive Field (formerly known as Jacobs Field), the home of the Cleveland Indians, Quicken Loans Arena (formerly Gund Arena), the home of the Cleveland Cavaliers and Lake Erie Monsters, and related facilities. First Energy Stadium (formerly Cleveland Brown Stadium) is also located in the City. The City is one of only fifteen cities in the country with three major
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league sports facilities in its downtown. Original construction of the three professional sports facilities was funded, in part, with the proceeds of a Countywide excise tax on cigarettes, liquor, beer, and wine at wholesale and retail. The tax was first levied for a period of fifteen years, upon approval by voters in the County, in 1990 and was subsequently extended for a period of an additional ten years, through July 31, 2015. On May 6, 2014, voters of the County approved the renewal of the excise tax for a period of an additional twenty years to fund future capital repairs at the three sports facilities.
There are 18 hospitals located in the County, the top ten of which employ approximately 46,469 (as of September 30, 2014) full-time-equivalent employees and ∗ have a total capacity of 4,775 staffed beds in the County.
Public mass transit for the area is provided by the Greater Cleveland Regional Transit Authority.
Population
In the 2010 Census classifications, the County was in the Cleveland-Elyria-Mentor Metropolitan Statistical Area (“MSA”), which consists of Cuyahoga, Geauga, Lake, Lorain and Medina Counties. In 2010, the MSA was the 28th most populous MSA in the United States. The County was part of the Cleveland-Lorain-Elyria Primary Metropolitan Statistical Area (“PMSA”) and the Cleveland-Akron Consolidated Metropolitan Statistical Area (“CMSA”) until the U.S. Census Bureau ceased using the PMSA and CMSA distinctions in 2003. Only limited statistics are now available for the new MSA and CSA. The population of the County, the MSA and the CMSA from 1979 to 2014 are: Year County MSA(a) CMSA (c) 1970 1,720,835 2,418,809 3,098,048 1980 1,498,400 2,277,949 2,938,277 1990 1,412,140 2,202,069 2,859,644 2000 1,393,978 2,250,871 2,945,831 2010 1,280,122 2,077,240(b) 3,535,646 2012 1,266,049 2,063,535(b) 3,497,711 2013 1,263,154 2,064,725(b) 3,501,538 2014 1,259,828 2,063,598(b) 3,497,851 (a) Numbers are for the prior PMSA. In 2003, the PMSA was reclassified as an MSA excluding Ashtabula County. Comparable historical Census numbers for the new MSA are not available. (b) 2010, 2012 and 2013 population represents the current MSA. (c) The CMSA was reclassified as the Cleveland-Akron-Elyria Combined Statistical Area (“CSA”). Source: U.S. Census Bureau
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∗ Source: Crain’s Cleveland 2015 Book of Lists.
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Building Permit Values
The County's growth in the past decade is reflected, in part, in the degree of building activity in the County. The following table relating to the issuance of building permits (residential, commercial, industrial and public improvements, both remodeling and new construction) by the County since 2010 is set forth for informational purposes only.
Building Permit Values
County of Cuyahoga, Ohio
Year No. of Permits Valuation 2010 13,242 730,518,771 2011 12,806 995,071,342 2012 12,599 706,993,843 2013 13,746 922,381,200 2014 13,745 880,938,000 2015* 17,246 283,695,090 Source: County Fiscal Office
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Unemployment
The information set forth below, with respect to the County, Cleveland MSA, and others are presented in this section for informational purposes only. It should not be implied from the inclusion of such data in this Official Statement that the County is representative of Cleveland MSA, State of Ohio, or others, or vice versa.
Area Unemployment Rates Labor Force (annual percentages) (in thousands) Cleveland State of United Year County MSA Ohio States Year County 2009 9.1 8.9 10.2 9.3 2009 630.1 2010 9.2 8.9 10.0 9.6 2010 631.0 2011 8.2 7.9 8.7 8.9 2011 624.2 2012 7.6 7.4 7.4 8.1 2012 620.3 2013 7.7 7.5 7.4 7.4 2013 620.4 2014 7.3 7.0 5.8 6.3 2014 623.2 2015 5.1 4.9 4.3 5.1 2015 626.2 Source: Ohio Department of Job and Family Services,
Bureau of Labor Market Information
Notes: (1) Data is not seasonally adjusted. (2) Unemployment rate is as a percentage of the civilian labor force. (3) Data for 2015 is preliminary through September 2015.
*Projected
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Largest Employers
The following table lists the 25 largest employers in the County as of June 30, 2015.
Largest Employers County of Cuyahoga, Ohio Rank Firm Number of Industry Employees 1 Cleveland Clinic Health System 32,269 Health care provider 2 University Hospitals Health System 15,447 Health care provider 3 U.S. Office of Personnel 11,536 Federal government Management 4 Progressive Corp. 8,750 Insurance and financial company 5 Cuyahoga County 7,772 County government 6 Cleveland Metropolitan School 7,203 Education District 7 City of Cleveland 6,666 Municipal government 8 The MetroHealth System 5,839 Health care provider 9 KeyCorp 4,708 Bank holding company 10 Case Western Reserve University 4,443 Higher education 11 U.S. Postal Service 3,941 U.S. postal service 12 Swagelok Co. 3,922 Industrial manufacturer & designer 13 Giant Eagle Inc. 3,555 Multi-format food, fuel & pharmacy retailer 14 Sherwin Williams Co. 3,476 Coatings & related products 15 Lincoln Electric Co. 2,866 Industrial manufacturer & designer 16 Group Management Services, Inc. 2,520 Professional employer organization 17 Greater Cleveland Regional Transit 2,316 Public transportation Authority 18 Nestle USA 2,277 HQ for Nestle USA divisions, business services & culinary business 19 State of Ohio 2,258 State government 20 UPS 2,083 Parcel delivery 21 Rock Gaming 2,075 Horseshoe Casino & ThistleDown Racino 22 ArcelorMittal 1,947 Steel manufacturer 23 American Greetings Corp. 1,806 Creates & manufactures innovative social expression products 24 Southwest General 1,755 Health care provider 25 Medical Mutual of Ohio 1,700 Mutual company providing health and life insurance, dental, vision products, TPA services Source: Crain's Cleveland Business August 24-30, 2015
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Corporate Headquarters
The County is the location of headquarters of twelve corporations that rank among Fortune Magazine’s (2014) 1,000 largest corporations in the United States. The names of those corporations and certain information about them are set forth below. Corporations Headquartered in County Among Fortune’s Top 1000
(a) Within the 1,000 Largest U.S. Corporations Ranked by Revenues
Ran Company Revenues(b) Major Products k 157 Progressive $18,171 Insurance 217 Parker Hannifin Corp 13,016 Hydraulic Components 278 The Sherwin Williams Company 10,186 Paints & Chemicals 339 TravelCenters of America 7,963 National Travel Center 445 Cliffs Natural Resources 5,691 Mining,Ch i Crude Oil 541 KeyCorp 4,567 FinancialPdti Services 569 Aleris International 4,333 Metals 758 Lincoln Electric Holdings 2,853 Industrial Equipment 784 Medical Mutual 2,692 Health Care Insurance 794 Hyster-Yale Materials Handling 2,666 Industrial Machinery 852 Applied Industrial Technologies 2,462 Industrial Components 997 TransDigm Group, Inc. 1,924 Aircraft Components
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Personal Income
According to Census reports, the median household income in the County for the period 2009-2013 was $43,804, compared to State and national medians of $48,308 and $53,046, respectively. According to the Ohio Department of Taxation, the average federal adjusted gross income for County residents filing Ohio personal income tax returns for calendar year 2013 (the latest year for which the information is available) was $60,226, compared to the averages of $70,871 for all Ohio school districts (for all tax returns filed, the 2013 State average for tax returns that indicated school districts was $56,979). Home Values and Housing Units
The following is Census information concerning housing in the County, with comparative City and State statistics: Housing Units
2010 2014 (est.) % Change
County 621,763 618,803 -0.7% City 207,536 N/A N/A State 5,127,510 5,146,933 0.4 Source: U.S. Census Bureau Fiscal Office figures show the following numbers of sales transactions and average sales prices of residential property in the City, the suburbs in the County and the County in recent years.
City Suburbs County Number of Average Sales Number of Average Sales Number of Average Sales
Year Sales Price Sales Price Sales Price
2010 1,526 $78,226 6,721 $183,450 8,247 $160,889 2011 1,111 88,364 5,887 181,769 6,998 166,940 2012 2,433 55,800 9,483 153,943 11,916 133,141 2013 2,809 59,737 10,865 162,033 13,674 139,750 2014 3,761 54,548 12,260 153,625 16,021 129,634
Utilities, Energy and Water Resources
Water service in the County is provided primarily by the City’s Division of Water and other municipal water utilities. The County has a Lake Erie shoreline of approximately 30 miles. Lake Erie is the 12th largest lake in the world by surface area. Fresh water is available to the area for all of its foreseeable needs. Sanitary sewer service is provided by the Northeast Ohio Regional Sewer District, municipal sanitary sewer utilities and the County. The County is well served with energy sources. The principal suppliers of electric energy in the County are The Illuminating Company, a subsidiary of FirstEnergy Corporation, and Cleveland Public Power, a municipal utility operated by the City of B-21
Cleveland. The principal suppliers of natural gas are Dominion East Ohio Gas Company, Columbia Gas Company of Ohio, Inc. and Shell Energy Services Co. Local telephone service is primarily provided by AT&T (successor by merger to SBC Communications, Inc.) and wireless phone and data and cable television service is available by a number of different providers. Solid Waste Management
The Cuyahoga County Solid Waste District is one of 52 solid waste management districts created by Ohio’s counties following the passage of the Ohio Solid Waste Disposal Act in 1988. The District includes all of the territory in the County as well as a portion of the Village of Hunting Valley in neighboring Geauga County. The Ohio Environmental Protection Agency (“Ohio EPA”) approved a solid waste management plan for the District in 1994 under which the District is responsible for solid waste management activities previously undertaken by the County. An update to that plan, reflecting projected needs and solutions for a 15-year period, was ratified by 96% of the local legislative bodies in the District and approved by the Ohio EPA in 2000. Solid waste collection, disposal and recycling services in the County generally are provided by municipalities and private providers. The Solid Waste Management District provides collections for special waste, including phone books, household hazardous waste, scrap tires, computers and mercury.
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COUNTY TAX BASE
THE FOLLOWING SUMMARY INFORMATION REGARDING THE COUNTY IS PRESENTED FOR GENERAL INFORMATION PURPOSES, AND IT IS NOT THE BASIS ON WHICH THE SERIES 2015 BONDS ARE BEING OFFERED TO INVESTORS. THE SERIES 2015 BONDS ARE PAYABLE SOLELY FROM THE COUNTY EXCISE TAX RECEIPTS AND NOT ON THE BASIS OF THE FINANCIAL STRENGTH OR PROPERTY TAX BASE OF THE COUNTY.
Ad Valorem Taxes and Assessed Valuation
Overview
For property taxation purposes, assessment of real property is performed on a calendar year basis by the County Fiscal Officer subject to supervision by the State Tax Commissioner (the "Tax Commissioner"), and assessment of public utility property and tangible personal property is performed by the Tax Commissioner. Property taxes are billed and collected by the County Treasurer.
Taxes collected from real property (other than public utility) in one calendar year are levied in the preceding calendar year on assessed values as of June 1 of that preceding year. Taxes collected from tangible personal property (other than public utility) in one calendar year are levied in the same calendar year on assessed values during and at the close of the most recent fiscal year of the taxpayer that ended on or before December 31 of that calendar year, and at the tax rates determined in the 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 that second year preceding the tax collection year.
Real Property
The "assessed valuation" of real property is fixed at 35% of true value and is determined pursuant to rules of the Tax Commissioner, except that real property devoted exclusively to agricultural use is assessed at not more than 35% of its current agricultural use value. Beginning in 2008, certain elderly or disabled resident homeowners may receive a flat $25,000 property tax exemption on the market value of their homestead.
Ohio law requires the County Fiscal Officer, subject to supervision by the Tax Commissioner, to adjust the true value of taxable real property every six years to reflect current fair market values. This "sexennial reappraisal" is done by individual appraisal of properties. In the third year following a sexennial reappraisal, the County Fiscal Officer, again subject to supervision by the Tax Commissioner, performs a "triennial update" to adjust the value of taxable real property to reflect true values. The triennial update is done without individual appraisal of properties, but with reference to a sales-assessment ratio over the three-year period. In 2012 the Fiscal Officer adjusted the true value of all real property in the County to reflect current fair market values as of January 1, 2012. These adjustments were reflected in the 2012 duplicate (collection year 2013) and in the ad valorem taxes distributed to the County in 2013 and thereafter. The Fiscal Officer is required to adjust (but without individual appraisal of properties except in the sexennial reappraisal), and has adjusted, taxable real property value triennially to reflect true values. Such triennial adjustment was made in 2015 and first reflected in the 2015 duplicate (collection year 2016). B-23
Based on reappraisal, the true value of taxable real property in the County is expected to increase by approximately 0.7% for tax year 2015 (collection year 2016). The County will receive an estimated $2.7 million more in ad valorem property tax revenues in 2015 because of the reappraisal.
