COUNTY of DELAWARE Citigroup

NEW ISSUE - BOOK ENTRY-ONLY RATINGS: See “RATINGS” herein.

In the opinion of Bond Counsel, interest on the Bonds (including accrued original issue discount), is excludable from gross income for purposes of federal income tax, assuming continuing compliance with the requirements of the federal tax laws. Interest on the Bonds will not be a preference item for purposes of computing the federal alternative minimum tax imposed on individuals and corporations; however such interest may be subject to certain other taxes affecting corporate holders of the Bonds. Under the laws of the Commonwealth of Pennsylvania, as enacted and construed on the date hereof, interest on the Bonds is exempt from Pennsylvania personal income tax and Pennsylvania corporate net income tax, and the Bonds are exempt from personal property taxes in Pennsylvania. See “TAX MATTERS” herein. NEW ISSUE - BOOK ENTRY-ONLY RATINGS: See “RATINGS” herein. In the opinion of Bond Counsel, interest on the Bonds (including accrued original issue discount), is excludable from gross income for purposes of federal income tax, assuming continuing compliance with the requirements of the federal tax laws. Interest on the Bonds will not be a preference item for purposes of computing the federal alternative minimum tax imposed on individuals and corporations; however such interest may be subject to certain other taxes affecting corporate holders of the Bonds. Under the laws of the$49,420,000 Commonwealth of Pennsylvania, as enacted and construed on the date hereof, interest on the Bonds is exempt from Pennsylvania personal income tax and Pennsylvania corporate net income tax, and the Bonds are exempt from personal property taxes in Pennsylvania. See “TAX MATTERS”COUNTY herein. OF DELAWARE PENNSYLVANIA General Obligation$49,420,000 Bonds, Series of 2016 COUNTY OF DELAWARE PENNSYLVANIA Dated: Date of Delivery General Obligation Bonds, Series of 2016 Due: October 1, as shown below The General Obligation Bonds, Series of 2016 (the “Bonds”) will be issued in fully registered form, without coupons, in the denominations of $5,000 or integral multiples Dated:thereof. The Date Bonds of will Delivery pay interest semi-annually on April 1 and October 1 of each year, commencing Due: October April 1, 2016. 1, Theas Bondsshown are being below issued pursuant to the Pennsylvania Local Government Unit Debt Act, 53 Pa. C.S. Chs. 80-82 (the “Act”), and under an ordinance (the “Ordinance”) enacted by the Council of the County of Delaware, Pennsylvania The General (the “County”)Obligation and,Bonds, when Series issued, of 2016 will (the be registered“Bonds”) willin the be nameissued of in Cede fully ®istered Co., as form,nominee without for The coupons, Depository in the deTrustnominations Company, of New York, New York$5,000 (“DTC”), or integral which multipleswill act asthereof. securities The Bdepositoryonds will pay for interestthe Bonds. semi-annually Beneficial on ownershipApril 1 and interests October in1 ofthe each Bonds year, willcommenci be recordedng April in 1,book-entry-only 2016. The form in denominationsBonds of are $5,000 being or issued any integral pursuant multiple to the Pennsylvaniathereof. Principal Local of Government and interest Unit on the Debt Bonds Act, are53 payablePa. C.S. directlyChs. 80-82 to CEDE (the “ Act& CO.”), and for underredistribution an ordinance to DTC (the Participants “Ordinance”) enacted by the Council of the County of Delaware, Pennsylvania (the “County”) and, when issued, will be registered in the name of Cede & and in turn to Beneficial Owners as described herein. Purchasers will not receive physical delivery of certificates representing their ownership interests in the Bonds Co., as nominee for The Depository Trust Company, New York, New York (“DTC”), which will act as securities depository for the Bonds. Beneficial purchased.ownership For so long interests as any in purchaser the Bonds is will the beBeneficial recorded inOwner book-entry- of a Bond,only formsuch inpurchaser denominations must maintainof $5,000 an or account any integral with multiplea broker thereof.or dealer Principal who is, ofor andacts through, a DTC Participantinterest toon receive the Bonds payment are payable of the principaldirectly to of CEDE and interest & CO. on for such redi stributionBonds. See to “BOOK-ENTRY-ONLYDTC Participants and in turnSYSTEM.” to Beneficial Owners as described herein. Purchasers will not receive physical delivery of certificates representing their ownership interests in the Bonds purchased. For so long as any purchaser is the The BeneficialBonds are Owner not subject of a Bond, to optional such purchaser or mandatory must maintain redemption. an account with a broker or dealer who is, or acts through, a DTC Participant to receive payment of the principal of and interest on such Bonds. See “BOOK-ENTRY-ONLY SYSTEM.” The proceeds from the sale of the Bonds, together with certain other available funds of the County, will be used to: (i) redeem the outstanding General Obligation The Bonds are not subject to optional or mandatory redemption. Bonds, Series of 2005 and (ii) pay the costs and expenses related to the issuance of the Bonds. See “THE FINANCING PLAN.” The proceeds from the sale of the Bonds, together with certain other available funds of the County, will be used to: (i) redeem the outstanding THEGeneral BONDS Obligation ARE GENERAL Bonds, Series OBLIGATIONS of 2005 and (ii) pay OF the THE costs COUNTY. and expenses THE related FULL to the FAITH, issuance CREDITof the Bonds. AND See TAXING “THE FINANCING POWER PLAN.”OF THE COUNTY ARE PLEDGED FOR THETHE PUNCTUALBONDS ARE GENERALPAYMENT OBLIGATIONS OF THE PRINCIPAL OF THE OFCOUNTY. AND INTEREST THE FULL FAITH,ON THE CREDIT BONDS. AND THE TAXING BONDS POWER ARE OFPAYABLE THE FROM AVAILABLECOUNTY REVENUES ARE PLEDGED OF THE FORCOUNTY THE PUNCTUALFROM WHATEVER PAYMENT SOURCE OF THE DERIVED,PRINCIPAL INCLUDING OF AND INTEREST UNLIMITED ON THE AD BONDS.VALOREM THE TAXES BONDS ON REAL ESTATE AREIN THE PAYABLE COUNTY FROM TAXABLE AVAILABLE FOR COUNTY REVENUES PURPOSES. OF THE COUNTY FROM WHATEVER SOURCE DERIVED, INCLUDING UNLIMITED AD VALOREM TAXES ON REAL ESTATE IN THE COUNTY TAXABLE FOR COUNTY PURPOSES. MATURITIES, AMOUNTS, INTEREST RATES, PRICES, YIELDS AND CUSIPs* Maturing Par October 1 Amount Coupon Yield Price CUSIP*

2016$ 3,510,000 2.000% 0.390% 101.021% 246001-ZB0 2017 7,365,000 5.000% 0.670% 107.033% 246001-ZC8 2018 7,635,000 5.000% 0.860% 110.766% 246001-ZD6 2019 7,870,000 5.000% 0.990% 114.285% 246001-ZE4 2020 12,495,000 5.000% 1.110% 117.529% 246001-ZF1 2021 10,545,000 5.000% 1.270% 120.224% 246001-ZG9

This cover pageThis contains cover page certain contains information certain informatfor quickion reference for quick only. reference It is not only. a summary It is not a ofsummary the Official of the Statement.Official Statement. Investors Investors must read must the read entire Official the entire Official Statement to obtain information essential to the making of an informed investment decision. Statement to obtain information essential to the making of an informed investment decision. The Bonds are offered, subject to prior sale, withdrawal or modification of such offer without notice, when, as and if issued by the County and The deliveredBonds are to offered,and received subject by Citigroupto prior sale, Global withdrawal Markets Inc. or modification(the “Underwriter of such”), and offer subject without to the notice, approval when, of aslega andlity ifof issuedthe Bonds by theby RaffaeleCounty &and Puppio, delivered to and received byLLP, Citigroup Bond Counsel, Global whose Markets opinion Inc. to(the such “Underwriter”), effect shall be furnis and hedsubject upon to delivery the approval of the Bonds.of legality Certain of the legal Bonds matters by Raffaelewill be p assed& Puppio, upon forLLP, the Bond County Counsel, by whose its Solicitor, Michael L. Maddren, Esquire and by McNichol, Byrne & Matlawski, P.C., special counsel to the County, and for the Underwriter by its opinion to such effect shall be furnished upon delivery of the Bonds. Certain legal matters will be passed upon for the County by its Solicitor, Michael L. Maddren, Esquire counsel, Buchanan Ingersoll & Rooney PC. The County expects the Bonds will be available for delivery in definitive form to DTC in New York, New York on and by McNichol,or about February 12, 2016. Byrne & Matlawski, P.C., special counsel to the County, and for the Underwriter by its counsel, Buchanan Ingersoll & Rooney PC. The County expects the Bonds will be available for delivery in definitive form to DTC in New York, New York on or about February 12, 2016. Citigroup Dated: January 14, 2016 Citigroup

Dated: January 14, 2016 * * The CUSIP The numbers CUSIP shownnumbers have shown been have assigned been toassigne the Bondsd to the by Bondsthe CUSIP by the Service CUSIP Bureau, Service an Bureau organization, an organization not affiliated not affiliatedwith the withCounty the orC theounty Underwriter, or the and are included solelyUnderwriter, for the and convenience are included of solely the holders for the ofconvenience the Bonds. of Neitherthe holders the ofCounty the Bonds. nor the Neither Underwriter the County is responsible nor the Underwriter for the selection is responsible of the for CUSIP the selection numbers, nor are any representationsof the CUSIP made numbers, as to their nor are correctness any representations on the Bonds made or as as to indicated their correctness herein. on the Bonds or as indicated herein.

GOVERNMENT CENTER BUILDING MEDIA, PENNSYLVANIA 19063 ______

COUNTY COUNCIL MARIO J. CIVERA, JR., Chairman COLLEEN P. MORRONE, Vice Chairman JOHN P. MCBLAIN, Member DAVID J. WHITE, Member MICHAEL F. CULP, Member ______

COUNTY OFFICIALS MARIANNE GRACE Executive Director

MICHAEL L. MADDREN, Esquire EDWARD E. O’LONE, CPA Solicitor Controller

ANNE M. COOGAN JOHN A. DOWD County Clerk Treasurer

JAMES P. HAYES, CPA Budget Director ______

RAFFAELE & PUPPIO, LLP Media, Pennsylvania Bond Counsel

BUCHANAN INGERSOLL & ROONEY PC TD BANK, N.A. Philadelphia, Pennsylvania Philadelphia, Pennsylvania Underwriter’s Counsel Fiscal Agent

BAKER TILLY VIRCHOW KRAUSE, LLP CALHOUN BAKER INC. Philadelphia, Pennsylvania Flourtown, Pennsylvania Independent Auditor Municipal Advisor

MCNICHOL, BYRNE & MATLAWSKI, P.C. Media, Pennsylvania Special Counsel

The information set forth herein has been provided by the County, DTC and by other sources believed to be reliable, but it is not guaranteed as to its accuracy or completeness. Where the constitution or statutes of the Commonwealth of Pennsylvania or other documents are referred to, reference should be made to such constitution, statutes or documents for complete statements of the matters referred to. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.

This Official Statement is not to be construed as a contract or agreement between the County and the purchasers or owners, from time to time, of any of the Bonds. The information and expressions of opinion contained 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, DTC or others since the date hereof or the earlier dates as of which particular information is given.

Certain statements included in this Official Statement constitute "forward-looking statements." Such statements generally are identifiable by the terminology used, such as "plan," "expect," "estimate," "budget" or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known or unknown risks, uncertainties and other factors that may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The County does not plan to issue any updates or revisions to those forward-looking statements if or when its expectations of the events, conditions or circumstances on which such statements are based change.

The Underwriter may offer and sell the Bonds to certain dealers (including dealers depositing Bonds into investment trusts) and others at prices lower than the public offering prices stated on the inside cover hereof.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME WITHOUT PRIOR NOTICE.

THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACT. THE REGISTRATION OR QUALIFICATION OF THE BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF CERTAIN STATES, IF ANY, IN WHICH THE BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN CERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.

The order and placement of materials in this Official Statement, including the appendices, are not to be deemed to be a determination of relevance, materiality or importance, and this Official Statement, including the appendices, must be considered in its entirety. The offering of the Bonds is made only by means of this entire Official Statement.

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.

This Official Statement is submitted in connection with the sale of the securities referred to herein, and may not be reproduced or be used, in whole or in part, for any other purpose.