Personal Property
In 2005, the State accelerated its phase-out of the tangible personal property tax so that after calendar year 2011, general business tangible personal property is no longer taxed.
The State has been reimbursing municipalities for tax losses resulting from the phase- out of the tangible personal property tax. (See "State Reimbursement of Property Tax Revenues – Public Utility Property and Tangible Personal Property Tax Loss Reimbursement.") Recent legislation reduced and hastened the elimination of existing reimbursement payments beginning with calendar year 2011.
Delinquency Procedures
The following is a general description of property tax delinquency procedures under Ohio law. The implementation of these procedures may vary in practice among Ohio counties. If real estate taxes and special assessments are not paid in the year in which they are due, they are to be certified by the County Fiscal Officer's office as delinquent. A list of current delinquent properties is then to be published in a newspaper of general circulation in the County. If the delinquent taxes and special assessments are not paid within one year after such certification, the properties are then also to be certified as delinquent to the Prosecuting Attorney. Five percent (5%) of all certified delinquent taxes and assessments collected by the County Treasurer is deposited in a special fund to be divided between the County Treasurer and the Prosecuting Attorney to be used solely for the collection of delinquent real property taxes and assessments. If the property owner so requests, a payment plan may be arranged with the County Treasurer. If such a payment plan is not adhered to or none is arranged, foreclosure proceedings may be initiated by the County. Ohio law also provides for notice by publication and mass foreclosure proceedings and sales after two years' delinquency. Proceeds from foreclosure sales of delinquent property become part of the current collection and are distributed as current collections to the taxing or assessing subdivisions in the County.
If personal property taxes are not paid at the time they are due, they are to be certified by the County Fiscal Officer's office as delinquent. Annually on December 1, one copy of the list of delinquent taxes is given to the County Treasurer, who is required to prepare and mail a bill for the taxes to the property owner. A second copy of the list is to be published in a newspaper of general circulation in the County. A third copy of the list is to be provided to the County Recorder, at which time it becomes a notice of lien for the taxes on the real and personal property of the property owner. If the property owner so requests, a payment plan may be arranged with the County Treasurer for delinquent personal property taxes.
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In collecting the delinquent personal property taxes, the County Treasurer may employ collectors. The County Treasurer may also collect the taxes by civil suit in the county court of common pleas, or may seize property of the taxpayer and, after notice, sell the property at public sale. [Balance of Page Intentionally Left Blank]
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State Reimbursement of Property Tax Revenues
Rollback and Homestead Exemption Reimbursement
The State reimburses taxing districts, including counties, for decreased tax revenues due to (a) the 10% reduction or "rollback" in certain non-commercial property taxes, (b) the 2-1/2% reduction applicable to certain owner-occupied housing, and (c) the flat, $25,000 reduction in taxable value applicable to certain elderly or disabled homeowners. Such reimbursements are subject to repeal or revision by the State.
A phase out of these reductions began in 2013. The 10% reduction for residential and agricultural properties and 2-1/2% additional reduction for owner-occupied residential property do not apply to new levies and replacement levies approved by voters after the August 6, 2013 election. Additionally, starting in the 2014 tax year, the $25,000 reduction in taxable value for certain elderly homeowners and homeowners with disabilities is being grandfathered out, with new reductions limited to property owners with total income less than or equal to $30,000. This figure is adjusted for inflation annually by the Tax Commissioner.
Public Utility Property and Tangible Personal Property Tax Loss Reimbursement
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. Recent legislation established thresholds for receipt of those payments similar to the thresholds discussed above for compensation for forgone tangible personal property taxes, except that reimbursement payments for debt purposes within the 10-mill limitation would end after 2016. The State’s reimbursement payment to the County in Fiscal Year 2013 was $6.6 million, and the County received approximately $6.6 million from the State in Fiscal Year 2014. Commencing in tax year 2006, the assessment rate for electric utility transmission and distribution equipment was reduced from 88% to 85%, and the assessment rate for all electric company taxable property was reduced from 25% to 24%. As described herein, 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 voted levies to pay debt charges on general obligation debt. Ohio law authorizes local municipalities, townships and counties to provide direct tax incentives in the form of real personal property tax exemptions to encourage new business investment projects and foster improved competitiveness of Ohio’s businesses that create new and retain existing job opportunities in “enterprise zones.” Twenty-six municipalities have created such areas within the County and require County approval for exemption B-26
agreements. The cities of Cleveland and East Cleveland have also created such areas, but do not need prior County approval for their exemption agreements. Municipal corporations and counties may create “community reinvestment areas” in which ad valorem tax abatement may be granted for any increased property valuation resulting from improvements to real property in the form of new construction or remodeling of existing structures by the property owner. In such areas, residential, commercial or industrial facilities are eligible for those real property tax incentives. This program is designed to be controlled at the local level by the local legislative body, including control over the size and number of such “community reinvestment areas” as well as the number of years of tax abatement. Currently, there are 42 community reinvestment areas in the County. The County does not believe that the creation of “enterprise zones” and “community reinvestment areas” has had or will have a material adverse effect on the County’s finances. In 2005, the State accelerated its phase-out of the tangible personal property tax so that after calendar year 2011, general business tangible personal property is no longer taxed. The reimbursement of both types of tangible personal property tax revenue losses were scheduled to phase out by calendar year 2018. Instead, recent legislation generally accelerates the phase-out and reduces payments, depending on the type of levy.
For fixed-rate levies, the reimbursement amounts for calendar year 2010 are compared to the "total available resources" of a taxing district. Total available resources includes: tangible personal and public utility property tax reimbursements; the taxing district's share of local government fund revenues for calendar year 2010; the current expense real and public utility taxes charged and payable for tax year 2009; any admissions tax collections in calendar year 2008; income tax collections for calendar year 2008; and its median estate tax distribution for the period 2006 through 2009.
If a taxing district's reimbursement payments are less than the threshold percentage for a year, then no further reimbursement is made; if the reimbursement payments exceed the threshold percentage, then the taxing district receives the amount in excess of the percentage. For calendar year 2011, the threshold percentage is 2%; for 2012, the percentage threshold is 4%, and for 2013 the percentage is 6%. As presently formulated, that reimbursement will continue indefinitely.
For fixed sum and unvoted debt levy losses, amounts will continue to be reimbursed (less the amount attributed to one-half mill) so long as the levy continues to be imposed for fixed-sum levy purposes, and so long as the levy continues to be imposed for debt purposes until 2018, in the case of unvoted debt levies. Fixed rate levies for purposes other than current expenses are reduced by 25% over 2010 reimbursement levels for calendar year 2011; they are reduced 50% for calendar year 2012; and reduced by 75% for calendar year 2013 and thereafter.
For additional information and a chart prepared by the Ohio Department of Taxation illustrating the amount of reimbursements for future years, go to http://tax.ohio.gov/channels/government/phase_out.stm.
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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 following are the rates at which the County and the overlapping taxing subdivisions levied ad valorem property taxes for tax year 2014 (collection year 2015).
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TAX TABLE A Tax Rates Within the County
Effective Real Property Tax Rate Taxing District School District Total Rate(a) Res./Agr.(b) All Other(b)
Bay Village Bay Village 155.14 93.74 101.38 Beachwood Beachwood 113.83 69.25 76.30 Beachwood Warrensville Heights 119.23 91.78 97.05 Bedford Bedford 120.85 89.86 99.32 Bedford Heights Bedford 121.05 90.06 99.52 Bedford Heights Orange 136.43 92.88 99.03 Bentleyville Chagrin Falls 147.63 85.17 95.04 Berea Berea 121.33 83.22 90.68 Berea Olmsted Falls 143.83 94.21 94.37 Bratenahl Cleveland 123.13 95.45 103.94 Brecksville Brecksville 110.64 73.60 77.43 Broadview Heights Brecksville 112.83 73.30 77.53 Broadview Heights North Royalton 101.53 75.20 75.30 Brooklyn Brooklyn 91.93 83.40 80.44 Brooklyn Heights Cuyahoga Heights 65.53 59.74 62.33 Brook Park Berea 109.28 75.19 82.03 Brook Park Cleveland 111.88 84.18 92.62 Chagrin Falls Township Chagrin Falls 139.93 78.85 87.34 Chagrin Falls Village Chagrin Falls 148.43 86.98 95.84 Cleveland Cleveland 119.83 92.15 100.64 Cleveland Heights Cleveland Hts. - Univ. Hts. 194.44 123.96 136.89 Cleveland Heights East Cleveland 135.95 91.28 115.70 Cleveland Berea 117.23 83.16 90.06 Cleveland Shaker Heights 224.46 136.69 164.55 Cuyahoga Heights Cuyahoga Heights 65.53 59.74 62.33 East Cleveland East Cleveland 134.73 90.06 114.48 Euclid Euclid 141.73 109.73 125.53 Fairview Park Fairview Park 134.10 94.45 99.33 Fairview Park Berea 116.33 82.07 89.10 Fairview Park Rocky River 128.38 87.16 102.85 Garfield Heights Garfield Heights 133.69 126.65 122.21 Garfield Heights Cleveland 134.33 106.65 115.14 Gates Mills Mayfield 121.95 83.96 88.85 Glenwillow Solon 108.93 76.40 86.57 Highland Hills Village Warrensville Heights 135.93 105.85 104.06 Highland Heights Mayfield 111.55 74.94 78.45 Hunting Valley Orange 119.63 76.08 82.23 Independence Independence 63.43 61.99 63.36 Lakewood Lakewood 165.06 107.49 121.93 Linndale Brooklyn 109.93 82.25 90.74 Lyndhurst South Euclid – Lyndhurst 142.53 101.90 100.65 Maple Heights Maple Heights 127.13 111.80 109.71 Mayfield Heights Mayfield 117.55 80.94 84.45 Mayfield Village Mayfield 114.85 75.16 79.02 Middleburg Heights Berea 109.98 75.17 82.24 Moreland Hills Chagrin Falls 146.03 84.95 93.44 Moreland Hills Orange 121.83 78.28 84.43 Newburgh Heights Cuyahoga Heights 138.93 111.25 118.58 North Olmsted North Olmsted 136.03 99.81 102.92 North Olmsted Olmsted Falls 141.33 95.75 95.34 North Randall Warrensville Heights 120.03 92.24 97.71 North Royalton North Royalton 99.33 73.34 73.80 North Royalton Brecksville 110.63 71.44 76.03 Oakwood Bedford 102.95 71.96 81.42 B-29
Effective Real Property Tax Rate Taxing District School District Total Rate(a) Res./Agr.(b) All Other(b)
Olmsted Falls Olmsted Falls 141.38 93.04 92.60 Olmsted Falls Berea 117.88 81.06 87.92 Olmsted Township Olmsted Falls 155.53 100.45 101.27 Orange Orange 121.63 78.08 84.23 Orange Warrensville 122.33 94.88 100.15 Parma Parma 106.54 85.64 87.83 Parma Heights Parma 108.94 88.04 90.28 Pepper Pike Orange 124.03 80.48 86.33 Pepper Pike Beachwood 119.33 74.75 81.50 Richmond Heights Richmond Heights 129.43 90.95 90.75 Richmond Heights South Euclid – Lyndhurst 149.13 106.14 104.99 Rocky River Rocky River 127.48 86.45 102.00 Seven Hills Parma 110.14 89.24 91.48 Shaker Heights Shaker Heights 221.66 133.89 161.75 Solon Solon 109.43 76.77 87.03 Solon Orange 118.33 74.66 80.90 South Euclid South Euclid – Lyndhurst 147.38 106.75 105.41 South Euclid Cleveland Heights – Univ. Hts. 196.87 126.39 139.23 Strongsville Strongsville 117.41 75.45 77.49 University Heights Cleveland Hts. - Univ. Hts. 193.72 123.24 136.17 Valley View Cuyahoga Heights 67.83 62.04 64.63 Walton Hills Bedford 99.45 68.46 77.92 Warrensville Heights Warrensville Heights 124.93 94.22 99.93 Warrensville Orange 124.23 77.42 84.01 Westlake Westlake 103.35 70.55 74.00 Woodmere Orange 118.83 75.28 81.43 (a) Includes County-wide levies for the County, the Cleveland Metropolitan Park District, the Cuyahoga Community College District and the Cleveland-Cuyahoga County Port Authority, as well as levies for particular municipalities or townships, school districts, libraries and joint vocational school districts. (See “TAX TABLE B” that follows for a breakdown of the County and County-wide levies.)
(b) Effective real property tax rate after application of tax credits described below.
Statutory procedures limit, by the application of tax credits, the amount realized by each taxing subdivision from real property taxation to the amount realized from those taxes in the preceding year plus both: • The proceeds of any new taxes (other than renewals) approved by the electors, calculated to produce an amount equal to the amount that would have been realized if those taxes had been levied in the preceding year. • Amounts realized from new and existing taxes on the assessed valuation of real property added to the tax duplicate since the preceding year. The tax credit provisions do not apply to amounts realized from taxes levied at a rate required to produce a specified amount, such as for debt service on voted general obligation debt, or from taxes levied inside the ten-mill limitation or any applicable charter tax rate limitation. To calculate the reduced amount to be realized, a reduction factor is applied to the stated rates of the tax levies subject to these tax credits. A resulting “effective tax rate” reflects the aggregate of those reductions, and is the rate at which real property taxes are in fact collected. As an example, the total overlapping tax rate of 119.83 mills for the 2015 tax collection year for the City of Cleveland-Cleveland Municipal School District is reduced by a reduction factor of 0.230976 or 27.68 mills for both residential and agricultural property and a reduction factor of 0.160145 or 19.19 mills for all other real property, which results in “effective tax rates” of 92.15 mills for residential and agricultural property and 100.64 mills for all other real property. See “TAX TABLE A.” B-30
Real property tax amounts are generally further reduced by an additional 10% (12.5% in the case of owner-occupied residential property). The State biennial budget approved in 2005 bill eliminates the 10% “rollback” for certain commercial and industrial real property (while it remains for all other real property), effective for the 2006 tax collection year and thereafter. See “Collections” for a discussion of the reimbursement by the State for this reduction. The following are the rates at which the County levied property taxes for the general categories of purposes in recent years both inside and outside the ten-mill limitation:
TAX TABLE B County Property Tax Rates – Voted and Unvoted(a)
Unvoted Levies Within Voted Levies Outside 10-Mill Limitation 10-Mill Limitation Total County Health and Voted Collection General Bond Unvoted Bond Human Developmental Voted and Year Fund Retirement Total Retirement Services Disabilities Total Unvoted
2010 0.90 0.55 1.45 0.27 7.70 3.90 11.87 13.32 2011 0.58(b) 0.87(b) 1.45 0.27 7.70 3.90 11.87 13.32 2012 0.60 0.85 1.45 0.17 7.70 3.90 11.77 13.22 2013 0.60 0.85 1.45 0.17 7.70 3.90 11.77 13.22 2014 0.60 0.85 1.45 0.00 8.70 3.90 12.60 14.05 2015 0.60 0.85 1.45 0.00 8.70 3.90 12.60 14.05
(a) County-wide property taxes are also levied on behalf of certain major political subdivisions or governmental entities as shown below for tax collection year 2015:
Cleveland Metropolitan Park District – 2.75 Cuyahoga Community College District – 4.00 Cleveland-Cuyahoga County Port Authority – 0.13 Cuyahoga County Library – 2.50
(b) Amounts levied reflect, in part, a temporary reduction in debt service levy requirements due to a transfer of unspent bond proceeds to the Bond Retirement Fund and a resulting temporary increase in millage available to the General Fund.
In the budget proposed by the County Executive for the Fiscal Years 2016 and 2017, the levy for the General Fund would be reduced to 0.50 and the levy for the Bond Retirement Fund would be increased to 0.95. See the discussion of the ten-mill limitation, and the priority of claim on that millage for debt service on unvoted general obligation debt, under “COUNTY DEBT AND DEBT LIMITATIONS – Indirect Debt Limitations.” Only cities, villages, school districts, townships and regional transit authorities may, as may the County, levy ad valorem property taxes within the ten-mill limitation (subject to available statutory allocation of the 10 mills). [Balance of Page Intentionally Left Blank]
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Assessed Valuation
The following table classifies the County's assessed valuation of taxable property according to use:
Assessed Valuation County of Cuyahoga, Ohio
(2015 Collection Year) Percent of Property Classification Amount Total Assessed Valuation Real Estate1 Residential/Agricultural $18,473,813,110 66.60% Commercial/Industrial/Mineral 8,336,875,110 30.10 Public Utility Real 27,901,090 0.10 Total Real Estate $26,838,589,310 96.80% Personal Property2 General $ 0 0.00% Public Utility Personal 894,863,800 3.20 Total Personal 894,863,800 3.10% Total Assessed Valuation $27,733,453,110 100.00% Source: County Fiscal Office
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1 Real property taxes collected in a calendar year are levied in the preceding calendar year on assessed values as of January 1 of that preceding year. Real property is assessed at 35% of market value and reappraised every six years, with triennial updates every three years.
2 Tangible personal property taxes collected in a calendar year are levied in the same calendar year, on assessed values during and at the close of the most recent fiscal year of the taxpayer (ending on or before March 30 of said calendar year) at tax rates determined in the preceding year.
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The assessed valuation of taxable property over the previous six years is set forth below:
Assessed Valuation
County of Cuyahoga, Ohio Percentage Tax Increase Over Collection Public Utility Total Prior Year Year Real Estate1 Personal Property2, 1 Assessed Valuation 20102 $28,979,204,900 $654,490,330 $29,633,695,230 -5.92% 2011 29,153,170,350 673,170,690 29,826,341,040 0.65 2012 29,098,596,030 698,069,260 29,796,665,290 -0.10 20133 26,894,042,740 758,430,350 27,652,473,090 -7.20 2014 26,853,970,910 840,870,540 27,694,841,450 0.15 2015 26,838,589,310 894,863,800 27,733,453,110 0.14 Source: County Fiscal Office
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1 Estimated by the Cuyahoga County Fiscal Office 2 Year of triennial update 3 Year of sexennial reappraisal
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Largest Assessed Values
The following tables list the owners of the real estate and public utility properties with the highest assessed valuation in the County. Percentages of total assessed valuation are based on a total assessed valuation of $27,733,453,110 for collection year 2015. Largest Assessed Values County of Cuyahoga, Ohio (2015 Collection Year)
Real Estate Taxpayers Percent of County's Total Assessed Assessed Name Type of Business Valuation Valuation 1. Cleveland Clinic Foundation Health Care $249,855,260 0.9% 2. County of Cuyahoga Government 154,466,450 0.6 3. City of Cleveland Government 111,535,720 0.4 4. Key Center Properties LLC Hotel & Office Real Estate 80,559,150 0.3 5. Southpark Mall LLC Retail Real Estate 73,292,270 0.3 6. Beachwood Place LTD Retail Real Estate 65,324,350 0.2 7. University Health Systems, Health Care 62,776,320 0.2 Inc. 8. Progressive Insurance Insurance 61,008,580 0.2 9. Eaton Corporation Global Technology 53,413,820 0.2 10. PNC Corporation (formerly Banking 47,637,190 0.2 National City Bank) Source: County Fiscal Office
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Public Utility Taxpayers Percent of County's Total Assessed Assessed Name Type of Business Valuation Valuation The Illuminating Company Electric Utility $650,623,090 2.3% East Ohio Gas Gas Utility 112,521,960 0.4 American Transmission Electric Utility 94,687,700 0.3 Columbia Gas of Ohio, Inc. Gas Utility 26,240,500 0.1 Source: County Fiscal Office
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The following are the stated rates at which the County levied ad valorem property taxes for the general categories or purposes indicated.
County-Wide Property Tax Levies - Voted and Unvoted (Expressed in Mills per $1.00 of Valuation) Collection Year 2015 County of Cuyahoga, Ohio Rate Levied for Beginning Collection Year Year of Election Year of Final Year Fund 2015 Collection of Collection General 0.60 N/A (Inside) ------Bond Retirement 0.85 N/A (Unvoted) Board of Developmental Disabilities 3.90 2005 2006 Continuing Mental Health & Welfare 4.80 2008 2009 2016 Health Services 3.90 2013 2014 2018 Total 14.05 Source: Ohio Department of Taxation and County Fiscal Office
See the discussion of the ten-mill unvoted tax limitation, and the priority of claim thereon for debt service on unvoted general obligation debt of the County and all overlapping taxing subdivisions, under "COUNTY DEBT AND DEBT LIMITATIONS – Statutory Debt Limitations Generally" herein. See also TAX TABLE B.
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Collection of Ad Valorem Property Taxes and Special Assessments
The following are the amounts billed and collected for County ad valorem property taxes for recent tax collection years. “Billed” includes current charges, plus current and delinquent additions and less current and delinquent abatements. “Collected” includes collections of current “Billed” and of current and delinquent additions. “Current % Collected” is the percentage of current charges billed which is collected in the collection year billed. The figures shown include amounts for County property tax levies only, and do not include any County-wide property taxes levied on behalf of other political subdivisions or governmental entities, such as the Cleveland Metropolitan Park District, the Cuyahoga Community College District or the Cleveland-Cuyahoga County Port Authority.
Ad Valorem Property Tax Collections and Delinquencies (Real Estate/Public Utility) County of Cuyahoga, Ohio % of % of Current Current Delinquent Total Total Taxes Collection Current Taxes Taxes Taxes Taxes Taxes Collected to Year* Levied Collected Collected Collected Collected Current Levy 2009 $396,656,766 $366,755,483 92.46% $16,014,399 $382,769,882 96.50% 2010 390,025,025 357,309,084 91.61 16,268,732 374,811,808 96.10 2011 391,054,735 356,161,963 91.07 15,269,151 371,431,114 94.98 2012 389,234,859 351,405,833 90.28 18,625,846 370,031,679 95.07 2013 364,260,628 334,506,534 91.83 15,389,021 349,895,555 96.06 2014 390,158,164 353,768,300 90.67 15,749,553 369,517,852 94.71 Source: County Fiscal Office
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Budgeting, Tax Levy and Appropriations Procedure
The Revised Code contains detailed provisions regarding County budgeting, tax levy and appropriation procedures.
The law generally requires that a subdivision prepare, and then adopt after a public hearing, a tax budget approximately six months before the start of the next Fiscal Year. The tax budget is then presented for review by the County Budget Commission. However, a County Budget Commission may either waive the requirement for a tax budget or permit an alternative form of tax budget with more limited information. In 2002, the Cuyahoga County Budget Commission voted to waive the requirement of preparing and adopting a tax budget for future Fiscal Years and prescribed an alternative form of a tax budget information document that continues to be used by the County and other subdivisions in the County.
Under current requirements, County budgeting for each Fiscal Year formally begins in July with the preparation and submission to the County Budget Commission of tax budget information for the following Fiscal Year. Among other items, the tax budget must show the amounts required for debt service, the estimated receipts for payment from sources other than ad valorem property taxes and the net amount for which an ad valorem property tax levy must be made, and the portions of the levy to be inside and outside the ten-mill limitation. The tax budget then is presented for review by the Budget Commission. The Budget Commission holds a public hearing, reviews the budget and issues the Certificate of Estimated Resources which is the basis for County appropriations and expenditures for the coming fiscal year (which is the calendar year).
Upon approval of the tax budget and issuance of the Certificate of Estimated Resources, the County Budget Commission certifies its actions to the Council together with the approved tax rates. Thereafter, and before October 1 of each year, the Council levies the approved taxes and certifies them to the proper County officials. The approved and certified tax rates are reflected in the tax bills sent to property owners during the collection year. Real property taxes are payable on a calendar year basis in arrears, generally in two installments with the first due usually in January and the second due in June or later.
Under the Charter, the County Executive is to submit a proposed operating budget to County Council prior to the start of the next fiscal year. In accordance with State law, the Council must adopt a permanent appropriation measure for a Fiscal Year by April 1 and may adopt a temporary appropriation measure for the Fiscal Year to provide for expenditures from January 1 until the permanent appropriation measure is adopted. The County has maintained a policy of adopting the budget before the end of the current fiscal year.
The Council adopted an ordinance (O2011-0036) on September 13, 2011, establishing a biennial operating and capital budget process. The first such biennial budget covered the 2012- 2013 fiscal period and was adopted by Council on December 16, 2011. The biennial budget process calls for a mid-biennium update of the second year of the budget. The County Council adopted the required update to the biennial for Fiscal Year 2013 in December 2012. The second biennial budget covered the 2014-2015 fiscal period and was adopted by Council on December 10, 2013. The County Executive submitted a recommended budget to County Council for biennial budget year 2016 – 2017. While the budget as submitted to Council will likely not be identical to the County Executive’s recommended budget, the County expects the final biennial budget to be approved by County Council by the end of 2015. Both the biennium
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budget and the update are final annual appropriation measures. Although called "permanent," the appropriation measure may be, and often is, amended during the Fiscal Year. Annual appropriations may not exceed the County Budget Commission's official estimates of resources, and the County Fiscal Officer is to certify that the County's appropriation measures do not appropriate moneys in excess of the amounts set forth in those estimates.
Investment of Funds
According to the County Treasurer, all moneys of the County, specifically moneys in the general fund, the bond retirement fund, and all project funds containing proceeds of any debt issuances of the County, are presently or will be deposited and invested in accordance with the requirements of Ohio law, and in particular the Uniform Depository Act. Under Revised Code Section 135.31, the County may deposit active moneys, which are moneys deposited in public depositories and determined to be necessary to meet current demands on the treasury, in (i) a commercial account and withdrawable in whole or in part on demand, (ii) a negotiable order of withdrawal account as authorized in the Consumer Checking Account Equity Act of 1980, and (iii) a money market deposit account as authorized in the Garn-St. Germain Depository Institutions Act of 1982.
The County's investment of inactive moneys, which are moneys in excess of the amount determined to be needed as active moneys, is governed by Revised Code Section 135.35. Pursuant to Section 135.35, a county may deposit or invest any part or all its inactive moneys in (i) United States Treasury bills, notes or bonds issued by the United States treasury, (ii) bonds, notes or debentures issued by any federal government agency or instrumentality, (iii) time certificates of deposit or savings or deposit accounts, (iv) bond or other obligations of the State or political subdivisions of the state, (v) no-load money market mutual funds, (vi) the Ohio subdivision's fund established under Section 135.45 ("STAR Ohio"), (vii) securities lending agreements, (viii) commercial paper, (ix) bankers acceptances, (x) written repurchase agreements, and (xi) certain debt interests. The permitted investments described above are subject to certain restrictions as set forth under Section 135.35. Except in certain circumstances, investments of the County's inactive moneys must mature within five years from the date of investment.