TABLE OF CONTENTS

INTRODUCTION ...... 1

THE BONDS ...... 2 TRANSFER AND EXCHANGE ...... 2 SECURITY ...... 3 THE SINKING FUND ...... 3

BOOK-ENTRY-ONLY SYSTEM ...... 3

THE FINANCING PLAN ...... 5 ESTIMATED SOURCES AND USES OF FUNDS ...... 5 DEBT SERVICE SCHEDULE OF THE BONDS ...... 6

THE COUNTY ...... 7 COUNTY GOVERNMENT ...... 7 Employees and Labor Relations ...... 7 County Retirement Fund ...... 8 Other Post-Employment Benefits ...... 9 Human Services ...... 9 Library Services ...... 9 Judicial and Public Safety Services ...... 10 Parks and Recreation ...... 10 County Taxing Power ...... 10 REAL ESTATE PROPERTY TAX ...... 10 INVESTMENTS ...... 12 FINANCIAL RESULTS OF COUNTY OPERATIONS ...... 12 Basis of Accounting ...... 12 All Governmental Funds ...... 14 General Fund ...... 16 Capital Projects Fund ...... 18 Health and Human Service Funds ...... 20 Other Governmental Funds ...... 22 Fair Acres Geriatric Center ...... 23 Delaware County Solid Waste Authority ...... 25

DEBT OBLIGATIONS AND DEBT CAPACITY ...... 28 COUNTY BORROWING BASE AND BORROWING CAPACITY ...... 29 CAPITAL IMPROVEMENT PROGRAM AND FUTURE FINANCINGS ...... 31 DEBT SERVICE PAYMENTS ...... 32

TAX MATTERS ...... 38 EXCLUSION OF INTEREST FROM GROSS INCOME ...... 38 ORIGINAL ISSUE PREMIUM ...... 38 OTHER FEDERAL TAX MATTERS ...... 38 PENNSYLVANIA ...... 38

LEGAL MATTERS ...... 39

LEGALITY FOR INVESTMENT ...... 39

REMEDIES OF REGISTERED OWNERS ...... 39

CERTAIN LEGAL PROCEEDINGS ...... 40

NO LITIGATION AFFECTING THE BONDS ...... 40

ADDITIONAL INFORMATION AND CONTINUING DISCLOSURE ...... 41 ADDITIONAL INFORMATION ...... 41 CONTINUING DISCLOSURE ...... 41

INDEPENDENT AUDITORS ...... 41

FINANCIAL ADVISOR ...... 41

UNDERWRITING ...... 42

RATINGS ...... 42

CERTAIN REFERENCES ...... 43

APPENDIX I SOCIOECONOMIC AND DEMOGRAPHIC CHARACTERISTICS OF THE COUNTY OF DELAWARE ...... I-1

APPENDIX II COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014 ...... II-1

APPENDIX III PROPOSED FORM OF BOND COUNSEL OPINION ...... III-1

APPENDIX IV FORM OF CONTINUING DISCLOSURE AGREEMENT ...... IV-1

______

This Table of Contents is for convenience of reference only and does not list all of the subjects in this Official Statement. In all instances, references should be made to the complete Official Statement to determine subjects discussed herein.

The order of placement of material in this Official Statement, including Appendices, is not to be deemed a determination of relevance, materiality or importance, and this Official Statement, including Appendices, must be considered in its entirety.

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

Official Statement $49,420,000 COUNTY OF DELAWARE, PENNSYLVANIA General Obligation Bonds, Series of 2016

INTRODUCTION

The General Obligation Bonds, Series of 2016 (the “Bonds”) will be issued by the County of Delaware, Pennsylvania (the “County”) in the aggregate principal amount of $49,420,000. The issuance of the Bonds is authorized under the provisions of the Pennsylvania Local Government Unit Debt Act, 53 Pa. C.S. Chs. 80-82 (the “Act”), the Home Rule Charter (the “Charter”) of the County, and an Ordinance enacted by the Council (the “Council”) of the County on January 13, 2016 (the “Ordinance”). Issuance of the Bonds will be approved by the Department of Community and Economic Development of the Commonwealth of Pennsylvania pursuant to the Act prior to delivery of the Bonds. The Bonds will be issued in authorized denominations of $5,000 and any integral multiple thereof.

The Bonds initially will be issued solely in book-entry-only form, registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”). So long as the Bonds are held in the book-entry-only system, DTC or its nominee will be the registered owner of the Bonds for all purposes of the Act, the Ordinance, the Bonds and this Official Statement. Unless the book-entry system for the Bonds is discontinued, prospective purchasers will acquire beneficial ownership interests in the Bonds, in denominations of $5,000 or any integral multiple thereof, but will not receive Bond certificates representing such ownership interest. For purposes of this Official Statement, DTC or its nominee, and its successors and assigns, are referred to as the “Securities Depository.” See “BOOK-ENTRY- ONLY SYSTEM,” herein.

The proceeds from the sale of the Bonds will be used to: (i) redeem the outstanding General Obligation Bonds, Series of 2005 (the “2005 Bonds”) maturing on and after October 1, 2016, and (ii) pay the costs and expenses related to the issuance of the Bonds. See “THE FINANCING PLAN.”

TD Bank, N.A., Philadelphia, Pennsylvania will act as Fiscal Agent for the Bonds (the “Fiscal Agent”). The designated corporate trust office of the Fiscal Agent is Philadelphia, Pennsylvania or such other office designated in writing by the Fiscal Agent.

Neither the delivery of this Official Statement nor any sale of the Bonds shall, under any circumstances, create any implication that no changes have occurred in the affairs of the County, or the communities or areas within the County, since the date of this Official Statement or, if earlier, the dates as of which particular information contained in this Official Statement is given. The descriptions in this Official Statement of the Bonds, certain provisions of the Act, and the Ordinance are qualified by reference to the complete text of such instruments and documents, copies of which are available at the principal office of the Fiscal Agent. Upon request to the Office of the Executive Director, the County will provide the latest available audited Comprehensive Annual Financial Report, the most recently adopted budget, the Ordinance, and other documents related to the sale of the Bonds. See “ADDITIONAL INFORMATION AND CONTINUING DISCLOSURE” herein.

In order to enable the Underwriter to comply with the requirements of Rule 15c2-12(b)(5) of the Securities Exchange Commission (the “Rule”), the County and the Fiscal Agent will enter into a Continuing Disclosure Agreement, dated the date of delivery and payment of the Bonds (the “Disclosure Agreement”), providing for, among other things, the disclosure of the occurrence, if any, of certain events material to the Bonds. The Disclosure Agreement constitutes a written undertaking for the benefit of the registered owners from time to time of the Bonds. See “ADDITIONAL INFORMATION AND CONTINUING DISCLOSURE” and “APPENDIX IV – FORM OF CONTINUING DISCLOSURE AGREEMENT” attached hereto for additional information..

1 THE BONDS

The Bonds refer to the Ordinance and the Act and provide that each registered and beneficial owner thereof by acceptance of such Bond (including receipt of a book-entry credit evidencing an interest therein) assents to the provisions of the Ordinance and the Act as an explicit and material portion of the consideration running to the County to induce it to enact the Ordinance, and to issue such Bond. Copies of the Ordinance, including the full text of the form of the Bonds, are on file at the designated corporate trust office of the Fiscal Agent and are available for inspection and copying. The following summaries of certain provisions of the Bonds are qualified by reference to the Ordinance.

The Bonds will be dated the date of original delivery (the “Issue Date”), will bear interest at the rates, mature on the dates and in the amounts and be offered at the initial prices or yields, all as set forth on the cover page of this Official Statement. Interest on the Bonds is payable semiannually on April 1 and October 1 (each an “Interest Payment Date”) of each year, commencing April 1, 2016, until maturity. Interest on the Bonds will be calculated on the basis of a 360-day year of twelve 30-day months.

The principal of the Bonds will be paid upon presentation and surrender of the Bonds at the designated corporate trust office of the Fiscal Agent in Philadelphia, Pennsylvania or such other corporate trust office designated in writing by the Fiscal Agent.

Interest on the Bonds will be paid by a check drawn on the Fiscal Agent and mailed to the person in whose name such Bond is registered at the close of business on the fifteenth (15th) day (whether or not a business day) of the calendar month next preceding the relevant Interest Payment Date (the “Regular Record Date”), irrespective of any transfer or exchange of such Bond subsequent to such Regular Record Date and prior to such Interest Payment Date. Such check shall be mailed to such person at his or her address as it appears on the registration books maintained on behalf of the County (the “Bond Register”) on the Regular Record Date.

Any interest on the Bonds which is payable, but is not punctually paid or provided for on any Interest Payment Date, shall cease to be payable to the registered owner on the relevant Regular Record Date, and such defaulted interest shall be paid to the registered owner in whose name the Bond is registered at the close of business on the fifteenth (15th) calendar day (the “Special Record Date”) preceding the date set for the payment of such defaulted interest (the “Special Payment Date”). The Fiscal Agent shall cause notice of the proposed payment of such defaulted interest on the Special Payment Date to be mailed, first class postage prepaid, to each such registered owner at his or her address as it appears in the Bond Register, not less than ten (10) days prior to such Special Payment Date.

The provisions of the preceding paragraphs notwithstanding, so long as the Bonds are registered in the name of the Securities Depository, or its nominee, to the extent available, the Fiscal Agent shall transfer: (i) on each Interest Payment Date, the amount of interest due on each such date to the Securities Depository; and (ii) on each principal payment date, upon surrender of the Bonds maturing on such date, the amount of principal due on each such date to the Securities Depository, which amounts so transferred, shall be, on the interest and principal payment date, at the principal office of the Securities Depository, in immediately available funds. All payments made by the Fiscal Agent to the Securities Depository or its nominee shall fully satisfy the County obligations to pay principal of and interest on the Bonds to the extent of such payments, and no beneficial owner of any interest in any Bond registered in the name of the Securities Depository or its nominee shall have any recourse against the County hereunder for any failure by the Securities Depository or any direct or indirect participant therein to remit such payments to any beneficial owner of such Bonds.

The Bonds are not subject to optional or mandatory redemption.

TRANSFER AND EXCHANGE The Bonds are transferable and exchangeable for other authorized denominations by the registered owners thereof, upon presentation and surrender at the designated corporate trust office of the Fiscal Agent. No transfer of the Bonds shall be valid unless made by the registered owner in person or by his duly authorized attorney at the

2 principal corporate trust office of the Fiscal Agent, upon surrender of the Bond accompanied by a duly executed instrument of transfer in form and with guaranty of signature satisfactory to the Fiscal Agent.

SECURITY THE BONDS ARE GENERAL OBLIGATIONS OF THE COUNTY. THE FULL FAITH, CREDIT AND TAXING POWER OF THE COUNTY ARE PLEDGED FOR THE PUNCTUAL PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE BONDS. THE BONDS ARE PAYABLE FROM AVAILABLE REVENUES OF THE COUNTY FROM WHATEVER SOURCE DERIVED, INCLUDING UNLIMITED AD VALOREM TAXES ON REAL ESTATE IN THE COUNTY TAXABLE FOR COUNTY PURPOSES.

Pursuant to the requirements of the Act and as provided in the Ordinance, the County covenants with the holders of the Bonds that it shall: (i) include in its budget, for each fiscal year, the amount of the debt service on the Bonds due in such fiscal year; (ii) appropriate such amounts from its general revenues for the payment of such debt service; and (iii) duly and punctually pay or cause to be paid from its sinking fund or any other of its general revenues or funds, the principal of the Bonds and other interest thereon, at the dates and place and in the manner stated in the Bonds. For such budgeting, appropriation and payment, the County pledges its full faith, credit and taxing power. The Act provides that this covenant is specifically enforceable.

THE SINKING FUND A sinking fund, designated “Sinking Fund, County of Delaware, Pennsylvania, General Obligation Bonds, Series of 2016” (the “Sinking Fund”), shall be created by the Ordinance and funds deposited therein shall be held by the Fiscal Agent. All funds deposited in the Sinking Fund pursuant to the Ordinance shall be segregated from all other funds of the County. Under the Ordinance, the County is required to deposit in the Sinking Fund no later than the business day next preceding each date when principal of or interest on the Bonds is to become due, a sufficient sum so that on each such payment date the Sinking Fund will contain, together with any other available funds in it, sufficient money to pay in full the principal of or interest on the Bonds then due. The Fiscal Agent is authorized and directed in the Ordinance to transfer from the Sinking Fund sums necessary to pay the principal of and interest on the Bonds when due.

The Sinking Fund shall be secured and invested by the Fiscal Agent in securities or deposits authorized by the Act, upon written direction of the County. Such deposits and securities shall be in the name of the County but shall be subject to withdrawal or collection only by the Fiscal Agent. Such deposits and securities, together with the interest earned thereon, shall be a part of the Sinking Fund.

BOOK-ENTRY-ONLY SYSTEM

The information in this section concerning DTC and DTC’s book-entry system was obtained from DTC. Neither the County nor the Underwriter takes any responsibility for the accuracy or completeness thereof.

DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered bond certificate will be issued for the Bonds of each maturity, in the aggregate principal amount of the Bonds of such maturity, and will be deposited with DTC.

DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million 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

3 corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S., securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

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

To facilitate subsequent transfers, all 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 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such 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. Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions, and dividend payments on the 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 Fiscal Agent, 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 nor its nominee, the Fiscal Agent, 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 Fiscal Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the County or the Fiscal Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

4 The County may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, 2015 Bond certificates will be printed and delivered.

NEITHER THE COUNTY NOR THE FISCAL AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO THE DTC PARTICIPANTS, THE INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO: (1) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT; (2) THE PAYMENT OF ANY AMOUNT DUE TO ANY DTC PARTICIPANT, ANY INDIRECT PARTICIPANT OR BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF OR INTEREST ON THE BONDS; (3) THE DELIVERY OF ANY NOTICE TO ANY DTC PARTICIPANT, ANY INDIRECT PARTICIPANT OR BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE BONDS TO BE GIVEN TO BONDHOLDERS; OR (4) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS BONDHOLDER.

SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE BONDHOLDERS OR REGISTERED OWNERS OF THE BONDS SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS. PAYMENTS MADE BY THE FISCAL AGENT TO DTC OR ITS NOMINEE SHALL SATISFY THE COUNTY’S OBLIGATIONS WITH RESPECT TO THE BONDS TO THE EXTENT OF SUCH PAYMENTS.

THE FINANCING PLAN

The proceeds from the sale of the Bonds will be used to: (i) redeem on the Issue Date of the Bonds (the “Redemption Date”) the outstanding 2005 Bonds maturing on and after October 1, 2016, at a redemption price of par plus the accrued interest to the Redemption Date, and (ii) pay the costs and expenses related to the issuance of the Bonds. Approximately, $55,794,000* of the proceeds of the Bonds will be disbursed to the Fiscal Agent of the 2005 Bonds in order to pay the principal of and a portion of the interest on the 2005 Bonds due on the Redemption Date.

ESTIMATED SOURCES AND USES OF FUNDS The estimated sources and uses of the proceeds of the Bonds are set forth below.

Estimated Sources and Uses of Funds*

Sources of Funds Par amount of Bonds $ 49,420,000.00 Original Issue Premium (Discount) 6,822,900.50 Other available funds of the County 1,000,317.34 Total sources of funds $ 57,243,217.84

Uses of Funds Redemption of the 2005 Bonds Principal $ 55,780,000.00 Accrued interest 1,014,886.11 Underwriters' discount 257,505.09 Other costs of issuance 190,826.64 Total uses of funds $ 57,243,217.84

* Preliminary, subject to change.

5 DEBT SERVICE SCHEDULE OF THE BONDS Set forth below is the schedule for debt service payments of the Bonds. The debt service of the Bonds will be structured to provide approximately level, total, annual debt service payments as permitted by the Act.

County of Delaware General Obligation Bonds, Series of 2016 Debt Service Payments Bond Year Annual Total Ending Par Interest Annual October 1 Amount Coupon Yield Price CUSIP* Payment Payment 2016 $ 3,510,000 2.000% 0.390% 101.021% 246001-ZB0 $ 1,504,848.06 $ 5,014,848.06 2017 7,365,000 5.000% 0.670% 107.033% 246001-ZC8 2,295,500.00 9,660,500.00 2018 7,635,000 5.000% 0.860% 110.766% 246001-ZD6 1,927,250.00 9,562,250.00 2019 7,870,000 5.000% 0.990% 114.285% 246001-ZE4 1,545,500.00 9,415,500.00 2020 12,495,000 5.000% 1.110% 117.529% 246001-ZF1 1,152,000.00 13,647,000.00 2021 10,545,000 5.000% 1.270% 120.224% 246001-ZG9 527,250.00 11,072,250.00 Total $ 49,420,000 $ 8,952,348.06 $ 58,372,348.06

* The CUSIP numbers shown have been assigned to the Bonds by the CUSIP Service Bureau, an organization not affiliated with the County or the Underwriter, and are included solely for the convenience of the holders of the Bonds. Neither the County nor the Underwriter is responsible for the selection of the CUSIP numbers, nor are any representations made as to their correctness on the Bonds or as indicated herein.

6 THE COUNTY

COUNTY GOVERNMENT Since January 1976, the County has been governed by the provisions of its Home Rule Charter (the “Charter”). The Charter provides for an elected Council of five members. The Council, whose members serve for staggered four-year terms, is the legislative body of the County, with powers and duties, inter alia, to adopt, amend and repeal the County Administrative Code; to conduct inquiries and investigations into County government operations; to make appropriations, levy taxes, incur indebtedness and adopt annual County operating and capital budgets; to compel attendance of witnesses and production of documents; to set the compensation and number of County employees in each unit of County government; to purchase, acquire, hold, lease and convey real and personal property; to establish and abolish County boards and commissions; to establish, abolish and reorganize departments and programs within certain limits imposed by the Charter; to provide for enforcement of ordinances; to provide a personnel management system; to appoint heads of administrative and other departments falling under direct Council supervision; to legislate in respect of intergovernmental programs involving negotiations with federal, state and local units; to enter into service agreements with other local governments; and to legislate concerning County participation in development programs such as mass transit, housing, land use, waste disposal and internal affairs. Under the Charter, the Delaware County Institution District, which was responsible for child care and adult welfare (some of the latter function being concentrated at Fair Acres Geriatric Center), was merged into the County in 1978.

The Charter further provides that the Council shall appoint a County Executive Director of demonstrated administrative and management competence who shall be responsible for the administration of County departments not directly managed by the Council, and who shall serve a two-year term and be eligible for reappointment to an unlimited number of terms. Marianne Grace currently serves as County Executive Director and has held that post since April 23, 2001.

EMPLOYEES AND LABOR RELATIONS As of December 31, 2014, approximately 3,031 full-time and 493 part-time employees were employed by the County. Of these employees, approximately 1,995 were represented by collective bargaining units. The principal bargaining units and the expiration dates of their contracts are set forth below:

• Approximately 631 non-professional employees at the County’s Fair Acres Geriatric Center are represented by Teamster Union, Local 77, with a four-year contract that expired on November 30, 2015. Negotiations are in process.

• Approximately 41 administrative and clerical employees at the Fair Acres Geriatric Center are represented by Teamsters Union, Local 312, with a contract expiring on March 31, 2016.

• The Pennsylvania Association of Staff Nurses and Allied Professionals ("PASNAP") represent 192 registered nurses and licensed practical nurses employed by Fair Acres, with a contract that expired on December 31, 2015. A tentative agreement has been approved by the membership of the union, but the County has not yet approved it.

• Six County trash transfer station workers are represented by Teamsters Union, Local 77, whose contract with the County expires on April 15, 2016.

• The County has a collective bargaining agreement with approximately 140 employees of the Delaware County Children and Youth Services, represented by the Pennsylvania Social Services Union, Local 668, an affiliate of the Service Employees International Union, AFL-CIO. This agreement expires on March 1, 2016.

• The Delaware County Public Employees Association, Local 3107 of the American Federation of State, County and Municipal Employees (“AFSCME”), represents two groups (and several subgroups) of employees. One group, composed of approximately 311 non-professional employees of the Thirty-Second Judicial District (coterminous with the County), has a contract which expires on February 7, 2017. The other group of

7 approximately 355 employees, which includes all other non-professional and some professional employees of the elected row offices of the County and the Council, also has a contract which expires on February 7, 2017.

• The County has a collective bargaining agreement with approximately 34 County detectives in the Criminal Investigation Division of the Office of the District Attorney, represented by Fraternal Order of Police Lodge 27. This agreement expires on December 31, 2017.

• The County has a collective bargaining agreement with approximately 97 employees of the Office of Intellectual Disabilities and County Office for Services for the Aging with the Teamsters Union, Local 115. This contract expires on December 31, 2016.

• Approximately 144 employees in the County Departments of Domestic Relations, Adult Probation, and Juvenile Probation are represented by the Pennsylvania Social Services Union. This contract expires on December 31, 2018.

• An independent union represents 44 County Park Police officers. This contract expired on December 31, 2015. A tentative agreement has been reached, but it has not yet been approved by the membership of the union or the County.

COUNTY RETIREMENT FUND The County has a contributory retirement system for all full-time County employees. Currently, employees are required to contribute 7% of their annual covered salary, and they may elect to contribute up to 17% of their annual covered salary. The County makes payments into the fund annually in amounts that are actuarially determined to be necessary to keep the system fully funded. Below is a summary of Changes in Fiduciary Net Assets for the past five years. See “Note 13. Employees’ Retirement Plan” in “APPENDIX II – COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014” attached hereto for additional information.

Funding Status of the Employees’ Retirement Plan Year Ended December 31 2010 2011 2012 2013 2014 Plan members Inactive, receiving benefits 1,280 1,321 1,456 1,451 1,449 Inactive, not yet receiving benefits 173 175 184 192 208 Current employees 3,227 3,259 3,146 3,190 3,215 Total members 4,680 4,755 4,786 4,833 4,872

Annual covered payroll $ 132,732,792 $ 128,948,072 $ 126,634,013 $ 131,611,940 $ 134,056,126

Annual required contribution $ 6,756,099 $ 5,944,506 $ 7,142,158 $ 7,146,528 $ 4,159,063 Contributions made (6,756,099) (5,944,506) (7,142,158) (7,146,528) (4,159,063)

Actuarial value of plan assets $ 341,663,573 $ 361,731,534 $ 376,064,142 $ 394,832,504 $ 463,376,325 Actuarial accrued liability 361,786,934 376,516,179 401,197,966 415,610,877 448,152,742 Unfunded actuarial liability (asset) $ 20,123,361 $ 14,784,645 $ 25,133,824 $ 20,778,373 $ (15,223,583)

Funded ratio 94.44% 96.07% 93.74% 95.00% 103.40%

Ratio of unfunded liability (asset) to annual covered payroll 15.16% 11.47% 19.85% 15.79% -11.36%

Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

8 OTHER POST-EMPLOYMENT BENEFITS The County's retiree health plan is a single-employer plan administered by the County that provides postretirement medical and life insurance benefits (OPEB) to eligible retirees. Plan members do not contribute to the plan; the County pays 100% of the cost of coverage for the retired covered employees. The plan is unfunded. The County's annual OPEB cost is calculated based on the annual required contribution (equal to the normal cost and the amortization of the unfunded actuarial accrued liability plus interest) determined in accordance with the parameters of the Government Accounting Standards Board Statement No. 45. Below is a summary of the costs and obligations for the past five fiscal years. See “Note 23. Other Post-Employment Benefits” in “APPENDIX II – COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014” attached hereto for additional information.

Funding Status of Other Post-Employment Benefits Year Ended December 31 2010 2011 2012 2013 2014 Annual covered payroll $ 127,960,363 $ 131,212,146 $ 134,154,209 $ 148,593,000 $ 148,593,000

Annual required contribution $ 30,608,000 $ 25,958,000 $ 27,277,000 $ 29,175,000 $ 30,766,000 Interest on OPEB obligation 1,947,000 3,039,000 3,736,000 4,468,000 5,348,000 Adjustment to annual required contribution (1,652,000) (2,579,000) (3,170,000) (3,792,000) (4,538,000) Annual OPEB cost 30,903,000 26,418,000 27,843,000 29,851,000 31,576,000 Contributions made (6,655,000) (10,921,000) (11,578,000) (10,296,000) (11,749,000) Beginning OPEB obligation 43,276,000 67,524,000 83,021,000 99,286,000 118,841,000 Net OPEB obligation, year ending $ 67,524,000 $ 83,021,000 $ 99,286,000 $ 118,841,000 $ 138,668,000

Actuarial accrued liability as of January 1 $ 308,751,000 $ 275,677,000 $ 291,875,000 $ 292,385,000 $ 312,524,000 Actuarial value of plan assets - - - - - Unfunded actuarial liability $ 308,751,000 $ 275,677,000 $ 291,875,000 $ 292,385,000 $ 312,524,000

Ratio of unfunded liability (asset) to annual covered payroll 241.29% 210.10% 217.57% 196.77% 210.32% Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

HUMAN SERVICES The Department of Human Service directs Children and Youth Services, the Office of Behavioral Health, the Office of Intellectual Disabilities, the Drug and Alcohol Commission and the Office of Adult and Family Services. Children and Youth Services is responsible for the provision of child protection services to abused and neglected children and their families. The offices of Behavioral Health and Intellectual Disabilities, through their contracted agencies, provide emergency services, outpatient services, hospitalization, vocational and social rehabilitation, family support and housing.