All investments of the County, except for investments in securities in no-load money market mutual funds, and STAR Ohio, must be made through members of the National Association of Securities Dealers, Inc., banks, savings banks, or savings and loan associations regulated by the State superintendent of financial institutions or through institutions regulated by the comptroller of the currency, Federal Deposit Insurance Corporation, or board of governors of the Federal Reserve System.
Certain investment practices remain exclusive to those fiscal officers who have completed additional training and approved by the Auditor of State in accordance with the Uniform Depository Act. Further, counties are required to have a written investment policy on file with the Auditor of State pursuant to Revised Code Section 135.35. Absent such a policy, a county is restricted to investing inactive moneys in (i) time certificates of deposit or savings or deposit accounts, (ii) no-load money market mutual funds, and (iii) STAR Ohio. The County currently has a written investment policy on file with the Auditor of State. Additionally, County Council passed ordinance number 02014-0021 on October 14, 2014 to establish guidelines for the County's investment policy and financial reporting requirements. The
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ordinance requires the Office of Budget and Management to submit a public presentation to Council on the budget not later than March 31.
As of May 31, 2015, the County's $880.8 million investment portfolio was invested as follows: $108.7 million in STAR Ohio and available on one day's notice; $22.1 million in collateralized or FDIC-guaranteed certificates of deposit; $8.0 million in foreign notes, $470.3 million in noncallable U.S. Agency Obligations maturing in 2015 through 2018; $90.0 million in callable U.S. Agency Obligations maturing in 2017 to 2018; $109.7 million in U.S. Treasury Notes and Bonds; $71.9 million in non-interest-bearing demand deposits. Although the particular components of the portfolio will necessarily change from time to time as investments mature and money is reinvested, the County does not expect those components or the duration of its investment portfolio to vary materially in the foreseeable future.
OTHER MAJOR COUNTY GENERAL FUND REVENUE SOURCES
Described under this caption are major sources of revenue to the County's General Fund in addition to ad valorem taxes. See the County's Audited Financial Statements for the Fiscal Year ending December 31, 2014 attached hereto as APPENDIX C for further information regarding other sources of revenue for the General Fund and other funds. Permissive Taxes
State law authorizes counties to levy certain permissive taxes (sales and use, real property transfer, motor vehicle license and utilities services) without a vote of the people, subject to repeal by referendum (if the resolution levying the tax is not enacted as an emergency measure) or subject to repeal by initiative (if the resolution is adopted as an emergency measure). Any referendum or initiative is held only if requested by a petition signed by a specified percentage of voters and filed timely and in appropriate form. Council may also submit the question of levying these taxes to a vote of the electors and, if approved at an election, they are not thereafter subject to repeal by voter-initiated action. The County currently has in effect a sales and use tax, which became effective in 1969 and was increased in 1987 and again in 2007, and a real property transfer tax and fee, which became effective in 1985, both of which provide revenues for the County’s General Fund. See “County Sale and Use Tax” below for additional information on sales and use tax. The County also currently has in effect a motor vehicle license tax, in the amount of $15 per vehicle. The proceeds of that tax are required to be used for the construction, maintenance and repair of streets and highways, including bridges. The County has not yet exercised its option to impose a utility service tax. County Sales Tax
The County currently levies a 1.25% sales and use tax, 0.5% of which is imposed pursuant to resolutions adopted by the Board in 1969, 0.5% of which is imposed pursuant to resolutions adopted by the Board in 1987 and 0.25% of which is imposed pursuant to resolutions adopted by the Board in 2007. The 0.5% portions of the sales and use tax authorized in 1969 and 1987 are in effect for a continuing period of time and the 0.25% portion authorized in 2007 is in effect for a period of 20 years ending in 2027. No portion of this sales and use tax is now subject to repeal by referendum or initiative. The tax is collected by the State and distributed monthly to the County. The County’s sales and use tax receipts for the past five Fiscal Years and projected receipts for Fiscal Year 2015, rounded to the nearest $1,000, are shown below: B-40
County Sales Tax Revenues
County of Cuyahoga, Ohio Year Rate Amount Collected 2010 1.25 $204,063,000 2011 1.25 216,589,000 2012 1.25 226,787,000 2013 1.25 237,307,000 2014 1.25 246,767,000 2015* 1.25 259,270,000 Source: County Fiscal Office
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*Projected
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Real Property Transfer Tax
The County currently levies a 3.0 mill real property transfer tax, an unvoted tax that was enacted in 1985 pursuant to a resolution of the Board. That tax is in addition to the 1.0 mill real property transfer fee imposed by State law. The County's real property transfer tax is not subject to repeal or reduction by referendum or initiative. Recent receipts and projected receipts for Fiscal Year 2015 for the Real Property Transfer Tax, rounded to the nearest $1,000, are provided in the table below.
Real Property Transfer Tax Revenues
County of Cuyahoga, Ohio Year Amount 2010 $7,376,000 2011 7,042,000 2012 8,816,000 2013 9,573,000 2014 10,488,000 2015* 10,180,000 Source: County Fiscal Office
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Local Government Fund
The Ohio local government fund was created by statute and is comprised of designated State revenues which are distributed to each county and then allocated among the County and cities, villages and townships in the County on the basis of statutory formulas. The County's portions of local government fund receipts in recent years, and projected receipts for Fiscal Year 2015 rounded to the nearest $1,000, are provided in the table below.
Local Government Fund Revenues County of Cuyahoga, Ohio Year Amount 2010 $33,544,000 2011 38,704,000 2012 22,990,000 2013 17,367,000 2014 17,186,000 2015* 18,664,000 Source: County Fiscal Office
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Nontax Revenues
The County has issued obligations to which it has pledged its Nontax Revenues. See “OTHER LONG TERM OBLIGATIONS OF THE COUNTY - Non-Tax Revenue Obligations” below for a further description of such obligations. The Nontax Revenues included all moneys of the County which are not moneys raised by taxation, to the extent available for payment of the debt service on such obligations, including but not limited to the following: (a) charges for services and payments received in reimbursement for services; (b) payments in lieu of taxes now or hereafter authorized by State statute; (c) fines and forfeitures; (d) fees from properly imposed licenses and permits; (e) investment earnings on any funds of the County that are credited to the County’s General Fund; (f) proceeds from the sale of assets; (g) rental income; (h) grants from the United States of America and the State; and (i) gifts and donations. The most significant amounts of Nontax Revenues are derived from charges for services, investment earnings, intergovernmental grants and reimbursements, fines and forfeitures and licenses and permit fees. [Balance of Page Intentionally Left Blank]
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The following table summarizes historical collections for the past five years, and projected collections for Fiscal Year 2015, of certain of the more significant sources of funds identified by the County from its General Fund as Nontax Revenues (rounded to the nearest $1,000).
Charges for Investment Inter- Fines and (b) (c) Year Services(a) Earnings governmental Forfeitures Other Total 2010 $38,126,000 $18,040,000 $9,023,000 $11,073,000 $17,781,00 $94,043,000 2011 36,947,000 12,526,000 8,533,000 9,654,000 10,618,000 78,278,000 2012 44,339,000 6.638.000 9,182,000 9,376,000 5,340,000 74,874,000 2013 47,187,000 - 0 - 7,817,000 9,389,000 7,364,000 71,756,000 2014 50,558,000 447,000 9,218,000 10,634,000 13,510,000 84,368,000 6,336,000 80,205,000 2015* 50,031,000 4,101,000 10,045,000 9,672,000
(a) Includes real property transfer fees of $2,231,000 in 2010, $2,347,464 in 2011, $2,938,745 in 2012, $3,191,000 in 2013, and $3,496,000 in 2014, and $3,393,000 in 2015. (b) Intergovernmental revenue excludes Local Government Fund allocations and State property tax reimbursement revenues. (c) Includes one-time revenue of $9.6 million in 2010 from a legal settlement and a restitution payment of $3.6 million in 2011.:
The table above does not include Nontax Revenues received by the County for specific projects which Nontax Revenues are to be used solely to pay all or a portion of the debt service on specific Nontax Revenues Bonds of the County. See “COUNTY DEBT AND DEBT LIMITATIONS -- Other Long Term Obligations of the County -- Nontax Revenue Obligations” herein.
COUNTY DEBT AND DEBT LIMITATIONS
Statutory Debt Limitations Generally
The County may issue voted general obligation bonds, and notes issued in anticipation thereof, pursuant to a vote of the electors of the County. Ad valorem taxes, without limitation as to amount or rate, assessed to pay debt service on voted bonds are authorized by the electors at the same time they authorize issuance of such voted debt. Such voted debt is subject to the direct debt limitations but is not subject to the indirect debt limitation. (See "Direct Debt Limitations"). Voted obligations may also be issued by certain overlapping subdivisions.
General obligation bonds and notes issued in anticipation thereof, may also be issued by the County (and certain overlapping political subdivisions) without a vote of the electors. Unvoted debt is subject to both the direct and indirect debt limitations. (See "Direct Debt Limitations" and "Indirect Debt Limitation.")
Following are descriptions of the statutory and constitutional debt and ad valorem property tax limitations applying to the County's presently outstanding and projected bond and note indebtedness, and certain other long term financial obligations of the County. Nontax revenue bonds and sales tax supported bonds issued under Revised Code Section 133.081 are exempt from the direct and indirect ("ten-mill") debt limitations (see discussion of exempt debt, below).
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Direct Debt Limitations
Section 133.07 of the Revised Code provides that, exclusive of certain "exempt debt" (discussed below), the net principal amount of unvoted debt of a County may not (i) exceed 1.0% of the total value of all property in the County as listed and assessed for taxation. Section 133.07 of the Revised Code also provides that the net principal amount of both voted and unvoted general obligation debt of the County, may not exceed a sum equal to 3.0% of the first $100,000,000 of the assessed valuation, plus 1.50% of such valuation in excess of $100,000,000 and not in excess of $300,000,000, plus 2.50% of such valuation in excess of $300,000,000. These two limitations, referred to as "the direct debt limitations," may be amended from time to time by the Ohio General Assembly.
The Revised Code provides that certain county debt is exempt from direct debt limitations ("exempt debt"). Exempt debt includes general obligation debt to the extent that such debt is "self-supporting" (that is, revenues from the facilities financed are sufficient to pay applicable operating and maintenance expenses and related debt service and other requirements); bonds issued in anticipation of the collection of special assessments; bonds issued for the purpose of housing county agencies, to the extent that revenues derived from leasing such facilities, other than that attributable to unvoted county taxes, is sufficient to pay debt service; revenue bonds; bonds supported by receipts of the sales tax bonds issued in anticipation of the collection of current revenues or in anticipation of the proceeds of a specific tax levy; bonds issued for certain emergency purposes; bonds issued to pay final judgments; bonds for acquiring or constructing jail, detention or correctional facilities; and bonds for permanent improvements to the extent that debt service thereon is supported by a pledge, pursuant to Section 133.07(C)(9), Revised Code, of certain moneys to be received by the county. Notes issued in anticipation of "exempt" bonds also are exempt debt. In calculating debt subject to the direct debt limitations, the amount of money in a county's bond retirement fund allocable to the principal amount of non-exempt debt is deducted from gross non-exempt debt.
Without consideration of money in the County's Bond Retirement Fund, and based on the currently applicable assessed valuation of $27,733,453,110:
a) The total voted and unvoted non-exempt debt that the County could issue subject to the 3%, 1-1/2%, 2-1/2% limitation described above, is $691,836,328. The total County non-exempt debt which will be outstanding is $241,500,000 leaving a borrowing capacity of $450,336,328 within the limitation for combined voted and unvoted non-exempt debt; and
(b) The total unvoted non-exempt debt that the County could issue subject to the 1% limitation is $277,334,531. The total County non-exempt debt subject to such limitation which will be outstanding is $241,500,000, leaving a borrowing capacity of $35,834,531 within the 1% limitation for unvoted non- exempt debt.
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Indirect Debt Limitation
Unvoted general obligation bonds and bond anticipation notes cannot be issued by the County unless the tax required to be imposed on taxable property in the County for the payment of the debt service on (a) such bonds (or the bonds in anticipation of which notes are issued), and (b) all outstanding unvoted general obligation bonds (including bonds in anticipation of which notes are issued) of the combination of overlapping taxing subdivisions in the County resulting in the highest tax rate required for such debt service, in any one year, is ten mills or less per $1.00 of assessed valuation. This indirect debt limitation, the product of which is commonly referred to as the "ten-mill limitation," is imposed by a combination of the provisions of Article XII, Sections 2 and 11 of the Ohio Constitution and Section 5705.02, Revised Code.
The ten-mill limitation is the maximum aggregate millage for all purposes that may be levied on any single piece of property by 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 County and its overlapping taxing subdivisions for general fund purposes pursuant to a statutory formula.
This "inside" millage allocated to each overlapping taxing subdivision is required by present Ohio law to be used first for the payment of debt service on unvoted general obligation debt of the subdivision, unless provision has been made for its payment from other sources. The balance of the millage is available for other purposes of the subdivision. Thus, 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 to other such overlapping subdivisions for general fund purposes is reduced.
A subdivision's allocation of inside millage can be exceeded only in the event it is required for the payment of debt service on its unvoted general obligation debt and, in that case, the inside millage allocated to the other overlapping subdivisions would be reduced proportionally to bring the aggregate levies of inside millage down to ten mills.
In case of notes issued in anticipation of the issuance of unvoted general obligation bonds, the highest annual debt service estimated for the bonds anticipated by the notes is used to calculate the millage required.
Revenue bonds and notes, such as the Series 2015 Bonds, are not included in debt subject to the ten-mill limitation since they are not general obligations of the County, and neither the general revenue nor the full faith and credit of the County are pledged for their payment.
The ten-mill limitation applies to all unvoted general obligation debt even if debt service on some of such debt is expected to be paid in fact from special assessments, utility earnings or other sources.
In calculating whether or not unvoted debt to be issued by the County is within the ten-mill limitation, it is necessary to determine the total outstanding debt service requirements within the ten-mill limitation of all the taxing subdivisions overlapping the County.
Based upon the maximum debt service required for all general obligation debt of the County (see "General Obligation Debt Service Requirements" herein) (but excluding B-47
therefrom debt service requirements for voted debt and any sales tax bonds), the highest debt service requirement in any year for all County debt subject to the ten-mill limitation is estimated to be approximately $29,737,094 in 2016. The payment of that annual debt service would require a levy of approximately 1.0722 mills per $1.00 of assessed valuation based on current assessed valuation of $27,733,450,110. Of this maximum annual debt service requirement, the County expects nearly all to be paid from sources other than ad valorem taxes, such as county sales tax. If those other sources for any reason are not available, the debt service could be met from the amounts produced by the millage currently levied for all purposes by the Issuer within the ten-mill limitation.
In calculating whether or not unvoted debt to be issued by the County is within the ten-mill limitation, it is necessary to determine which combination of overlapping taxing subdivisions within the County (including the County) has the highest outstanding debt service requirements within the ten-mill limitation. There are 57 municipal corporations, two townships and all or portions of 33 school districts (including vocational school districts) in the County. Thus to determine the highest overlapping debt service requirements for unvoted debt, it is necessary to examine the requirements for combinations of such overlapping subdivisions, including municipal corporations, townships and school districts.
The City of Bedford presently has general obligation debt outstanding theoretically requiring approximately 8.4364 mills, Bedford City School District presently has general obligation debt outstanding theoretically requiring approximately 0.5711 mills, and the Greater Cleveland Regional Transit Authority has general obligation debt outstanding theoretically requiring approximately 0.6831. The millage of these taxing subdivisions, when combined with the 1.0722 of the mills of the County, totals 10.7628 aggregate mills.
Bond Anticipation Notes
Under Ohio law, notes, including renewal notes, issued in anticipation of the issuance of general obligation bonds may be issued and outstanding from time to time up to a maximum period of twenty years from the date of issuance of the original notes, except that the maximum maturity for notes issued in anticipation of general obligation bonds payable from special assessments is approximately five years. Any period in excess of five years must be deducted from the permitted maximum maturity of the notes anticipated, and portions of the principal amount of notes outstanding for more than five years must be retired in amounts at least equal to, and payable not later than, principal maturities that would have been required if bonds had been issued at the expiration of the initial five year period.
None of the County's debt is currently in the form of general obligation bond anticipation notes.
Bond anticipation notes may be retired at maturity from the proceeds of the sale of renewal notes, the proceeds of the sale of bonds anticipated by such notes, from other available funds of the County, or from a combination of these sources.
The ability of the County to retire its outstanding bond anticipation notes from the proceeds of the sale of either renewal notes or bonds will be dependent upon the marketability of such renewal notes or bonds under market conditions then prevailing. Under present Ohio law, there is no ceiling on the annual interest rate permitted on general obligation bonds and notes of counties.
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County General Obligation Debt Currently Outstanding
The County has the following general obligation debt issues outstanding:
Outstanding General Obligation Debt County of Cuyahoga, Ohio
Final Balance Outstanding Issue Dated Date Maturity as of Dec. 2, 2015 Limited Tax General Obligation Bonds 5/1/1993 12/1/2018 $2,400,000 General Obligation Refunding Bonds, Series 2005 4/21/2005 12/1/2020 33,985,000 Various Purpose General Obligation Bonds, Series 2009A 12/22/2009 12/1/2019 20,155,000 Various Purpose General Obligation Bonds, Series 2009B (Taxable) 12/22/2009 12/1/2034 86,195,000 Capital Improvement and Refunding Bonds, Series 2012A 12/13/2012 12/1/2037 92,670,000 Taxable Capital Improvement Refunding Bonds, Series 2012B (Taxable) 12/13/2012 12/1/2024 8,495,000
Total $243,900,000 Source: County Fiscal Office
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The following tables list the County's outstanding general obligation debt (before reduction for moneys in the County's Bond Retirement Fund) represented by notes and bonds, together with debt service information (excluding the issuance of the County’s Series 2015 Bonds and the anticipated Series 2015A Bonds as described in “Future Financings” herein.):
Analysis of Outstanding Debt County of Cuyahoga, Ohio (as of December 2, 2015)
A. Total Debt Outstanding: $995,150,000 B. Exempt Debt: Revenue Bonds (MetroHealth System) 230,305,000* Nontax Revenue Bonds & Appropriation 383,120,000 Obligations Sales Tax Revenue Bonds 137,825,000 Port Authority Bonds 2,400,000 Total Exempt Debt $753,650,000 C. Total Non-Exempt Debt: (A minus B) $241,500,000 Source: County Fiscal Office
* As of December 31, 2014
** It is anticipated that the Series 2015A Sales Tax Revenue Bonds will be issued on or about December 14, 2015. The final par amount, subject to changes, is $9,015,000. See “Future Financings” herein.
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The following schedule presents the County's actual debt service requirements for all general obligation debt as of December 2, 2015:
General Obligation Debt Service Requirements County of Cuyahoga, Ohio Calendar Total Year Principal Interest Debt Service 2016 $ 17,810,000 $ 11,927,094 $ 29,737,094 2017 18,605,000 11,132,362 29,737,362 2018 19,475,000 10,287,518 29,762,518 2019 19,490,000 9,454,260 28,944,260 2020 14,850,000 8,512,913 23,362,913 2021 7,630,000 7,800,482 15,430,482 2022 7,990,000 7,447,510 15,437,510 2023 6,585,000 7,143,428 13,728,428 2024 6,755,000 6,889,946 13,644,946 2025 9,715,000 6,628,380 16,343,380 2026 9,985,000 6,114,112 16,099,112 2027 10,330,000 5,602,663 15,932,663 2028 10,710,000 5,031,727 15,741,727 2029 11,110,000 4,439,895 15,549,895 2030 11,520,000 3,826,164 15,346,164 2031 11,950,000 3,189,830 15,139,830 2032 12,390,000 2,529,990 14,919,990 2033 12,815,000 1,877,342 14,692,342 2034 13,290,000 1,169,580 14,459,580 2035 3,490,000 435,800 3,925,800 2036 3,630,000 296,200 3,926,200 2037 3,775,000 151,000 3,926,000 Total $243,900,000 $121,888,196 $365,788,196 Source: County Fiscal Office
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No bonds have been authorized by the electors that have not yet been issued.
The County is not and has not been in default in the payment of debt service on any of its general obligation bonds or notes.
The following schedule presents the County's actual debt service requirements for the County’s outstanding Sales Tax Revenue Bonds:
Sales Tax Revenue Bonds Debt Service Requirements County of Cuyahoga, Ohio Calendar The Series 2015A Bonds Prior Bonds Total Year Principal Interest Principal Interest Debt Service 2016 - $285,341.24 $275,000.00 $6,233,893.76 $6,794,235.00 2017 - 296,031.26 280,000.00 6,228,393.76 6,804,425.02 2018 $460,000.00 296,031.26 285,000.00 6,222,793.76 7,263,825.02 2019 470,000.00 289,131.26 285,000.00 6,217,093.76 7,261,225.02 2020 485,000.00 270,331.26 5,730,000.00 6,211,393.76 12,696,725.02 2021 495,000.00 260,631.26 5,930,000.00 5,940,643.76 12,626,275.02 2022 505,000.00 250,731.26 6,210,000.00 5,661,693.76 12,627,425.02 2023 515,000.00 240,631.26 6,525,000.00 5,351,193.76 12,631,825.02 2024 525,000.00 230,331.26 6,850,000.00 5,024,943.76 12,630,275.02 2025 550,000.00 209,331.26 285,000.00 4,682,443.76 5,726,775.02 2026 560,000.00 195,581.26 6,100,000.00 4,668,193.76 11,523,775.02 2027 585,000.00 173,181.26 6,405,000.00 4,363,193.76 11,526,375.02 2028 610,000.00 149,781.26 6,725,000.00 4,042,943.76 11,527,725.02 2029 630,000.00 125,381.26 7,060,000.00 3,706,693.76 11,522,075.02 2030 655,000.00 100,181.26 7,415,000.00 3,353,693.76 11,523,875.02 2031 685,000.00 73,981.26 7,635,000.00 3,131,243.76 11,525,225.02 2032 715,000.00 46,581.26 7,875,000.00 2,892,650.00 11,529,231.26 2033 735,000.00 22,968.76 8,270,000.00 2,498,900.00 11,526,868.76 2034 - - 8,685,000.00 2,085,400.00 10,770,400.00 2035 - - 9,115,000.00 1,651,150.00 10,766,150.00 2036 - - 9,575,000.00 1,195,400.00 10,770,400.00 2037 - - 9,955,000.00 812,400.00 10,767,400.00 2038 - - 10,355,000.00 414,200.00 10,769,200.00 Total $9,180,000.00 $3,516,160.16 $137,825,000.00 $92,590,550.16 $243,111,710.32
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Other Long Term Obligations of the County
A. Leases
The County has entered into several lease agreements for acquiring land, buildings and equipment for various purposes. The table sets forth the anticipated lease payments due through 2029. See also “COUNTY ADMINISTRATIVE BUILDING” below.
Year Amount Due 2015 $42,517,524 2016 42,368,564 2017 41,390,309 2018 40,370,896 2019 40,314,265 2020-2024 202,871,922 2025-2029 124,288,610 2030-2034 27,790,387 2035-2039 30,682,833 2040 3,222,584 Total $597,757,888 Less amount representing interest ($172,014,914) Present Value of Net Minimum $425,742,974 Lease Payments
Included in these lease payments are payments for group homes ($9.0 million) at the Board of Developmental Disabilities, the Global Center for Health Innovation ($341 million) and the new County Administrative Building ($75.5 million).
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B. Hospital Revenue Bonds
The Board of Hospital Trustees of MetroHealth has issued a number of series of hospital revenue bonds on behalf of the County. Those bonds, issued pursuant to a master bond indenture agreement between the County, acting by and through the Board, and a corporate trustee are special obligations, payable solely from the net revenues derived from the operation of MetroHealth and other money available to the Board of Hospital Trustees. While the County provides certain subsidies to MetroHealth, the hospital revenue bonds do not represent or constitute a general obligation debt or pledge of the faith and credit of the County, and the County is not required to use or apply to the payment of debt charges on those obligations any funds or revenues from any source other than the net revenues of MetroHealth. In addition, MetroHealth has entered into certain interest rate swaps and has certain other long-term obligations under lease purchase and loan agreements and for compensated absences. For additional information concerning the obligations of MetroHealth as they relate to the County, see "COUNTY SERVICES AND RESPONSIBILITIES – Health" herein and "Note 29-28 – The MetroHealth System” to the County’s Audited Financial Statements for the Fiscal Year ending December 31, 2014 attached hereto as APPENDIX C.
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C. Nontax Revenue Obligations
The County has issued obligations to which it has pledged its Nontax Revenues. See "OTHER MAJOR COUNTY GENERAL FUND REVENUE SOURCES – Nontax Revenues" for the receipts of the County's Nontax Revenues in recent fiscal years.