The County operates Fair Acres Geriatric Center (“Fair Acres”) which offers long-term, intermediate, and skilled care for over 900 residents and consists of eighteen buildings on a 210 acre campus in Lima, Pennsylvania. Residents range in age from young adult to elderly. Admission criteria are established on a medical and financial need basis. Fair Acres provides a full range of residential services: Nursing Staff; Physicians; Pharmaceutical; Therapeutic Activity Services; Volunteer Office; Physical, Occupational, Speech and Respiratory Therapy. Fair Acres also offers many personal services to the residents: gift shop; beauty parlor; barber shop; a residential newspaper; and free laundries.

LIBRARY SERVICES The Delaware County Library System (“DCLS”) is a department of county government designated to support the provision of public library services to the citizens of the County. DCLS also supervises the County’s Law Library and the resident library for Fair Acres. Each of the 26 public libraries in the County is a member of DCLS. The libraries remain autonomous, with individual policy setting boards, funding and management. DCLS provides support services and cooperative programs for the libraries. In 1984, DCLS was designated by the State

9 Library of Pennsylvania as a District Library Center. As such, DCLS receives additional funding to provide additional reference and research needs. Primary services include: a county-wide computerized catalog of library holdings, continuing education, delivery services, consulting services, and rotating collections of books, video cassettes and audio tapes. DCLS staff includes certified librarians with specialties in reference; technology; media and children’s services.

JUDICIAL AND PUBLIC SAFETY SERVICES The Court of Common Pleas of Delaware County encompasses a Criminal Court, a Civil Court, a Family Court, an Orphans’ Court, a Juvenile Court, a Minor Judiciary, and a Domestic Relations Section. The Minor Judiciary consists of 31 District Courts, which process motor vehicle violations, summary offenses, local ordinance violations, small civil claims, and arraignments and preliminary hearings of criminal cases. The Domestic Relations Section provides for the collection and processing of payments to custodial parents and other legal matters.

The elected District Attorney is responsible for prosecuting criminal offenses and advising police and County departments on matters relating to criminal investigations.

An independently elected Sheriff’s Department provides for criminal transport, courtroom security, and service of process and various civil and criminal legal documents. The County prison currently houses approximately 1,800 inmates.

The County operates a countywide 911 emergency response system. The capital and operating costs of the system are supported by distributions of an uniform, monthly surcharge of $1.65 on each telecommunications device capable of transmitting a 911 call that is assessed on telephone bills by the Commonwealth of Pennsylvania and by appropriations from the County’s General Fund.

PARKS AND RECREATION The County currently operates and maintains over 620 acres of facilities at six major parks: Clayton Park and Golf Course, Glen Providence Park, Kent Park, Rose Tree Park, Smedley Park, and Upland Park. In addition to hiking trails, picnic areas and athletic fields, the parks feature historical landmarks, a nine-hole golf course, a community theater and educational facilities.

COUNTY TAXING POWER The County levies its own taxes and is independent of any other taxing authority. The principal tax is the real estate property tax. The County’s tax assessors maintain all real property assessments in the County and return those assessments, prior to the year of levy, to an assessment board appointed by the Council. The general County tax is levied against those assessments and the revenues from the tax are used for general governmental services and for the payment of the County’s general obligation debt service. The County customarily adopts its budget and determines the real estate property tax rate on or before December 31, prior to the commencement of the ensuing budget year.

REAL ESTATE PROPERTY TAX The County, under the Charter, has the power to tax real estate property without limitation to the extent necessary for general governmental purposes. Real estate property taxes are levied on February 1. Payments received prior to April 2 enjoy a 2% discount; payments received after June 1 suffer a penalty of 10%. Delinquent taxes are certified to the Tax Claim Bureau.

The County commenced the process to reassess all real estate property in the County in 1995. The County assessed the first levy under the revised assessments in 2000. The adopted budget for 2016 established the real estate property tax rate at 5.604 mills. See also “THE COUNTY – FINANCIAL RESULTS OF COUNTY OPERATIONS – General Fund” for additional information.

Historically, the County has enjoyed a very low delinquency rate. Real estate tax rates, assessments, market values, and current levy collections are set forth below.

10 Real Estate Tax Rates, Assessments, Market Values, and Collections Year Ended December 31 Ratio of Current Percent of Assessed Market Assessed to Millage Tax Current Current Levy Year Valuation (1) Value (1) Market Value Rate Levy (2) Collections (2) Collected 2005 $ 28,046,658,392 $ 26,602,563,600 105.43% 4.450 $ 129,598,563 $ 123,852,831 95.57% 2006 29,382,816,075 31,707,366,000 92.67% 4.450 130,728,257 127,218,986 97.32% 2007 29,626,941,450 32,024,865,567 92.51% 4.450 131,839,023 127,269,898 96.53% 2008 30,047,242,006 36,707,429,132 81.86% 4.825 144,796,199 139,522,134 96.36% 2009 30,196,038,909 36,912,967,010 81.80% 4.825 145,303,995 139,193,850 95.79% 2010 30,191,676,749 40,088,021,538 75.31% 5.184 156,775,703 149,741,101 95.51% 2011 30,264,587,789 40,182,183,733 75.32% 5.184 157,648,907 153,602,147 97.43% 2012 30,260,934,976 41,343,951,846 73.19% 5.304 160,579,733 153,849,835 95.81% 2013 30,336,566,567 41,457,785,931 73.17% 5.452 166,258,998 159,849,174 96.14% 2014 30,522,065,196 42,276,366,788 72.20% 5.604 172,242,510 166,260,056 96.53%

(1) Source: State Tax Equalization Board (2) Source: Comprehensive Annual Financial Report for the Year Ended December 31, 2014

Real Estate Assessments by Use Year Ended December 31, 2014

Commercial 18.053% Agriculture 0.003%

Industrial 1.535%

Lots 1.315%

Residen'al 79.094%

Source: State Tax Equalization Board

11 Listed below are the assessments of the ten largest real estate taxpayers in the County:

Ten Largest Real Estate Taxpayers As of December 31, 2014 2014 Assessed Taxpayer Description Valuation Redwood ERC Concord LLC Retirement community $ 120,256,460 Chester Downs & Marina LLC Casino, racetrack, and marina 118,650,000 Radnor Center Associates Office buildings 68,954,300 SAP America Inc. Office buildings 57,509,000 Exelon Generation Company Electric power plant 52,500,000 KS Springfield Shopping center 51,406,800 White Horse Village Retirement community 49,058,970 Radnor Properties Offfice buildings 48,965,641 Campus Investors Offfice buildings 35,724,336 Dunwoody Home Retirement community 31,000,000 Total $ 634,025,507

Percentage of total assessments: 2.077%

Source: Comprehensive Annual Financial Report Year Ended December 31, 2014

INVESTMENTS The County’s investment program is overseen by the County Treasurer. The County limits itself to investments which are permitted by the Second Class County Code of Pennsylvania. The Second Class County Code permits Second Class A counties to invest in the following types of securities:

1. United States Treasury bills. 2. Short-term obligations of the United States Government or its agencies or instrumentalities. 3. Deposits in savings accounts or time deposits, other than certificates of deposit, or share accounts of Pennsylvania institutions insured by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, the National Credit Union Share Insurance Fund, the Pennsylvania Deposit Insurance Corporation or the Pennsylvania Savings Association Insurance Corporation. 4. Obligations of the United States or its agencies backed by the full faith and credit of the United States and obligations of Pennsylvania or its political subdivisions secured by a full faith and credit pledge thereof. 5. Shares of a registered investment company that invests in the instruments listed above. 6. Certificates of deposit from any institution collateralized with a pledge or assignment of assets of the institution, including loans. Certificates of deposit purchased from commercial banks or savings and loans are limited to 20% of the institution’s total capital and surplus. 7. Prime commercial paper of corporations with assets in excess of $1 billion.

The County’s Treasurer directs the investments. Maturing investments are monitored by the County Controller’s Office.

FINANCIAL RESULTS OF COUNTY OPERATIONS

BASIS OF ACCOUNTING The financial statements of the County are prepared in conformity with generally accepted accounting principles (“GAAP”) as applied to government units. The scope of the statements includes operations of governmental units which the County controls or over which the County exercises oversight responsibilities. The accounts are organized on the basis of funds and activities. The major funds are:

12 1) Governmental Funds, 2) Proprietary Funds (including Enterprise Funds), and 3) Fiduciary Funds.

The government-wide financial statements include capital assets and depreciation thereon, as well as the County’s long-term debt for its Governmental and Proprietary Funds.

Governmental Funds The principal Governmental Funds are the General Fund, Capital Projects Funds, and the Health and Human Service Funds. The General Fund is the principal operating fund of the County. The general tax revenues of the County and other revenues that are not designated for a specific purpose are recorded in this fund. The Capital Projects Funds are maintained to account for the financial resources to acquire assets of a relatively permanent nature. The Health and Human Service Funds are maintained to account for the proceeds of specific revenue sources that are legally or administratively restricted for certain uses.

The Other Governmental Funds are maintained to account for the proceeds of specific revenue sources that are legally or administratively restricted for certain uses. These funds include:

1) OET Fund and Other Grant Funds, to account for the grants and operations of the County’s employment and training programs and various other miscellaneous grants;

2) 911 Fund, to account for operations of the County’s emergency communications center;

3) Library Fund, to account for operations and administration of the County library that are funded from grants;

4) Liquid Fuels Fund, to account for maintenance of County bridges and allocations to local municipalities for street repairs that are funded from the County’s share of the Commonwealth’s gasoline taxes;

5) COSA Fund, to account for operations of the County’s Senior Citizen Department that are funded by private contributions, Commonwealth and Federal grants, and appropriations from the County’s General Fund;

6) CDBG/Rehab Fund, to account for grant and redevelopment programs, formerly administered by the Delaware County Redevelopment Authority, that are principally funded from Federal grants; and

7) Marcellus Shale Fund, to account for Act 13 of 2012 impact fees from Marcellus Shale drilling activities.

The Governmental Funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized in the fiscal period in which they are both measurable and available to finance expenditures of that fiscal period. Revenues collected within 60 days after December 31 are generally recognized as revenues for the period ending December 31. Property taxes, licenses, and investment earnings are all considered to susceptible to accrual and have been recognized as revenues of the current period. Expenditures are recognized in the fiscal period in which liabilities are incurred, if measurable, with the exception of expenditures for debt service, which are recognized when paid. Investments are stated at cost.

Proprietary Funds The Proprietary Funds encompass the Internal Services Fund and the Enterprise Fund. The Internal Services Fund accounts for the County’s Health, Casualty/Liability, and Workers’ Compensation Self Insurance Programs. The Enterprise Fund has been established for Fair Acres, to account for operations of the long term care facility that are funded by Commonwealth and Federal grants, service charges, and appropriations from the County’s General Fund.

The Proprietary Funds utilize the accrual basis of accounting. Revenues are recognized in the fiscal period in which they are earned, and expenditures are recognized in the fiscal period in which the liabilities are incurred. Depreciation or depletion of fixed assets is recorded as an expense. Investments are stated at cost.

13 Fiduciary Funds The Fiduciary Funds include the Pension Trust Fund and the Deshong Trust Fund. The Pension Trust Fund accounts for the assets held by the County in a trustee capacity for the benefit of former and current employees of the County. The Deshong Trust Fund accounts for the assets of the expendable trust (i.e., the principal can be expended) obtained by the County from a distribution of the Deshong estate.

The Pension Trust Fund utilizes the accrual basis of accounting. Investments of the Pension Trust Fund are stated at market value. The Deshong Trust Fund utilizes the modified accrual basis of accounting. Investments of the Deshong Trust Fund are stated at cost.

Component Units The Delaware County Solid Waste Authority, Delaware County Economic Development Oversight Board, Redevelopment Authority of the County of Delaware, and Delaware County Chester Waterfront Industrial Development Authority are entities legally separate from the County that are reported as component units. County Council appoints their board members, and the County can exercise control over their operations. For a more complete discussion of these component units see “Component Units” in “APPENDIX II – COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014” attached hereto for additional information.

ALL GOVERNMENTAL FUNDS Summaries of the Statements of Revenues, Expenditures, and Changes in Fund Balance and the Balance Sheets of all governmental funds for the years from 2010 to 2014 are set forth below. Under the provisions of the Pennsylvania Race Horse Development and Gaming Act, the County receives revenue equal to 2% of the gross terminal revenues generated by the slots casino at Harrah’s Chester Racetrack and Casino. Of this amount, 1% may be used for any lawful purpose without restriction, and 1% is restricted to fund municipal grants. Under a separate agreement with Harrah’s negotiated by the Delaware County Redevelopment Authority, the County receives an additional 2% of gross terminal revenue from Harrah’s which is unrestricted and may be used for any lawful purpose. For a more complete discussion of the County’s financial statements, see “APPENDIX II – COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014” attached hereto for additional information.