The County has the following nontax revenue debt outstanding:
Outstanding Nontax Revenue Debt County of Cuyahoga, Ohio
Final Balance Outstanding Issue Dated Date Maturity as of Dec. 2, 2015 Taxable Economic Development Revenue Bonds, Series 1992A (Gateway Arena 9/15/1992 6/1/2022 $24,500,000 Project) Taxable Economic Development Revenue Bonds, Series 2010A (Brownfield) 9/3/2010 6/1/2030 14,085,000 Taxable Economic Development Revenue Bonds, Series 2010B (Commercial 9/3/2010 6/1/2030 9,105,000 Redevelopment) Taxable Economic Development Revenue Refunding Bonds, Series 2010C 9/3/2010 6/1/2023 29,230,000 (Gateway) Taxable Economic Development Revenue Refunding Bonds, Series 2010D (Shaker 9/3/2010 12/1/2030 2,410,000 Square) Recovery Zone Facility Economic Development Revenue Bonds, Series 12/16/2010 12/1/2027 200,235,000 2010F (Medical Mart/Convention Center) Taxable Economic Development Revenue Bonds, Series 2010G (Medical 12/16/2010 12/1/2019 50,890,000 Mart/Convention Center) Taxable Economic Development Revenue Bonds, Series 2013A (Steelyard 10/30/2013 12/1/2037 3,990,000 Commons) Taxable Economic Development Revenue Bonds, Series 2013B (Westin Hotel) 12/30/2013 12/1/2042 5,685,000 Taxable Economic Development Revenue 12/17/2014 12/1/2027 22,185,000 Bonds, Series 2014B (Western Reserve Fund) Tax-Exempt Economic Development 12/17/2014 12/1/2027 20,805,000 Refunding Bonds, Series 2014C (Medical Mart/Convention Center) Total $383,120,000 Source: County Fiscal Office
There is a priority and parity pledge of the Nontax Revenues for the payment of ten of the outstanding bond issues of the County listed above. There is a subordinate pledge of B-55
Nontax Revenues for the payment of the County's Taxable Economic Development Revenue Refunding Bonds, Series 2010D (Shaker Square Project) (the “Shaker Square Bonds”), currently outstanding in the principal amount of $2,410,000. The Shaker Square Bonds were issued to refinance amounts originally borrowed in 2000 for the purpose of making a loan to pay a portion of the cost of improvements to the Shaker Square Complex, a commercial shopping district. The County paid $129,751 of the debt service on the Shaker Square Bonds from its Nontax Revenues in 2013 and paid $126,918 in 2014. The final maturity of the Shaker Square Bonds is December 1, 2030.
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The debt service schedule for those eight categories of obligations is shown in the following table:
Medical Mart / Commercial Steelyard Brownfield Convention Westin Hotel Western Fiscal Redevelopment Gateway Bonds Shaker Square Commons Bonds Center Bonds Bonds Reserve Total Year Bonds (1992 & 2010C) (2010D) Bonds (2010A) (2010F, 2010G, (2013B) (2014B) (2010B) (2013A) 2014C)
12/1/2016 $1,377,990 $890,535 $8,832,634 $173,131 $32,100,210 $285,981 $284,453 $784,480 $44,729,414
12/1/2017 1,374,687 890,430 8,802,009 166,538 27,418,906 289,659 404,453 784,480 40,131,161
12/1/2018 1,373,214 893,157 8,774,760 164,750 27,419,856 287,679 402,233 784,480 40,100,129
12/1/2019 1,383,006 893,506 8,737,745 296,875 27,412,806 285,219 399,533 784,480 40,193,170
12/1/2020 1,374,566 891,795 8,700,621 290,813 31,286,256 287,279 401,233 784,480 44,017,041
12/1/2021 1,373,220 893,060 8,662,042 323,125 31,264,306 288,779 402,358 784,480 43,991,369
12/1/2022 1,373,493 892,095 8,623,980 316,125 31,269,856 289,684 402,808 784,480 43,952,520
12/1/2023 1,380,083 888,943 6,561,088 318,625 31,289,006 285,026 402,678 2,784,480 43,909,928
12/1/2024 1,373,065 888,533 - 320,375 31,273,156 285,031 402,078 9,219,480 43,761,718
12/1/2025 1,382,280 890,681 - 321,500 31,276,056 289,431 401,096 9,326,230 43,887,275
12/1/2026 1,394,129 888,475 - 109,697 31,275,556 288,431 399,646 2,890,830 37,246,764
12/1/2027 1,388,888 891,809 - 115,881 31,287,400 287,038 402,671 - 34,373,688
12/1/2028 1,384,940 892,475 - 106,756 - 285,238 400,040 - 3,069,449
12/1/2029 1,381,989 890,472 - 117,734 - 287,813 401,540 - 3,079,548
12/1/2030 1,379,738 890,652 - 108,197 - 289,938 402,540 - 3,071,064
12/1/2031 - - - - - 286,150 403,040 - 689,190
12/1/2032 - - - - - 286,650 402,940 - 689,590
12/1/2033 - - - - - 286,650 402,125 - 688,775
12/1/2034 - - - - - 286,150 400,575 - 686,725
12/1/2035 - - - - - 289,600 402,925 - 692,525
12/1/2036 - - - - - 287,263 399,450 - 686,713
12/1/2037 - - - - - 589,400 400,425 - 989,825
12/1/2038 ------400,575 - 400,575
12/1/2039 ------404,188 - 404,188
12/1/2040 ------401,650 - 401,650
12/1/2041 ------403,250 - 403,250
12/1/2042 ------803,700 - 803,700
Total $20,695,287 $13,366,618 67,694,878 3,250,122 364,573,373 6,624,086 11,134,199 $29,712,380 $517,050,942
D. Economic Development Guaranty Bonds
In April 2014, the County was the issuer of $17,000,000 Taxable Economic Development Revenue Bonds, Series 2014A (Flats East Development LLC Project) (the "Series 2014A Flats Bonds"), funding, in part, development costs of a mixed-use residential, office, and retail project on the banks of the Cuyahoga River adjacent to B-57
Cleveland's central business district. The project is being completed in two phases, with the first of the two phases already complete. The total development cost of both phases is approximately $425 million. The Series 2014A Flats Bonds debt service costs are secured and funded by project revenues, but subordinate to private commercial loans. The County has agreed to provide a guaranty of debt service payments to bondholders, subject to annual appropriation. A debt service reserve fund, a mortgage (also subordinate to the private commercial loans) and individual guarantees from the principals of the project developer are available to the County and/or bondholders as additional security for the Series 2014A Flats Bonds.
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E. Ohio Public Works Commission Loans
The County has six outstanding loans to the Ohio Public Works Commission ("OPWC") pursuant to which the OPWC provided funds to the County for the construction of sewage collection facilities and sewer lines. The current outstanding loans (as of July 1, 2015) are as follows:
Balance Final Loan Name Loan Amount Outstanding Maturity North County Trunk Sewer $ 453,918.72 $ 90,783.68 7/1/2019 Metro Health Sanitary Sewer 130,654.41 19,598.17 7/1/2018 Schaaf Rd. Bridge 1,251,250.00 719,468.75 1/1/2027 Sanitary Sewer Improvements 236,209.60 188,967.68 7/1/2031 Maple Hts. Sanitary Sewer Improvements 76,605.00 76,605.00 7/1/2031 Barton, Bronson & Cook Sanitary Sewer 1,000,000.00 1,000,000.00 1/1/2036 Totals $3,148,637.73 $2,095,423.28
Source: Ohio Public Works Commission
All of the County's loans through the OPWC carry a 0.00% interest rate.
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F. Ohio Water Development Authority Loans
The County has 18 outstanding loans from the Ohio Water Development Authority ("OWDA") pursuant to which the OWDA provided funds to the County for the construction of various water and sewer improvements. The current outstanding loans are as follows:
Interest Balance Final Loan Name Loan Amount Rate Outstanding Maturity Cuyahoga County Lab $1,487,337.98 4.18% $54,101.93 1/1/2016 Interceptor Sewer Construction 270,473.78 4.16 19,444.48 7/1/2016 Trunk Sewer Construction 1,935,140.91 4.04 459,086.41 1/1/2019 Scottish Highlands Sewer 1,225,007.35 4.04 211,693.55 1/1/2018 CSO Improvements 305,878.64 3.35 178,113.36 7/1/2025 Suffolk Estates Pump Station 199,179.50 3.25 119,039.16 7/1/2026 Woods Pump Station 574,900.27 3.25 388,111.09 7/1/2027 CSO Imprmts/E. 38th & 40th St. 764,988.00 3.25 516,437.96 7/1/2027 Fitch Rd. Sewer 1,531,654.45 3.25 1,034,009.03 7/1/2027 Echo Hills WWTP Elimination 1,674,119.73 3.36 1,209,850.77 7/1/2028 Stearns & Cook Rds. San. Sewer 490,430.91 3.53 397,903.99 7/1/2030 Cook Mackenzie Sanitary Sewer 610,392.42 3.52 469,571.79 7/1/2029 Thornapple Pump Station 851,927.30 3.70 658,169.63 7/1/2029 Sewer Repairs 2,196,265.41 3.25 1,847,872.06 7/1/2032 Fernhill Sewer Replacement 1,579,534.78 2.66 1,329,104.61 7/1/2032 N. Granger Sewer Replacement 486,347.05 2.62 287,327.93 7/1/2031 Dewey Rd. Pump Station 2,671,858.09 3.28 1,941,043.83 7/1/2032 Jefferson Dr. Sewer Lining 378,483.00 2.66 209,839.27 7/1/2032 Totals $19,338,064.52 $12,007,809.10
G. Certificates of Participation
In May 2014, the County entered into a lease-purchase agreement (the "Hotel Lease") with the Cleveland-Cuyahoga County Port Authority (the "CCPA") to fund a portion of the costs of the construction of an approximately 600-room convention headquarters hotel adjacent to the Cleveland Convention Center and Global Center for Health Innovation (the "Hotel"). Under the Hotel Lease, the County is leasing the Hotel from the CCPA. The Hotel Lease consists of one initial term running from May 29, 2014 through December 31, 2014, and 30 renewable one-year lease terms which run from 2015 through 2044, and expire annually at the end of the County's fiscal year.
The annual base rent that the County must pay to the CCPA under the Hotel Lease was securitized as $230,885,000 Certificates of Participation (the "2014 Hotel Certificates") and sold to investors. The County is not a party to the 2014 Hotel Certificates. In addition, the 2014 Hotel Certificates, the Hotel Lease and the obligation to make base rent payments under the Hotel Lease are subject to annual appropriation by the County and do not represent or constitute bonded indebtedness, a debt of, or a general obligation of the County. Neither the full faith and credit nor the taxing power of the County is pledged to secure the 2014 Hotel Certificates. Furthermore, because the Hotel Lease consists of 30 renewable one-year lease terms that expire at the end of each fiscal year, the 2014 Hotel Certificates are not
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considered lease-purchase debt under Ohio law. Accordingly, the 2014 Hotel Certificates have been excluded from the County's debt presentation.
As of January 1, 2015, the outstanding balance on the 2014 Hotel Certificates is $230,885,000.
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The following table sets forth the annual base rent payments under the Hotel Lease.
2014 Certificates of Participation Calendar Capitalized Debt Year Principal Interest Interest Service 2016 $11,008,344 $7,238,527 $3,769,817 2017 $9,300,000 11,008,344 - 20,308,344 2018 10,200,000 10,543,344 - 20,743,344 2019 10,700,000 10,033,344 - 20,733,344 2020 11,250,000 9,498,344 - 20,748,344 2021 11,800,000 8,935,844 - 20,735,844 2022 12,400,000 8,345,844 - 20,745,844 2023 13,015,000 7,725,844 - 20,740,844 2024 13,675,000 7,075,094 - 20,750,094 2025 14,350,000 6,391,344 - 20,741,344 2026 15,075,000 5,673,844 - 20,748,844 2027 15,825,000 4,920,094 - 20,745,094 2028 16,600,000 4,128,844 - 20,728,844 2029 3,300,000 3,298,844 - 6,598,844 2030 3,450,000 3,133,844 - 6,583,844 2031 3,575,000 3,004,469 - 6,579,469 2032 3,720,000 2,870,406 - 6,590,406 2033 3,875,000 2,708,906 - 6,583,906 2034 4,025,000 2,553,906 - 6,578,906 2035 4,200,000 2,392,906 - 6,592,906 2036 4,575,000 2,210,406 - 6,785,406 2037 4,775,000 2,011,406 - 6,786,406 2038 4,975,000 1,802,500 - 6,777,500 2039 5,200,000 1,584,844 - 6,784,844 2040 5,650,000 1,357,344 - 7,007,344 2041 5,900,000 1,110,156 - 7,010,156 2042 6,150,000 852,031 - 7,002,031 2043 6,425,000 582,969 - 7,007,969 2044 6,900,000 301,875 - 7,201,875 Total $230,885,000 $137,065,282 $360,711,755
County Administrative Building
Effective February 1, 2013, the County entered into an agreement of lease (the "Administrative Building Lease") with Geis Property Management, LLC to lease a built-to- suit County headquarters building (the "Administrative Building"). The Administrative Lease, which contains an option to purchase the property at the end of the Lease for $1.00, was assumed by CCPA in April 2013 as part of the Port Authority's financing for the project. The Administrative Building Lease consists of a single term, which runs through July 15, 2040.
The annual base rent that the County must pay to the CCPA under the Administrative Building Lease was securitized as $75,465,000 Development Lease Revenue Bonds, Series B-62
2013 (Administrative Headquarters Project) (Cuyahoga County, Ohio, Lessee) (the "2014 Administrative Building Certificates") and sold to investors. The County is not the issuer of the 2014 Certificates. In addition, the 2014 Administrative Building Certificates, the Administrative Building Lease and the obligation to make base rent payments under the Administrative Building Lease are subject to annual appropriation by the County and do not represent or constitute bonded indebtedness, a debt of, or a general obligation of the County. Neither the full faith and credit nor the taxing power of the County is pledged to secure the 2014 Administrative Building Certificates. The Administrative Lease is subject to annual appropriations, the 2014 Administrative Building Certificates are not considered lease- purchase debt under Ohio law. Accordingly, the 2014 Administrative Building Certificates have been excluded from the County's debt presentation.
Debt Outstanding
The Debt Tables attached list the County’s outstanding debt represented by bonds and provide information with respect to County and overlapping general obligation debt allocations and debt service requirements on the County’s outstanding general obligation debt and on County obligations payable only from non-tax revenues. The County is not and has not been, in the last 50 years, in default in the payment of debt service on any of its bonds or notes or in a condition of default under the financing documents relating to any of its issues of revenue bonds; however, the County makes no representation as to the existence of a condition of default resulting from a default by any private entity under any financing documents relating to its industrial development or hospital improvement revenue bonds. Future Financings
The County anticipates issuing approximately $9,015,000 of Sales Tax Revenue Bonds (the “Series 2015A Bonds”) on December 14, 2015. Pursuant to the Sales Tax Indenture, the County may issue Additional Bonds on parity with the Series 2015A Bonds. At the present time, the County anticipates an issuance of Additional Bonds during the first half of 2016 to fund costs of renovating and otherwise improving the 1,200-space County- owned Huntington Park Garage, including the provision of ancillary improvements, in downtown Cleveland. The amount of the Additional Bonds has not been determined. From time to time, the County may consider additional financing opportunities.
FINANCES OF THE COUNTY
General Fund and Financial Outlook
The General Fund is the County’s main operating fund, from which most expenditures for County administrative, justice system and public safety purposes and certain expenditures for County economic development purposes are paid and into which most revenues received by the County for those purposes are deposited. The County also expends General Fund money to supplement other amounts available for certain social services and health and safety purposes. The General Fund receives money from many sources, but primarily from sales and use taxes and ad valorem property taxes levied by the County, local government assistance funds from the State and certain charges for services, fines and forfeitures, investment earnings and other miscellaneous non-tax revenues.
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County officials, including the Fiscal Office and its Office of Budget and Management, closely monitor County revenues and spending. As most local governments, the County is affected by economic conditions (i.e. unemployment, inflation, etc.) and changes in revenues received from the State and federal governments for programs for which the County is responsible. As described in detail below, the County’s General Fund receipts over the past five Fiscal Years have reflected the difficult economic conditions experienced nationally and some significant changes in State assistance, and County officials have adjusted General Fund expenditures over time in reaction to those conditions and changes. As a result, the County has maintained and expects to continue to maintain strong General Fund cash balances in excess of 25% of annual operating expenditures. Sales and use tax receipts, the largest source of County General Fund revenues, typically account for over 66% of General Fund revenues. The level of such receipts varies significantly based on economic conditions. Collections were relatively stable between Fiscal Years 2005 and 2007, during which period the average annual rate of nominal growth was approximately 1.6% (including the impact of an expansion in the base that started in 2005). In Fiscal Year 2008, the County began receiving collections from an additional 0.25% sales tax levy approved by the Board. With the additional 0.25% levy, sales and use tax receipts increased to $215.8 million in that Fiscal Year. At the end of Fiscal Year 2008 and into Fiscal Year 2009, total sales and use tax receipts dropped severely as local, regional and national economic conditions worsened. Overall, in Fiscal Year 2009 the County’s sales and use tax receipts fell by 10.4% (to $193.3 million). In Fiscal Year 2010, sales and use tax receipts climbed by 5.6% (to $204.1 million), with most of the increase being attributable to an expansion of the sales tax base (managed Medicaid care organizations) by the State that became effective in October of 2009. As the regional economy started to rebound in Fiscal Year 2011, receipts grew by 6.1% in 2011 (to $216.6 million) and increased again by 4.9% in 2012 to $226.8 million. In 2013, sales tax grew 4.6% to $237.3 million. In Fiscal Year 2012 monthly collections started to exceed the inflation-adjusted average for the first time since before the economic downturn began, signaling growth attributable to economic activity. Sales tax receipts in Fiscal Year 2013 were $237.3 million, a 4.6% increase from the Fiscal Year 2012 level, and in Fiscal Year 2014, increased by 4.0% to $246,767,000. Projected sales and use tax revenues for Fiscal Year 2015 are $259.3 million, an anticipated increase of 4.0% over the prior Fiscal Year. See “OTHER MAJOR GENERAL FUND REVENUE SOURCES – County Sales and Use Tax.” Ad valorem property tax receipts in the General Fund have remained relatively steady since Fiscal Year 2008. Those property tax receipts were $19.3 million in Fiscal Year 2008 and dropped slightly in Fiscal Year 2009 ($18.9 million). The decreases in both those years were due primarily to a change in the State homestead exemption law that decreased the amount of property taxes paid by certain senior citizens, but increased the amount of reimbursements received from the State to make up for the exemption. In Fiscal Year 2010, the County changed the allocation of its unvoted property tax (inside millage) between the General Fund and its Debt Retirement Fund, and General Fund property tax receipts increased to $22.1 million. A triennial adjustment in assessed valuations in 2009 (first effective for collection year 2010), and a shift of property tax dollars to the Debt Retirement Fund decreased the property tax revenue available to the General Fund to $14.2 million in Fiscal Year 2011, $14.8 million in Fiscal Year 2012, $13.9 million in fiscal year 2013 and $14.0 million in 2014. The Fiscal Officer undertook a reappraisal of real property in the County in 2012, which resulted in a 7.2% decrease in its assessed valuation for tax year 2012 (collection year 2013) that will decrease the revenue derived from unvoted
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property tax collections available to the General Fund. See “AD VALOREM PROPERTY TAXES.” County General Fund receipts from the State Local Government Fund (“LGF”) distributions in Fiscal Years 2011 and 2012 were $38.7 million and $22.9 million, respectively. Fiscal Year 2012 was the first year a 50% reduction in State revenue allocations began to take effect. The County’s LGF receipts in Fiscal Year 2013 were reduced by the full 50% State imposed cut and totaled approximately $17.4 million. In Fiscal Year 2014, LGF receipts were further reduced to $17.2 million and are projected to total approximately $18.7 million for Fiscal Year 2015. See “OTHER MAJOR GENERAL FUND REVENUE SOURCES – Local Government Assistance Funds.” The County’s nontax revenues were $94.0 million in Fiscal Year 2010, but decreased to $78.3 million in Fiscal Year 2011 and increased slightly to $74.9 million in Fiscal Year 2012. Nontax revenues were $71.8 million in Fiscal Year 2013 and $84.4 million in Fiscal Year 2014. Projected 2015 nontax revenue will be $80.2 million. The decrease in nontax revenue in the aggregate has been significantly impacted by the reduction in investment income in recent years. Investment income in the General Fund totaled $18.0 million in fiscal year 2010 and was recorded as $447,000 for fiscal year 2014. Historically low interest rates as well as the amortization of purchase premiums at the sale of certain securities in the County investment portfolio have contributed to the decline. Beginning in 2013, the County Treasurer has instituted a policy whereby investments may not be purchased at a premium. Increases in revenue from charges for services ($47.2 million in Fiscal Year 2013 and $60.6 million in Fiscal Year 2014) and declines in fees derived from sales of real property contributed to the decline in nontax revenues from Fiscal Year 2010. The County expects total nontax revenue to recover incrementally as collection trends and investment earnings recover. In Fiscal Year 2009, County officials, responding to projected budget shortfalls resulting from anticipated declines in General Fund receipts from several sources, adopted a budget plan that imposed across-the-board cuts ranging from 8% to 11.5% and a freeze on hiring and wage increases and thereafter implemented a number of programmatic cuts and further expenditure reductions and instituted a mandatory three-day furlough for employees. These actions resulted in a 9.1% ($37.3 million) decrease in General Fund expenditures in Fiscal Year 2009 to $323.5 million. The County also instituted an early retirement incentive program in 2009, resulting in over 850 employees retiring from the County by the beginning of 2010. The County achieved significant cost savings ($30 million on an all funds basis) net of the payments to OPERS from that program, and those savings were carried over into subsequent budgets. As a result of the early retirement incentive program, layoffs and attrition, the County’s General Fund staffing expenditures were $133.6 million in Fiscal Year 2010 or 7.6% lower than in Fiscal Year 2009. However, expenditures in Fiscal Year 2010 were $454.0 million, including $366.1 million for ongoing operations and $117.9 million that were transferred from the General Fund from the proceeds of new General Fund revenue instituted in 2007 and 2010 for the Global Center project. In light of the slow economic recovery and anticipated cuts in State revenue, the County implemented a Fiscal Year 2011 operating budget that incorporated budget cuts of over $15 million across programs funded through the General Fund. The savings were achieved by implementing a mandatory five-day furlough for County employees and requiring reductions in General Fund program budgets ranging from 1.5% to 7.5%. As a result, cash basis expenditures for ongoing operations decreased by approximately 24.4% in B-65
Fiscal Year 2011 to $327.4 million (non-GAAP basis). The reductions in General Fund program expenditures were primarily attributable to staffing reductions and other organizational realignments implemented by the County Executive. The net result of operations for the General Fund resulted in an increase of $22.2 million in the County’s carryover General Fund cash balance at year end. The County adopted a biennial operating budget for the first time for Fiscal Years 2012-2013. The adopted budget balanced estimated resources with expenditure levels and included funding for some new initiatives for economic development and investment in information technology. Operating expenditures and uses totaled $354.1 million in 2013. Spending in the core areas of County government remained flat and the General Fund ended the year with a $4.0 million operating surplus (non-GAAP budgetary basis) . General Fund expenditures were $380.0 million in Fiscal Year 2014, including transfers to fund required operating payments for the Global Center project. The County’s cash basis General Fund balance at the end of Fiscal Year 2014 was $200.1 million compared to $187.4 million at the end of Fiscal Year 2013, $183.4 million at the end of Fiscal Year 2012, $178.5 million in Fiscal Year 2011, and $131.2 million at the end of Fiscal Year 2010. The ending cash balance in Fiscal Year 2010 was net of a transfer of General Fund resources accumulated since 2008 to fund the construction of the Global Center project. The County implemented GASB Statement No. 54 in 2011. The implementation of this protocol for reporting fund balances resulted in a restatement of the 2011 ending year cash balance in the General Fund. The net result on this restatement was an increase in ending balance in 2011 of $25.1 million in the General Fund. Financial Reports and Audits
The County's fiscal year is the calendar year. The County maintains its accounts, appropriations and other fiscal records in accordance with the procedures established and prescribed by the Auditor of the State of Ohio (the "State Auditor"). The State Auditor is charged by Ohio law with the responsibility of auditing the accounts and records of each taxing subdivision and most agencies and public institutions.
A financial report for each fiscal year is required to be filed with the State Auditor pursuant to Sections 319.11 and 117.38 of the Revised Code. Such reports are required to be submitted to the County Fiscal Officer within 150 days of the close of each fiscal year. The State Auditor audits the County's financial examinations of financial transactions.
The Audited Basic Financial Statements for the Year Ended December 31, 2014 are attached hereto as APPENDIX C. The most recent audit by the State Auditor of the County's financial statements, was completed through the fiscal year ending December 31, 2014. No findings for recovery were required. Certain deficiencies in internal control, noncompliance findings and recommendations were made in letters to the County on August 21, 2015 and October 26, 2015. The County has corrected certain of the deficiencies, noncompliance findings and recommendations and the remaining deficiencies, noncompliance findings and recommendations will be reviewed for further corrective actions.
Except for audits by, or by certified public accountants at the direction of, the State Auditor pursuant to Ohio law and audits under federal program requirements, no independent audit of the Council's financial records is made.
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The County prepares its annual financial reports on the basis of generally accepted accounting principles ("GAAP"). The Governmental Accounting Standards Board and Financial Accounting Standards Board are the principal sources used to determine the accounting principles employed. These principles, among other things, provide for the government-wide statements presented on the full accrual basis of accounting for governmental funds, for agency funds, and for certain fiduciary funds; and for a full accrual basis of accounting for proprietary funds and for certain fiduciary funds. The principles further provide for the government-wide statement of net assets and statement of activities as well as the preparation of balance sheets for each fund, and statement of revenues, expenditures, and changes in fund balances (governmental funds) or statement of revenues, expenses and changes in retained earnings/equity (proprietary funds). The County issued a Comprehensive Annual Financial Report (“CAFR”), including General Purpose Financial Statements/Basic Financial Statements, for its Fiscal Years 2012 through 2014. Each such CAFR was submitted to the Government Finance Officers Association (“GFOA”) for consideration for a Certificate of Achievement for Excellence in Financial Reporting, which is awarded to those governmental reporting agencies that comply with the reporting standards of the GFOA. The County was awarded a Certificate for its CAFRs for each Fiscal Year 2012 through 2013, and the GFOA is currently reviewing the CAFR for Fiscal Year 2014. The County has submitted its budget plan for review in all but four years during the period from 1988 through 2014. For each year it submitted its budget plan to GFOA, including the biennial period of Fiscal Years 2012 and 2013, the County has received the Distinguished Budget Presentation Award from the GFOA. The GFOA established the Distinguished Budget Presentation Award in 1984 to encourage and assist state and local governments to prepare budget documents of the very highest quality that reflect both the guidelines established by the National Advisory Council on State and local Budgeting and the GFOA’s recommended practices on budgeting and then to recognize individual governments that succeed in achieving that goal. Information regarding the County’s Revenues and Expenditures is included as Appendix D. County Insurance The County maintains comprehensive insurance coverage with serve private insurance companies in several areas including real property, building contents, professional liability, and directors and officer liability. See "Note 23 – Risk Management" to the County's Audited Financial Statements for the Fiscal Year ending December 31, 2014 attached hereto as APPENDIX C. Pursuant to statutes enacted in 1985 and 2003, the liability of political subdivisions in Ohio, including counties, has been significantly reduced. As a general rule, Ohio law provides that political subdivisions such as the County have immunity from liability in damages for injury, death, or loss to persons or property allegedly caused by an act or omission of such political subdivisions or their employees in connection with governmental and proprietary functions, as defined in the Ohio statutes. The statutes have no effect on any liability imposed by federal law or other federal cause of action. Pursuant to Ohio law, there are, however, five areas in which a political subdivision may be held liable for such loss. These include the negligent operation of a motor vehicle by employees engaged within the scope of their employment and authority; negligent performance of proprietary functions; negligent failure to keep public roads, highways, streets, avenues, alleys and bridges in repair, B-67
and other negligent failure to remove obstructions from public roads; negligence of employees due to physical defects within or upon the grounds of buildings used in the performance of governmental functions, excluding jails, juvenile detention workhouses and other detention facilities; and liability specifically imposed by statute. Ohio law also imposes a two-year statute of limitations and puts limits on the damages that may be recovered from such political subdivisions. No punitive or exemplary damages can be recovered, and any insurance benefits are deducted from any award against a political subdivision. Although there is no limitation with respect to compensatory damages representing a person's economic loss, there is a $250,000 per person ceiling on the compensatory damage that represents a person's non-economic loss in cases other than wrongful death, in which case there is no maximum limitation. CRIMINAL MATTERS REGARDING FORMER COUNTY OFFICIALS
Since 2008, 16 former County officials and employees have been charged in United States District Court with violations of federal law, including bribery. The charges have stemmed from an FBI investigation into public corruption within the County. Of those charged, 11, including the former County Auditor, have pleaded guilty. In addition, three former government officials, including a former County Commissioner and one former employee, have been convicted of public corruption charges after trials. Finally, two former County employees have been charged and have pleaded guilty in the State criminal justice system. One former County employee has pleaded not guilty and is awaiting trial.