14 All Governmental Funds Statements of Revenues, Expenditures, and Changes in Fund Balance Year Ended December 31 2010 2011 2012 2013 2014 Revenues Real estate taxes $ 156,371,430 $ 155,756,779 $ 159,605,920 $ 164,860,852 $ 171,551,067 Gaming revenue 9,795,345 10,472,563 10,224,170 9,334,840 8,604,779 Licenses and permits 23,828 36,960 10,125 62,948 17,415 General grants 81,046,110 79,758,176 81,030,796 69,446,178 69,626,188 Charges for services, fines, and forfeits 24,016,541 22,000,400 23,371,602 22,860,520 21,915,998 Investment earnings 1,274,357 1,551,162 1,335,689 1,088,573 1,262,735 Health and human service grants 235,212,559 239,323,976 238,445,980 234,003,423 244,913,281 Other 9,769,447 8,167,796 11,909,751 8,435,747 9,932,293 Total revenues 517,509,617 517,067,812 525,934,033 510,093,081 527,823,756

Expenditures Current: General government 22,571,879 20,655,471 22,144,960 22,575,866 23,146,549 Judicial 52,241,301 47,472,352 49,969,242 50,000,068 50,873,015 Corrections 63,874,323 64,933,176 63,706,711 63,059,037 64,184,935 Transportation 7,245,074 7,024,827 6,799,396 6,921,000 6,921,000 Health and human services 242,129,230 245,787,429 244,872,046 240,428,656 251,336,280 Highways, streets and bridges 986,357 1,248,678 1,385,854 1,187,336 1,555,907 Other 101,227,482 96,179,650 101,708,121 94,686,905 97,066,673 Debt service: Principal 11,141,297 12,384,941 16,023,160 16,179,257 16,861,294 Interest 9,156,658 8,651,294 8,900,486 8,566,563 8,245,198 Debt issuance costs - - - - 210,529 Capital outlay 19,320,464 15,302,712 15,026,734 10,460,337 10,801,510 Total expenditures 529,894,065 519,640,530 530,536,710 514,065,025 531,202,890

Revenues Over (Under) Expenditures (12,384,448) (2,572,718) (4,602,677) (3,971,944) (3,379,134)

Other Financing Sources (Uses) Issuance of bonds and notes 45,180,000 - 20,000,000 25,000,000 38,726,057 Optional redemption of bonds and notes (1) (29,995,000) - - - (38,515,528) Transfers in 11,751,849 15,327,150 13,538,768 16,143,991 21,174,980 Transfers out (17,256,122) (22,641,639) (19,457,498) (20,626,694) (23,247,314) Total other financing sources (uses) 9,680,727 (7,314,489) 14,081,270 20,517,297 (1,861,805)

Special Item Capital grant to component unit - - - - -

Net Change in Fund Balances (2,703,721) (9,887,207) 9,478,593 16,545,353 (5,240,939) Beginning Fund Balance 53,828,364 51,124,643 41,237,436 50,716,029 67,261,382

Ending Fund Balance $ 51,124,643 $ 41,237,436 $ 50,716,029 $ 67,261,382 $ 62,020,443

(1) Stated as an "expenditure" in the Comprehensive Annual Financial Reports. Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

15 All Governmental Funds Balance Sheets Year Ended December 31 2010 2011 2012 2013 2014 Assets Cash and cash equivalents $ 61,429,698 $ 59,948,734 $ 49,157,640 $ 55,252,193 $ 78,307,011 Receivables: Taxes 9,009,212 8,937,562 9,714,530 9,718,457 10,664,682 Accounts 2,555,918 3,134,479 2,804,012 2,458,135 2,601,474 Grants 26,400,420 27,180,137 30,761,308 30,642,380 32,245,371 Notes 4,652,470 4,652,470 4,652,471 4,723,524 5,639,008 Other 569,730 462,707 3,960,324 1,572,162 132,910 Due from component units 7,585,460 7,538,881 7,509,712 7,475,000 7,475,000 Due from other funds 81,504,031 60,498,051 53,527,165 49,959,906 49,387,853 Due from subcontractors 465,238 331,440 347,192 222,377 - Other restricted assets 21,800,700 16,768,279 28,871,178 46,619,450 33,303,579 Other assets 5,612,919 1,812,307 1,094,373 5,776,607 3,156,426 Total assets $ 221,585,796 $ 191,265,047 $ 192,399,905 $ 214,420,191 $ 222,913,314

Liabilities, Deferred Inflows of Resources, and Fund Balances Liabilities Vouchers and accounts payable $ 31,474,852 $ 29,534,674 $ 30,056,314 $ 26,758,597 $ 32,883,814 Payroll payable 2,204,711 2,404,334 3,281,647 3,547,942 3,621,386 Payable from restricted assets 122,489 122,489 122,489 122,489 122,489 Due to other funds 81,918,861 63,001,856 56,542,748 57,079,746 55,094,151 Unearned revenues - - - 35,964,171 39,985,217 Other liabilities 16,053,841 15,844,148 14,915,452 16,168,236 20,362,911 Total liabilities 131,774,754 110,907,501 104,918,650 139,641,181 152,069,968

Deferred inflows of resources Unavaliable revenues - taxes 38,686,399 39,120,110 36,765,226 7,517,628 8,822,903

Fund balances Nonspendable: Prepaid items - 963,322 562,376 1,381,507 1,144,114 Long term receivable 5,475,000 5,475,000 5,475,000 5,475,000 5,475,000 Restricted for: Highways and streets 2,117,979 2,045,289 1,856,882 1,777,099 1,430,456 Infrastructure - - - - 38,358 Library 3,002,528 2,181,260 1,859,136 682,598 609,672 Community development 3,406,100 3,587,712 2,847,493 3,797,657 3,961,639 Title IV D program 724,447 823,268 1,232,444 1,870,555 426,047 Capital projects - - 2,293,963 19,435,592 8,274,442 Assigned to: Capital projects 28,964,903 1,576,451 1,215,875 509,216 424,024 County geriatric center - 11,400,000 11,400,000 11,400,000 12,000,000 Employee healthcare costs - 11,400,000 11,400,000 11,400,000 12,000,000 Unassigned 7,433,686 1,785,134 10,572,860 9,532,158 16,236,691 Total fund balances 51,124,643 41,237,436 50,716,029 67,261,382 62,020,443

Total liabilities, deferred inflows of resources, and fund balances $ 221,585,796 $ 191,265,047 $ 192,399,905 $ 214,420,191 $ 222,913,314

Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

GENERAL FUND Summaries of the Statements of Revenues, Expenditures, and Changes in Fund Balance and the Balance Sheets of the General Fund for the years from 2010 to 2014 are set forth below. For a more complete discussion of the County’s financial statements, see “APPENDIX II – COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014” attached hereto for additional information.

16 General Fund Statements of Revenues, Expenditures, and Changes in Fund Balance Year Ended December 31 2010 2011 2012 2013 2014 Revenues Real estate taxes $ 156,371,430 $ 155,756,779 $ 159,605,920 $ 164,860,852 $ 171,551,067 Gaming revenue 9,795,345 10,472,563 10,224,170 9,334,840 8,604,779 Licenses and permits 23,828 36,960 10,125 62,948 17,415 General grants 26,058,293 26,199,710 25,340,382 24,778,008 24,333,691 Charges for services, fines, and forfeits 24,016,541 22,000,400 23,371,602 22,860,520 21,915,998 Investment earnings 769,206 944,002 1,230,600 934,677 989,914 Other 9,275,776 8,127,343 11,906,685 8,433,514 9,932,293 Total revenues 226,310,419 223,537,757 231,689,484 231,265,359 237,345,157

Revenues Over (Under) Expenditures 17,522,436 22,888,507 19,418,172 17,198,426 20,761,461

Other Financing Sources (Uses) Transfers in - 450,000 450,000 1,922,404 1,060,000 Transfers out (17,256,122) (19,992,634) (19,007,498) (18,704,290) (15,598,829) Total other financing sources (uses) (17,256,122) (19,542,634) (18,557,498) (16,781,886) (14,538,829)

Net Change in Fund Balances 266,314 3,345,873 860,674 416,540 6,222,632 Beginning Fund Balance 7,891,819 30,961,133 (1) 34,307,006 35,167,680 35,584,220

Ending Fund Balance $ 8,158,133 $ 34,307,006 $ 35,167,680 $ 35,584,220 $ 41,806,852

(1) Beginning balance was restated and increased to recognize unassigned fund balances from the Capital Projects Fund. Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

17 General Fund Balance Sheets Year Ended December 31 2010 2011 2012 2013 2014 Assets Cash and cash equivalents $ 29,096,413 $ 43,001,230 $ 28,125,829 $ 30,798,765 $ 58,547,341 Receivables: Taxes 9,009,212 8,937,562 9,714,530 9,718,457 10,664,682 Accounts 2,555,918 3,134,479 2,804,012 2,458,135 2,601,474 Grants 6,775,038 6,168,886 8,417,640 8,096,624 4,896,563 Other 569,730 462,707 132,910 166,295 132,910 Due from component units 2,110,460 2,063,881 2,034,712 2,000,000 2,000,000 Due from other funds 34,444,750 25,170,335 31,821,592 29,153,991 22,453,923 Due from subcontractors - - - - - Other restricted assets 4,349,724 4,261,374 4,513,512 4,772,777 2,336,493 Other assets 1,347,265 963,322 562,376 1,381,507 1,144,114 Total assets $ 90,258,510 $ 94,163,776 $ 88,127,113 $ 88,546,551 $ 104,777,500

Liabilities, Deferred Inflows of Resources, and Fund Balances Liabilities Vouchers and accounts payable $ 10,345,390 $ 8,758,776 $ 10,658,793 $ 9,268,683 $ 10,970,640 Payroll payable 2,204,711 2,404,334 3,281,647 3,547,942 3,621,386 Payable from restricted assets 122,489 122,489 122,489 122,489 122,489 Due to other funds 46,740,093 29,029,262 18,516,877 18,285,669 26,224,826 Unearned revenues - - - 4,653,785 2,513,661 Other liabilities 13,389,805 10,458,870 9,829,080 9,566,135 10,694,743 Total liabilities 72,802,488 50,773,731 42,408,886 45,444,703 54,147,745

Deferred inflows of resources Unavaliable revenues - taxes 9,297,889 9,083,039 10,550,547 7,517,628 8,822,903

Fund balances Nonspendable: Prepaid items - 963,322 562,376 1,381,507 1,144,114 Restricted for: Title IV D program 724,447 823,268 1,232,444 1,870,555 426,047 Assigned to: County geriatric center - 11,400,000 11,400,000 11,400,000 12,000,000 Employee healthcare costs - 11,400,000 11,400,000 11,400,000 12,000,000 Unassigned 7,433,686 9,720,416 10,572,860 9,532,158 16,236,691 Total fund balances 8,158,133 34,307,006 35,167,680 35,584,220 41,806,852

Total liabilities, deferred inflows of resources, and fund balances $ 90,258,510 $ 94,163,776 $ 88,127,113 $ 88,546,551 $ 104,777,500

Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

CAPITAL PROJECTS FUND The Capital Projects Fund receives the net proceeds of the County’s bond and note issues and other unrestricted funds that County Council has dedicated to fund the County’s capital improvement program. Summaries of the Statements of Revenues, Expenditures, and Changes in Fund Balance and the Balance Sheets of the Capital Projects Fund for the years from 2010 to 2014 are set forth below. For a more complete discussion of the County’s financial statements for the year ended December 31, 2014, see “APPENDIX II – COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014” attached hereto for additional information.

18 Capital Projects Fund Statements of Revenues, Expenditures, and Changes in Fund Balance Year Ended December 31 2010 2011 2012 2013 2014 Revenues General grants $ 635,859 $ 976,757 $ 5,412,811 $ 2,723,820 $ 81,308 Investment earnings 356,344 189,206 105,089 153,896 272,821 Total revenues 992,203 1,165,963 5,517,900 2,877,716 354,129

Expenditures Current: Other 183,266 204,996 225,388 101,894 - Debt service: Interest 361,332 377,994 397,109 498,111 798,961 Debt issuance costs - - - - 210,529 Capital outlay 19,320,464 15,302,712 15,026,734 10,460,337 10,801,510 Total expenditures 19,865,062 15,885,702 15,649,231 11,060,342 11,811,000

Revenues Over (Under) Expenditures (18,872,859) (14,719,739) (10,131,331) (8,182,626) (11,456,871)

Other Financing Sources (Uses) Issuance of bonds and notes 45,180,000 - 20,000,000 25,000,000 38,726,057 Optional redemption of bonds and notes (2) (29,995,000) - - - (38,515,528) Transfers in - 2,199,005 - - - Transfers out - - - (382,404) - Total other financing sources (uses) 15,185,000 2,199,005 20,000,000 24,617,596 210,529

Net Change in Fund Balances (3,687,859) (12,520,734) 9,868,669 16,434,970 (11,246,342) Beginning Fund Balance 38,127,762 11,636,903 (1) (883,831) 8,984,838 25,419,808

Ending Fund Balance $ 34,439,903 $ (883,831) $ 8,984,838 $ 25,419,808 $ 14,173,466

(1) Beginning balance was restated and reduced to recognize unassigned fund balances to the General Fund. (2) Stated as an "expenditure" in the Comprehensive Annual Financial Reports. Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

19 Capital Projects Fund Balance Sheets Year Ended December 31 2010 2011 2012 2013 2014 Assets Cash and cash equivalents $ 3,679,038 $ 3,632,826 $ 3,290,509 $ 1,479,468 $ 1,371,704 Receivables: Other - - 3,827,414 1,405,867 - Due from component units 5,475,000 5,475,000 5,475,000 5,475,000 5,475,000 Due from other funds 17,094,661 121,763 121,763 - - Other restricted assets 17,450,976 8,084,161 17,249,508 33,455,056 21,974,725 Other assets 2,528,345 - - - - Total assets $ 46,228,020 $ 17,313,750 $ 29,964,194 $ 41,815,391 $ 28,821,429

Liabilities, Deferred Inflows of Resources, and Fund Balances Liabilities Vouchers and accounts payable $ 2,410,275 $ 1,621,571 $ 1,320,387 $ 937,796 $ 690,638 Due to other funds 9,377,842 16,576,010 19,658,969 15,457,787 13,957,325 Total liabilities 11,788,117 18,197,581 20,979,356 16,395,583 14,647,963

Deferred inflows of resources Unavaliable revenues - taxes - - - - -

Fund balances Nonspendable: Long term receivable 5,475,000 5,475,000 5,475,000 5,475,000 5,475,000 Restricted for: Capital projects - - 2,293,963 19,435,592 8,274,442 Assigned to: Capital projects 28,964,903 1,576,451 1,215,875 509,216 424,024 Unassigned - (7,935,282) - - - Total fund balances 34,439,903 (883,831) 8,984,838 25,419,808 14,173,466

Total liabilities, deferred inflows of resources, and fund balances $ 46,228,020 $ 17,313,750 $ 29,964,194 $ 41,815,391 $ 28,821,429

Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

HEALTH AND HUMAN SERVICE FUNDS The health and human service programs are funded by a combination of Federal grants, Commonwealth grants, and County contributions from the General Fund. The Health and Human Service Funds include:

1) Funds for special grants received from the Commonwealth or Federal governments;

2) Funds for the County’s mental health, intellectual disabilities, and drug abuse programs that are funded by Commonwealth and Federal grants and by appropriations from the County’s General Fund; and

3) Funds for the County’s day care and child care programs that are funded by Commonwealth and Federal grants and by appropriations from the County’s General Fund.

Summaries of the Statements of Revenues, Expenditures, and Changes in Fund Balance of the Health and Human Service Funds for the years from 2010 to 2014 are set forth below. For a more complete discussion of the County’s financial statements, see “APPENDIX II – COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014” attached hereto for additional information.

20 Health and Human Services Funds Statements of Revenues, Expenditures, and Changes in Fund Balance Year Ended December 31 2010 2011 2012 2013 2014 Revenues Health and human service grants $ 235,212,559 $ 239,323,976 $ 238,445,980 $ 234,003,423 $ 244,913,281 Other 493,671 40,453 3,066 2,233 - Total revenues 235,706,230 239,364,429 238,449,046 234,005,656 244,913,281

Expenditures Current: Health and human services 242,129,230 245,787,429 244,872,046 240,428,656 251,336,280 Total expenditures 242,129,230 245,787,429 244,872,046 240,428,656 251,336,280

Revenues Over (Under) Expenditures (6,423,000) (6,423,000) (6,423,000) (6,423,000) (6,422,999)

Other Financing Sources (Uses) Transfers in 6,423,000 6,423,000 6,423,000 6,423,000 13,011,484 Transfers out - - - - (6,588,485) Total other financing sources (uses) 6,423,000 6,423,000 6,423,000 6,423,000 6,422,999

Net Change in Fund Balances - - - - - Beginning Fund Balance - - - - -

Ending Fund Balance $ - $ - $ - $ - $ -

Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

Health and Human Services Funds Balance Sheets Year Ended December 31 2010 2011 2012 2013 2014 Assets Cash and cash equivalents $ 5,351,409 $ 1,616,269 $ 6,457,065 $ 8,366,857 $ 12,762,946 Receivables: Grants 14,909,342 18,297,622 20,095,890 20,747,007 24,039,363 Due from other funds 19,212,504 27,484,184 13,141,250 11,904,540 18,492,767 Due from subcontractors 135,035 - - - - Other restricted assets - 4,422,744 7,108,158 8,391,617 5,197,494 Other assets 1,657,755 480,345 403,945 4,292,193 1,944,666 Total assets $ 41,266,045 $ 52,301,164 $ 47,206,308 $ 53,702,214 $ 62,437,236

Liabilities, Deferred Inflows of Resources, and Fund Balances Liabilities Vouchers and accounts payable $ 14,391,032 $ 14,712,504 $ 13,555,666 $ 13,230,677 $ 15,840,002 Due to other funds 4,968,084 9,057,604 10,312,576 11,009,122 11,726,217 Unearned revenues - - - 23,963,017 26,105,596 Other liabilities 2,219,516 4,654,776 4,111,962 5,499,398 8,765,421 Total liabilities 21,578,632 28,424,884 27,980,204 53,702,214 62,437,236

Deferred inflows of resources Unavaliable revenues - taxes 19,687,413 23,876,280 19,226,104 - -

Fund balances Total fund balances - - - - -

Total liabilities, deferred inflows of resources, and fund balances $ 41,266,045 $ 52,301,164 $ 47,206,308 $ 53,702,214 $ 62,437,236

Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

OTHER GOVERNMENTAL FUNDS The Other Governmental Funds account for emergency communications center, library, employment and job training, road construction grant, County Senior Citizen Department, and economic development programs that are funded by a combination of Federal grants, Commonwealth grants, and County contributions from the General Fund. Summaries of the Statements of Revenues, Expenditures, and Changes in Fund Balance of the Other Governmental Funds for the years from 2010 to 2014 are set forth below. For a more complete discussion of the County’s financial statements for 2014, see “APPENDIX II – COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014” attached hereto for additional information.

Other Governmental Funds Statements of Revenues, Expenditures, and Changes in Fund Balance Year Ended December 31 2010 2011 2012 2013 2014 Revenues General grants $ 54,351,958 $ 52,581,709 $ 50,277,603 $ 41,944,350 $ 45,211,189 Investment earnings 148,807 417,954 - - - Total revenues 54,500,765 52,999,663 50,277,603 41,944,350 45,211,189

Expenditures Current: Highways, streets and bridges 986,357 1,248,678 1,385,854 1,187,336 1,555,907 Other 58,125,433 56,069,471 56,358,267 47,321,758 49,916,007 Total expenditures 59,111,790 57,318,149 57,744,121 48,509,094 51,471,914

Revenues Over (Under) Expenditures (4,611,025) (4,318,486) (7,466,518) (6,564,744) (6,260,725)

Other Financing Sources (Uses) Transfers in 5,328,849 6,255,145 6,665,768 7,798,587 7,103,496 Transfers out - (2,649,005) (450,000) (1,540,000) (1,060,000) Total other financing sources (uses) 5,328,849 3,606,140 6,215,768 6,258,587 6,043,496

Net Change in Fund Balances 717,824 (712,346) (1,250,750) (306,157) (217,229) Beginning Fund Balance 7,808,783 8,526,607 7,814,261 6,563,511 6,257,354

Ending Fund Balance $ 8,526,607 $ 7,814,261 $ 6,563,511 $ 6,257,354 $ 6,040,125

Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

22 Other Governmental Funds Balance Sheets Year Ended December 31 2010 2011 2012 2013 2014 Assets Cash and cash equivalents $ 23,302,838 $ 11,698,409 $ 11,284,237 $ 14,607,103 $ 5,625,020 Receivables: Grants 4,716,040 - 2,247,778 1,798,749 3,309,445 Notes 4,652,470 2,713,629 4,652,471 4,723,524 5,639,008 Other - 4,652,470 - - - Due from other funds 10,752,116 7,721,769 8,442,560 8,901,375 8,441,163 Due from subcontractors 330,203 331,440 347,192 222,377 - Other restricted assets - - - - 3,794,867 Other assets 79,554 368,640 128,052 102,907 67,646 Total assets $ 43,833,221 $ 27,486,357 $ 27,102,290 $ 30,356,035 $ 26,877,149

Liabilities, Deferred Inflows of Resources, and Fund Balances Liabilities Vouchers and accounts payable $ 4,328,155 $ 4,441,823 $ 4,521,468 $ 3,321,441 $ 5,382,534 Due to other funds 20,832,842 8,338,980 8,054,326 12,327,168 3,185,783 Unearned revenues - - - 7,347,369 11,365,960 Other liabilities 444,520 730,502 974,410 1,102,703 902,747 Total liabilities 25,605,517 13,511,305 13,550,204 24,098,681 20,837,024

Deferred inflows of resources Unavaliable revenues - taxes 9,701,097 6,160,791 6,988,575 - -

Fund balances Restricted for: Highways and streets 2,117,979 2,045,289 1,856,882 1,777,099 1,430,456 Infrastructure - - - - 38,358 Library 3,002,528 2,181,260 1,859,136 682,598 609,672 Community development 3,406,100 3,587,712 2,847,493 3,797,657 3,961,639 Total fund balances 8,526,607 7,814,261 6,563,511 6,257,354 6,040,125

Total liabilities, deferred inflows of resources, and fund balances $ 43,833,221 $ 27,486,357 $ 27,102,290 $ 30,356,035 $ 26,877,149

Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

FAIR ACRES GERIATRIC CENTER The Fair Acres Geriatric Center is located in the Township of Middletown, Delaware County, Pennsylvania, on a 210 acre tract of land and is the County owned and operated nursing home for qualified residents of the County. The 874 bed facility provides skilled and intermediate care. Medical and nursing services are provided by attending physicians and a nursing staff trained in long term care. A full range of therapeutic services is available, including physical, occupational, speech, and recreational therapies. Fair Acres provides pharmacy, social services, and clinical food services. Fair Acres employs 1,229 people and is licensed by the Pennsylvania Department of Health to provide nursing home care and is certified by the U.S. Department of Health and Human Services in the Medicaid and Medicare Programs.

Revenues of Fair Acres are recognized on an accrual basis as determined by patient populations, net of contractual allowances (the difference between per diem rates charged and the rates at which third parties reimburse). The County records investments in land and buildings at Fair Acres at the cost incurred. The County funds any operating deficits of Fair Acres.

23 Summaries of the Statements of Revenues, Expenses, and Changes in Net Position and the Statements of Net Position of the Fair Acres Geriatric Center for the years from 2010 to 2014 are set forth below. For a more complete discussion of the County’s financial statements for 2014, see the discussion and schedules under “Proprietary Funds” in “APPENDIX II – COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014” attached hereto for additional information.