In connection with the foregoing charges, the County has received approximately $3,611,803 in forfeitures paid by the defendants in the various aforementioned criminal cases. In addition, the County received a total of $2,532,157 in restitution payments made directly to the County by individuals convicted in such cases.
The County does not believe that the investigation, or any criminal charges or convictions resulting from the investigation, will have a material effect on the future financial position of the County.
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DEBT TABLE A Principal Amounts of Outstanding Debt; Leeway for Additional Debt Within Direct Debt Limitations (as of December 2, 2015 and excluding the issuance of the Series 2015 Bonds)
A. Total outstanding debt: $ 995,150,000
B. Exempt debt: Outstanding Principal Category Amount
Revenue bonds issued for hospital improvements 230,305,000*
Revenue bonds issued under Revised Code Chapter 165 payable from nontax revenues 383,120,000
General obligation bonds issued for the acquisition, construction and equipping of a port authority educational and cultural facility 2,400,000
Sales tax supported bonds 137,825,000
Total exempt debt: 753,650,000
C. Total nonexempt debt (A minus B): $ 241,500,000
D. 1% of assessed valuation (unvoted nonexempt debt limitation): 277,334,531
E. Total unvoted nonexempt debt outstanding: 241,500,000
F. Debt leeway within 1% unvoted debt limitation (but subject to indirect debt limitation) (D minus E): 35,834,531
G. 3%, 1½% and 2½% of assessed valuation (3% of 1st $100,000,000, 1½% of next $200,000,000, and 2½% of amount in excess of $300,000,000 of assessed valuation) (voted and unvoted nonexempt debt limitation): 691,836,328
H. Total nonexempt debt outstanding: 241,500,000
I. Debt leeway within 3%, 1½% and 2½% debt 450,336,328 limitation (G minus H): *As of December 31, 2014
** It is anticipated that the Series 2015A Sales Tax Revenue Bonds will be issued on December 14, 2015. The final par amount, subject to changes, is $9,015,000. See “Future Financings” herein.
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DEBT TABLE B
Various County and Overlapping General Obligation (GO) Debt Allocations (Principal Amounts)
Portion of Debt Borne by Percentage Properties Within Outstanding Allocable to the County Political Subdivision Indebtedness(a)(b) County(c)
The County $ 194,222,000 100.00% $ 194,222,000 All Cities wholly within the County 380,861,540 100.00% 380,861,540 All Villages wholly within the County 26,386,117 100.00% 25,783,942 All Townships wholly within the County 1,810,000 100.00% 1,810,000 All School Districts (S.D.) wholly within the County 828,981,751 100.00% 828,263,420 Greater Cleveland Regional Transit Authority 172,765,000 100.00% 172,765,000 Independence City S.D. 13,474,992 100.00% 13,474,992 Chagrin Falls Exempted Village S.D. 19,489,521 62.89% 12,256,960
(a) General obligation debt as of December 31, 2014.
(b) General obligation debt exempt from statutory debt limitations is nevertheless included in this table.
(c) Determined, on a percentage basis, by dividing the amount of the assessed valuation of that territory of the political subdivision which is within the boundaries of the County by the total assessed valuation of the political subdivision.
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DEBT TABLE C Outstanding Metro Health System Revenue Bonds (as of December 31, 2014)
Obligation Purpose Initial Amount Outstanding Amount
Hospital Improvement and Refunding To refund Series 1989 Bonds, to $70,000,000 $17,600,000 Revenue Bonds, Series 1997 (The pay costs of constructions of various MetroHealth System Project improvements and additions to the MetroHealth Medical Center and to pay costs of issuance
Hospital Improvement and Refunding To pay costs of constructing, $74,535,000 $71,280,000 Variable Rate Demand Revenue Bonds, renovating, furnishing, equipping Series 2005 (The MetroHealth System and otherwise improving a long- Project) term care and skilled nursing facility and refunding certain prior bonds issued in 1999
Hospital Revenue Bonds, Taxable Series To pay costs of hospital facilities, $75,000,000 $75,000,000 2009B (The MetroHealth System) (Build including three helicopters, multi- America Bonds - Direct Payment) specialty ambulatory centers, equipment and renovations
Hospital Revenue Bonds, Series 2011 Refunding certain prior bonds $67,455,000 $43,315,000 (The MetroHealth System) issued in 1997 and 2009
Hospital Refunding Revenue Bonds, Refunding certain prior bonds $24,710,000 $23,110,000 Series 2012 issued in 2003
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APPENDIX C AUDITED BASIC FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED DECEMBER 31, 2014
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About the Cover
Pictured on the cover is Cuyahoga County Administrative Headquarters.
The Cuyahoga County Administrative Headquarters, built in 2014, was conceived and designed to meet the needs of the residents of Cuyahoga County. The Silver LEED certified headquarters is in a convenient, centralized location for the public to conduct business. The Administrative Headquarters is one of many County-funded projects that contributed to re-energizing a once dormant part of downtown Cleveland. It is the catalyst for exciting new businesses in the East Ninth area including Metropolitan at the Nine hotel and apartments, Heinen’s, and Geiger’s Clothing. Surrounded by the Playhouse Square district, the Headquarters was a major component of the County’s Real Estate Property Consolidation Project which will save taxpayers millions over 20 years.
Cuyahoga County, Ohio Comprehensive Annual Financial Report For the Year Ended December 31, 2014
Dennis G. Kennedy, CPA Cuyahoga County Fiscal Officer
Prepared by The Cuyahoga County Fiscal Department: Amy Himmelein, CPA Controller Introductory Section Cuyahoga County, Ohio Comprehensive Annual Financial Report For the Year Ended December 31, 2014 Table of Contents
Page I. Introductory Section
Table of Contents ...... i Letter of Transmittal ...... v List of Principal Officials ...... xiv Organizational Chart...... xvi GFOA Certificate of Achievement ...... xvii
II. Financial Section
Independent Auditor’s Report ...... 1
Management’s Discussion and Analysis ...... 5
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position ...... 15
Statement of Activities ...... 16
Fund Financial Statements:
Balance Sheet – Governmental Funds ...... 18
Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities ...... 20
Statement of Revenues, Expenditures and Changes In Fund Balances – Governmental Funds ...... 22
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ...... 24
Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Budget Basis) – General ...... 25 Human Services ...... 26 Health and Human Services Levy ...... 27 County Board of Developmental Disabilities ...... 28 Children Services ...... 29
Statement of Fund Net Position – Proprietary Funds ...... 30
Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds ...... 31 - i -
Cuyahoga County, Ohio Comprehensive Annual Financial Report For the Year Ended December 31, 2014 Table of Contents (continued)
Page
Statement of Cash Flows – Proprietary Funds ...... 32
Statement of Fiduciary Assets and Liabilities – Agency Funds ...... 34
Notes to the Basic Financial Statements ...... 35
Combining and Individual Fund Statements and Schedules
Combining Statements – Nonmajor Governmental Funds:
Fund Descriptions ...... 124
Combining Balance Sheet – Nonmajor Governmental Funds ...... 126
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds ...... 127
Combining Balance Sheet – Nonmajor Special Revenue Funds ...... 128
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Special Revenue Funds ...... 132
Combining Balance Sheet – Nonmajor Capital Projects Funds ...... 136
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Capital Projects Funds ...... 137
Combining Statements – Nonmajor Enterprise Funds:
Fund Descriptions ...... 138
Combining Statement of Fund Net Position – Nonmajor Enterprise Funds ...... 139
Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Nonmajor Enterprise Funds ...... 140
Combining Statement of Cash Flows – Nonmajor Enterprise Funds ...... 141
Combining Statements – Internal Service Funds:
Fund Descriptions ...... 143
Combining Statement of Fund Net Position – Internal Service Funds ...... 144
Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Internal Service Funds ...... 146 - ii -
Cuyahoga County, Ohio Comprehensive Annual Financial Report For the Year Ended December 31, 2014 Table of Contents (continued)
Page
Combining Statement of Cash Flows – Internal Service Funds ...... 148
Combining Statement – Agency Funds:
Fund Descriptions ...... 150
Combining Statement of Changes in Assets and Liabilities – Agency Funds ...... 151
Individual Fund Schedules of Revenues, Expenditures/Expenses and Changes in Fund Balance/Fund Equity – Budget and Actual (Budget Basis)
Major Funds General ...... 154 Human Services ...... 166 Health and Human Services Levy ...... 172 County Board of Developmental Disabilities ...... 174 Children Services ...... 175 Convention Center Hotel Construction ...... 176 Sanitary Engineer ...... 177
Nonmajor Funds Motor Vehicle Gas Tax ...... 178 Real Estate Assessment ...... 180 Alcohol, Drug and Mental Health Board ...... 181 Cuyahoga Support Enforcement ...... 182 Delinquent Real Estate Assessment ...... 183 County Land Reutilization ...... 184 Court……… ...... 185 Solid Waste...... 187 Community Development ...... 188 Other Community Development ...... 194 Treatment Alternatives for Safer Communities ...... 196 Victim Assistance ...... 198 Youth Services ...... 200 Other Judicial...... 201 Other Legislative and Executive...... 208 Other Health and Safety ...... 209 Other Public Works ...... 213 Other Social Services ...... 214 Litter Prevention and Recycling ...... 217 Alcohol, Drug and Mental Health Board Grants ...... 218 Debt Service ...... 219 Capital Projects ...... 221 Road Capital Projects ...... 223 County Airport ...... 225
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Cuyahoga County, Ohio Comprehensive Annual Financial Report For the Year Ended December 31, 2014 Table of Contents (continued)
Page
County Parking Garage ...... 226 Cuyahoga County Information Systems ...... 227 Central Custodial Services ...... 228 Maintenance ...... 229 Data Processing ...... 230 Printing……...... 231 Postage……...... 232 Health Insurance ...... 233 Workers’ Compensation ...... 234
III. Statistical Section
Statistical Section Description ...... S-1
Net Position by Component – Last Ten Years ...... S-2
Changes in Net Position – Last Ten Years ...... S-4
Fund Balances, Governmental Funds – Last Ten Years ...... S-8
Changes in Fund Balances, Governmental Funds – Last Ten Years ...... S-10
Assessed and Estimated Actual Value of Taxable Property – Last Ten Years ...... S-12
Property Tax Rates – Direct and Overlapping Governments – Last Four Years ...... S-14
Property Tax Levies and Collections – Last Five Years Real and Public Utility Taxes ...... S-22
Principal Real Property Taxpayers – 2014 and 2012 ...... S-24
Ratio of General Bonded Debt to Estimated True Values of Taxable Property and Bonded Debt per Capita – Last Ten Years ...... S-25
Ratio of Outstanding Debt to Total Personal Income and Debt per Capita – Last Ten Years ...... S-26
Computation of Legal Debt Margin – Last Five Years ...... S-28
Computation of Direct and Overlapping Governmental Activities Debt ...... S-30
Demographic Statistics – Last Ten Years ...... S-32
Ten Largest Employers – Current Year and Nine Years Ago ...... S-34
County Government Employees – Last Four Years ...... S-35
Capital Asset Statistics by Function/Program – Last Three Years ...... S-37
Operating Indicators by Function/Program – Last Five Years ...... S-38
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CUYAHOGA COUNTY OFFICE OF THE FISCAL OFFICER Dennis G. Kennedy, CPA – Fiscal Officer