Fair Acres Geriatric Center Statements of Revenues, Expenses, and Changes in Net Position Year ended December 31 2010 2011 2012 2013 2014 Operating Revenues Charges for services $ 72,111,626 $ 73,517,671 $ 74,681,667 $ 75,172,541 $ 75,783,231

Operating Expenses Administration 10,755,620 10,931,544 11,876,889 12,487,777 13,097,283 Operation, maintenance, and housekeeping 10,865,295 11,079,918 10,746,778 10,681,461 10,648,126 Nursing 22,286,594 22,970,344 23,464,477 22,549,020 22,254,886 Dietary 6,995,773 7,229,466 7,578,543 7,416,679 7,277,348 Medical and physical therapy 4,806,029 4,732,748 4,783,881 4,539,422 4,642,276 Employee benfits 18,298,007 19,771,485 19,159,664 19,360,193 16,311,830 Depreciation 3,027,505 2,983,590 2,540,336 2,028,095 1,967,365 Total operating expenses 77,034,823 79,699,095 80,150,568 79,062,647 76,199,114

Operating Loss (4,923,197) (6,181,424) (5,468,901) (3,890,106) (415,883)

Nonoperating Revenues (Expenses) Investment earnings 247,770 277,422 883,636 1,107,882 431 Miscellaneous (expenses) revenues (14,759) 91,281 - - (27,123) Interest expense (1,667,174) (1,677,013) (1,713,184) (1,700,479) (1,629,759) Total nonoperating (expenses) revenues (1,434,163) (1,308,310) (829,548) (592,597) (1,656,451)

Capital Contribution - 175,245 379,719 - - Transfers in 5,504,273 7,314,489 5,918,730 4,482,703 2,072,334 Change in Net Position (853,087) - - - - Net Position, Beginning 853,087 - - - -

Net Position, Ending $ - $ - $ - $ - $ -

Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

24 Fair Acres Geriatric Center Statements of Net Position Year ended December 31 2010 2011 2012 2013 2014 Assets Current assets: Cash and cash equivalents $ 2,017,115 $ 1,813,345 $ 4,454,866 $ 3,724,155 $ 3,634,607 Accounts receivable, net 20,584,432 20,331,930 19,675,325 18,552,842 15,968,614 Due from other funds 2,004,676 4,699,348 2,787,087 4,158,910 6,221,597 Other restricted assets 954,863 962,805 854,041 796,261 804,882 Prepaid expense and other assets 13,920 8,550 17,912 17,485 10,404 Total current assets 25,575,006 27,815,978 27,789,231 27,249,653 26,640,104

Noncurrent assets: Capital assets: Buildings and improvements 47,777,916 50,203,821 50,263,168 50,453,927 52,035,605 Equipment 36,018,839 36,453,382 37,108,897 37,542,025 37,261,885 Total capital assets 83,796,755 86,657,203 87,372,065 87,995,952 89,297,490

Less accumulated depreciation (68,581,434) (71,565,024) (74,105,360) (76,113,883) (78,100,819)

Total noncurrent assets 15,215,321 15,092,179 13,266,705 11,882,069 11,196,671

Total assets $ 40,790,327 $ 42,908,157 $ 41,055,936 $ 39,131,722 $ 37,836,775

Liabilities Current liabilities: Vouchers and accounts payable $ 6,154,317 $ 6,455,566 $ 6,080,762 $ 3,884,940 $ 3,970,174 Unearned revenue - 379,719 - 2,151,463 2,075,550 General obligation bonds and notes - current 1,223,846 1,569,883 2,285,623 2,377,247 2,231,227 Total current liabilities 7,378,163 8,405,168 8,366,385 8,413,650 8,276,951

Noncurrent liabilities: General obligation bonds and notes payable 33,412,164 34,502,989 32,689,551 30,718,072 29,559,824 Total noncurrent liabilities 33,412,164 34,502,989 32,689,551 30,718,072 29,559,824

Total liabilities 40,790,327 42,908,157 41,055,936 39,131,722 37,836,775

Net Position Net investment in capital assets (19,420,689) (20,980,693) (21,708,469) (21,213,250) (20,594,380) Unrestricted 19,420,689 20,980,693 21,708,469 21,213,250 20,594,380 Total net position - - - - -

Total liabilities and net position $ 40,790,327 $ 42,908,157 $ 41,055,936 $ 39,131,722 $ 37,836,775

Sources: Comprehensive Annual Financial Reports for the Years Ended December 31, 2010 to December 31, 2014.

DELAWARE COUNTY SOLID WASTE AUTHORITY The County formed the Delaware County Incineration Authority on April 23, 1954. That Authority was reconstituted as the Delaware County Solid Waste Authority (“DCSWA”) on December 27, 1984, to provide long term landfill disposal capacity for municipal waste generated in the County. DCSWA is empowered to acquire, maintain, operate, and own municipal waste disposal facilities. DCSWA owns and operates the Rolling Hills Landfill in Berks County and is responsible for the operation of solid waste transfer stations in the County. DCSWA provides disposal capacity for commercial and residential waste generated in the County and also for solid waste generated in surrounding areas. County Council appoints the members of the Board of DCSWA. County Council approves any user charges assessed by DCSWA. Summaries of DCSWA’s operations are shown below.

25 Waste Disposed by DCSWA (tons) 2010 2011 2012 2013 2014 Type of waste Residential 233,406 230,358 217,700 213,190 211,840 Commercial 130,847 134,143 140,595 141,689 155,497 Total 364,253 364,501 358,295 354,879 367,337

Disposal Facility Covanta Waste to Energy Facility 319,553 320,773 313,466 309,681 322,316 Rolling Hills Landfill 1,194 654 564 423 1,467 Total 320,747 321,427 314,030 310,104 323,783

Transfer Station 325,462 326,852 319,174 314,567 328,601

Source: Delaware County Solid Waste Authority

Waste Disposed at the Rolling Hills Landfill (tons) 2010 2011 2012 2013 2014 Covanta Waste to Energy Facility Delaware County Ash 151,777 154,464 108,735 113,520 123,039 Ash from Out of County Waste 230,028 223,125 260,759 262,651 263,428 Diverted County bulk waste 1,194 654 564 423 1,467 Berks County 78,598 76,831 72,136 99,147 116,000 Chester County 7,830 8,029 7,479 7,050 5,033 Montgomery County 19,993 17,633 16,264 14,726 12,856 New Jersey - - 56,113 86,160 82,703 Total 489,420 480,736 465,937 497,517 521,823

Source: Delaware County Solid Waste Authority

Disposal Fees per Ton of Waste 2010 2011 2012 2013 2014 County bulk waste $ 61.25 $ 61.25 $ 63.25 $ 63.25 $ 63.25 County haulers commercial 64.00 64.00 66.00 66.00 66.00 County haulers residential 23.45 23.45 23.45 33.00 33.00 Berks County haulers 61.25 61.25 63.25 63.25 63.25 Chester County haulers 53.25 53.25 53.25 53.75 54.25 Montgomery County haulers 52.25 52.25 52.25 52.75 53.25 County ash from Covanta (1) - - - - - Montgomery County Waste to Energy 20.00 22.00 23.06 23.83 24.36 Essex County Waste to Energy 16.00 16.00 15.50 15.50 Evergreen Community Power 25.00 25.00 25.00 26.25 26.25 Waste Management, Berks County 50.25 50.25 50.25 50.75 51.25 Kutztown 50.25 50.25 51.25 51.25 51.25 New Jersey construction debris 25.25 25.25 25.25

(1) County ash is disposed at no fee. Source: Delaware County Solid Waste Authority

26 Summaries of the Statements of Revenues, Expenses, and Changes in Net Position and the Statements of Net Position of the DCSWA for the years from 2010 to 2014 are set forth below. For a more complete discussion of the County’s financial statements for 2014, see the discussion and schedules under “Component Units” in “APPENDIX II – COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014” attached hereto for additional information.

Delaware County Solid Waste Authority Statements of Revenues, Expenses, and Changes in Net Position Year ended December 31 2010 2011 2012 2013 2014 Operating Revenues Hauler fees $ 18,823,279 $ 18,421,279 $ 19,648,747 $ 21,732,729 $ 22,790,827 Covanta 4,805,131 5,232,888 5,727,149 5,830,670 6,125,521 Municipal waste disposal fee 4,738,093 4,776,940 4,448,528 6,074,810 5,906,215 Recycling and other grant revenue 263,911 176,689 126,486 165,076 115,045 Other revenues 121,868 55,248 82,438 60,826 55,993 Total operating revenues 28,752,282 28,663,044 30,033,348 33,864,111 34,993,601

Operating Expenses Salaries, wages and employee benefits 2,230,686 2,195,751 2,267,442 2,342,440 2,483,390 Contractual services, maintenance, supplies 3,150,087 3,500,575 3,351,761 3,493,549 4,307,577 Contract hauling fees 8,663,294 8,991,915 8,373,007 8,376,337 9,266,719 Host fees and fines 4,017,906 4,004,825 4,152,187 4,948,591 5,145,368 Covanta 8,435,279 8,549,060 10,744,322 10,988,396 11,645,012 Composting 140,092 105,427 106,050 78,896 67,350 Depreciation and depletion 3,678,501 3,808,086 3,967,772 4,129,894 4,054,407 Post-closure costs 2,211,750 315,779 903,703 63,803 1,158,212 Total operating expenses 32,527,595 31,471,418 33,866,244 34,421,906 38,128,035

Operating gain (loss) (3,775,313) (2,808,374) (3,832,896) (557,795) (3,134,434)

Non-operating revenues (expenses) Income on investments 36,369 15,712 28,805 12,318 22,999 Gain (loss) on sale of assets 13,375 (37,004) - - - Debt service payment (211,955) (232,832) (350,221) (349,266) (339,457) Bad debt expenses - - (23,884) (7,590) (19,416) Unrealized gain (loss) on investment - - - (500,000) (63,548) Total non-operating revenues (expenses) (162,211) (254,124) (345,300) (844,538) (399,422)

Change in Net Position (3,937,524) (3,062,498) (4,178,196) (1,402,333) (3,533,856) Beginning Net Position 48,206,960 44,269,436 41,206,938 37,028,742 35,626,409

Ending Net Position $ 44,269,436 $ 41,206,938 $ 37,028,742 $ 35,626,409 $ 32,092,553 Sources: Financial Statements of the Delaware County Solid Waste Authority for the Years Ended December 31, 2010 to December 31, 2014.

27 Delaware County Solid Waste Authority Statements of Net Position Year ended December 31 2010 2011 2012 2013 2014 Assets Current assets: Cash and cash equivalents $ 4,481,398 $ 3,226,543 $ 6,798,612 $ 6,671,925 $ 10,307,915 Accounts receivable - haulers - net allowance 4,106,151 3,490,281 3,623,415 4,032,114 4,501,613 Accounts receivable - others 113,243 117,911 92,329 82,487 44,525 Accrued interest receivable 3,597 2,351 4,187 3,329 - Inventory 94,608 115,531 112,484 128,162 128,178 Prepaid expenses 1,420,436 1,356,545 1,318,885 1,212,926 1,436,833 Total current assets 10,219,433 8,309,162 11,949,912 12,130,943 16,419,064

Non-current assets: Restricted cash and investments Collateral deposit - surety bond 17,119,857 17,117,895 17,139,487 17,145,964 5,000,000 Investments - - - 500,000 8,028,805 Capital assets: Land, private road 7,000,000 7,000,000 7,000,000 7,000,000 7,000,000 Landfill site, net of depletion 4,764,120 4,466,815 4,194,023 3,792,038 3,549,330 Buildings, improvements, and equipment, net 34,657,750 37,331,771 34,453,636 32,170,195 29,000,309 Contruction in progress 4,639,679 - - 1,008,163 1,639,255 Total non-current assets 68,181,406 65,916,481 62,787,146 61,616,360 54,217,699

Total assets 78,400,839 74,225,643 74,737,058 73,747,303 70,636,763

Liabilities Current liabilities: Accounts payable 4,158,899 3,400,812 3,840,161 4,553,027 4,814,212 Accrued expenses and payroll taxes 83,832 55,699 66,258 632,167 579,087 Note payable, current maturities 400,000 400,000 500,000 500,000 500,000 Revenue notes payable, current maturities 173,000 264,000 430,000 443,000 457,000 Total liabilities 4,815,731 4,120,511 4,836,419 6,128,194 6,350,299

Non-current liabilities: Accrued closure costs 11,829,415 12,145,194 13,048,897 13,112,700 14,270,911 Note payable, longterm maturities 3,000,000 2,600,000 2,100,000 1,600,000 1,100,000 Revenue notes payable, long-term maturites 6,942,000 6,678,000 10,248,000 9,805,000 9,348,000 Due to County of Delaware 7,544,257 7,475,000 7,475,000 7,475,000 7,475,000 Total non-current liabilities 29,315,672 28,898,194 32,871,897 31,992,700 32,193,911

Total liabilities 34,131,403 33,018,705 37,708,316 38,120,894 38,544,210

Net Position Net investment in capital assets 40,546,549 38,856,586 32,369,659 31,622,396 29,783,894 Restricted 5,290,442 4,972,701 4,090,590 4,533,264 5,000,000 Unrestricted (1,567,555) (2,622,349) 568,493 (529,251) (2,691,341) Total net position $ 44,269,436 $ 41,206,938 $ 37,028,742 $ 35,626,409 $ 32,092,553 Sources: Financial Statements of the Delaware County Solid Waste Authority for the Years Ended December 31, 2010 to December 31, 2014. DEBT OBLIGATIONS AND DEBT CAPACITY

The par amount of the general obligation debt outstanding, “nonelectoral debt” under the Act, after the issuance of the Bonds will be approximately $321 million. The County also has financial guaranties, “lease rental” debt under the Act, of debt issued by the DCSWA in the aggregate par amount outstanding of $9.3 million. The Pennsylvania Department of Community and Economic Development has approved the DCSWA debt as self- liquidating debt, and the County does not expect to be required to make any payments under the guaranty agreements. A schedule of the County’s general obligation and the DCSWA’s guaranteed debt service payments is set forth in “Estimated General Obligation Debt Service and Financial Guaranties of Authority Debt after Issuance of the Bonds” in “THE COUNTY – COUNTY DEBT CAPACITY - Debt Service”.

28 COUNTY BORROWING BASE AND BORROWING CAPACITY In accordance with the Charter, the County’s borrowing capacity is governed by the Act. Under the Act, the County has no legal limitations on debt of any classification approved by a majority of its electors at a general or special election. The Act places the following limitations upon that part of the County’s nonelectoral and lease rental debt which is not subsidized or self-liquidating.

(1) Nonelectoral debt may not exceed 300% of the borrowing base; (2) Aggregate lease rental debt and nonelectoral debt may not exceed 400% of the borrowing base; and (3) Additional debt incurred under §8022(d) of the Act (which applies if the County has assumed county-wide responsibility for hospitals and other public health services, air and water pollution control, environmental protection, water distribution and supply systems, sewage and refuse collection and disposal systems, education, highways, public transportation or port operations and such additional debt is utilized to provide funds for and toward the costs of capital facilities for any combination of the foregoing purposes) may not exceed an additional 100% of the borrowing base.

The County’s borrowing base and borrowing capacity are calculated as set forth below.

County of Delaware Borrowing Base and Debt Capacity Calculation

Fiscal Year Ended December 31 2013 2014 2015*

Total revenues received $ 503,798,451 $ 523,840,693 $ 517,848,205 Less: Reimbursements for debt financed projects Revenue pledged for self-liquidating debt Sinking fund interest Grants and gifts in aid Non-recurring receipts - - - Net adjusted revenues $ 503,798,451 $ 523,840,693 $ 517,848,205

Total adjusted revenues for 3 years $ 1,545,487,349

Borrowing Base (1) $ 515,162,450

Gross borrowing capacity Nonelectoral debt limit (2) $ 1,545,487,350 Aggregate nonelectoral and lease rental debt limit (3) $ 2,060,649,800

*Estimate. (1) The three year average of Net Adjusted Revenues. (2) Equal to 300% of Borrowing Base. (3) Equal to 400% of Borrowing Base.

The amount of nonelectoral and lease rental debt outstanding and the available debt capacity after the issuance of the Bonds are set forth below.

29 Nonelectoral and Lease Rental Debt Borrowing Capacity after the Issuance of the General Obligation Bonds, Series of 2016 Nonelectoral debt borrowing capacity $ 1,545,487,350

Nonelectoral debt outstanding General Obligation Note, 1997 Series $ 23,059,000 (1) General Obligation Note, 2002 Series 12,220,000 (1) General Obligation Bonds, 2005 Series - General Obligation Note, 2005 Series 1,795,000 (1) General Obligation Note, 2007 A Series 16,725,000 (1) General Obligation Note, 2007 B Series 2,199,000 (1) General Obligation Note, 2008 A Series 2,249,000 (1) General Obligation Bonds, 2009 Series 25,110,000 General Obligation Bonds, 2009 A Series 27,625,000 General Obligation Bonds, 2010 Series 45,160,000 (1) General Obligation Notes, 2012 Series 19,997,000 (1) General Obligation Notes, 2013 Series 24,998,000 (1) General Obligation Bonds, 2014 Series 45,164,000 (1) General Obligation Notes, 2015 Series 25,000,000 (1) General Obligation Bonds, 2016 Series 49,420,000

Net nonelectoral debt outstanding 320,721,000

Available nonelectoral debt borrowing capacity $ 1,224,766,350

Aggregate nonelectoral and lease rental debt borrowing capacity $ 2,060,649,800

Net nonelectoral debt outstanding 320,721,000 Lease rental debt outstanding Guaranteed Revenue Notes, 2009 Series 5,831,000 (1)(2) Guaranteed Revenue Notes, 2012 Series 3,517,000 (1)(2) Less self-liquidating lease rental debt Guaranteed Revenue Notes, 2009 Series (5,831,000) (1)(2) Guaranteed Revenue Notes, 2012 Series (3,517,000) (1)(2) Net aggregate nonelectoral and lease rental debt outstanding 320,721,000

Available aggregate nonelectoral and lease rental debt borrowing capapcity $ 1,739,928,800

(1) Obligations issued to the Delaware Valley Regional Finance Authority. (2) Issued by the Delaware County Solid Waste Authority and secured by a guaranty of the County.

The County and DCSWA have utilized the Delaware Valley Regional Finance Authority (“DelVal”) for many of their financings to reduce costs of issuance and interest costs and to facilitate the management of their debt. DelVal utilizes interest rate swap transactions to hedge its exposure to interest rate risks and executes offsetting transactions to provide fixed rates on loans. DelVal sets the loan rates at levels sufficient to pay the allocable (i) debt service costs, (ii) net interest rate swap payments, and (iii) administrative costs. Under the loan agreements with DelVal, the County and DCSWA are obligated to pay any interest rate swap termination costs allocable to their loans incurred by DelVal. A schedule of the loans outstanding from DelVal and the termination costs allocable to the County and DCSWA is shown below. As of December 31, 2015, DelVal would receive approximately $160 million if all of its swap transactions were terminated. Additional information about DelVal may be found at http://www.DelVal.US.

30 Market Value of the Allocable Interest Rate Swap Transactions as of December 31, 2015

Loan Market Value on December 31, 2015 Principal Fixed Rate Allocable Net Borrower Description Outstanding Loan Swaps Bond Swaps Value

Delaware County 1997 Notes $ 23,059,000 $ - $ 4,210,344 $ 4,210,344 Delaware County 2002 Notes 12,220,000 (180,286) 2,231,251 2,050,965 Delaware County 2005 B Notes 1,795,000 (45,412) 327,749 282,337 Delaware County 2007 A Notes 16,725,000 (513,020) 3,053,819 2,540,799 Delaware County 2007 B Notes 2,199,000 (26,287) 401,516 375,229 Delaware County 2008 A Notes 2,249,000 (23,618) 410,645 387,027 Delaware County 2010 Bonds 45,160,000 (1,401,561) 8,245,768 6,844,207 Delaware County 2012 Notes 19,997,000 (478,572) 3,651,254 3,172,682 Delaware County 2013 A Note 24,998,000 (401,143) 4,564,387 4,163,244 Delaware County 2014 Bonds 45,164,000 (371,598) 8,246,497 7,874,899 Delaware County 2015 Notes 25,000,000 (59,229) 4,564,752 4,505,523 Subtotal nonelectoral debt 218,566,000 (3,500,726) 39,907,982 36,407,256

DCSWA 2009 Note 5,831,000 (527,771) 1,064,683 536,912 DCSWA 2012 Note 3,517,000 (133,292) 642,169 508,877 Subtotal lease rental debt 9,348,000 (661,063) 1,706,852 1,045,789

Total $ 227,914,000 $ (4,161,789) $ 41,614,834 $ 37,453,045

Source: Calhoun Baker Inc.

CAPITAL IMPROVEMENT PROGRAM AND FUTURE FINANCINGS The County’s five-year capital improvement program, summarized below, is reviewed and adopted annually with the Budget. The County issued the General Obligation Notes, 2015 Series in the aggregate par amount of $25,000,000 to provide funding for its capital program. The County expects to issue additional general obligation bonds or notes in the aggregate principal amount of $80,000,000 over the next five years to fund the capital program. The County expects to redeem the General Obligation Bonds, Series of 2009 on or before the optional redemption date of July 15, 2019. The County will also consider the optional redemptions of other outstanding debt obligations if the redemptions are economic.

Capital Improvement Program 2016 2017 2018 2019 2020 Total Sources of Funds Beginning balance $ 31,000,000 $ 10,217,000 $ 1,192,000 $ 3,717,000 $ 7,217,000 $ 31,000,000 Net proceeds of bond and note issues - 40,000,000 30,000,000 10,000,000 - 80,000,000 Total funds available 31,000,000 50,217,000 31,192,000 13,717,000 7,217,000 111,000,000

Uses of Funds SEPTA projects 912,000 925,000 950,000 950,000 975,000 4,712,000 Building improvements 7,488,000 27,900,000 20,125,000 2,500,000 2,300,000 60,313,000 Equipment 4,657,000 11,750,000 1,600,000 1,600,000 1,600,000 21,207,000 9-1-1 center 1,980,000 6,950,000 3,500,000 200,000 200,000 12,830,000 Juvenille Detention Center 1,295,000 250,000 100,000 100,000 100,000 1,845,000 Prison 1,880,000 500,000 500,000 500,000 500,000 3,880,000 Fair Acres Geriatric Center 2,571,000 750,000 700,000 650,000 529,000 5,200,000 Total uses of funds 20,783,000 49,025,000 27,475,000 6,500,000 6,204,000 109,987,000

- Ending balance $ 10,217,000 $ 1,192,000 $ 3,717,000 $ 7,217,000 $ 1,013,000 $ 1,013,000

Source: County of Delaware

31 DEBT SERVICE PAYMENTS Below is a chart that shows the estimated, nonelectoral debt service payments before and after the issuance of the Bonds. Approximately 1.9% of the County’s estimated interest payments are variable rate, but no credit facilities are involved.

Estimated General Obligation Debt Service Payments after the Issuance of the Bonds $35,000,000

$30,000,000

Current Debt Service $25,000,000 Debt Service a

$20,000,000

$15,000,000

$10,000,000

$5,000,000

$- 2016 2019 2022 2025 2028 2031 2034 2037

The estimated general obligation debt service payments of the County and the estimated debt service payments secured by guaranties of the County are set forth in the schedule below.

32 Estimated General Obligation Debt Service and Financial Guaranties of Authority Debt after Issuance of the Bonds

Period General Obligation Bonds, 2016 Series General Obligation Notes, 2015 Series General Obligation Bonds, 2014 Series General Obligation Notes, 2013 Series Ending Principal Interest Total Principal Interest Total Principal Interest Total Principal Interest Total Dec-16 $ 3,510,000 $ 1,504,848 $ 5,014,848 $ 1,000 $ 510,087 $ 511,087 $ 2,000 $ 865,375 $ 867,375 $ 1,000 $ 414,961 $ 415,961 Dec-17 7,365,000 2,295,500 9,660,500 1,000 514,353 515,353 2,000 876,169 878,169 1,000 414,945 415,945 Dec-18 7,635,000 1,927,250 9,562,250 1,000 514,332 515,332 2,000 886,948 888,948 1,000 459,919 460,919 Dec-19 7,870,000 1,545,500 9,415,500 1,000 514,312 515,312 2,000 897,711 899,711 1,000 583,208 584,208 Dec-20 12,495,000 1,152,000 13,647,000 1,000 514,291 515,291 2,000 908,457 910,457 1,000 683,159 684,159 Dec-21 10,545,000 527,250 11,072,250 1,000 514,270 515,270 2,000 915,595 917,595 1,000 749,780 750,780 Dec-22 1,000 514,250 515,250 490,000 910,655 1,400,655 1,000 749,750 750,750 Dec-23 1,000 514,229 515,229 14,533,000 798,015 15,331,015 1,951,000 730,220 2,681,220 Dec-24 1,000 514,209 515,209 14,885,000 494,790 15,379,790 2,010,000 671,100 2,681,100 Dec-25 1,000 514,188 515,188 15,244,000 199,798 15,443,798 2,070,000 610,200 2,680,200 Dec-26 2,180,000 528,347 2,708,347 2,132,000 547,480 2,679,480 Dec-27 2,245,000 678,688 2,923,688 2,196,000 482,880 2,678,880 Dec-28 2,313,000 611,168 2,924,168 2,262,000 416,340 2,678,340 Dec-29 2,382,000 541,605 2,923,605 2,330,000 347,800 2,677,800 Dec-30 2,453,000 469,968 2,922,968 2,400,000 277,200 2,677,200 Dec-31 2,527,000 396,193 2,923,193 2,472,000 204,480 2,676,480 Dec-32 2,603,000 320,193 2,923,193 2,546,000 129,580 2,675,580 Dec-33 2,681,000 241,908 2,922,908 2,622,000 52,440 2,674,440 Dec-34 2,761,000 161,278 2,922,278 Dec-35 2,845,000 78,238 2,923,238 Dec-36 Dec-37 Dec-38 Dec-39 ------Total $ 49,420,000 $ 8,952,348 $ 58,372,348 $ 25,000,000 $ 9,166,102 $ 34,166,102 $ 45,164,000 $ 7,753,512 $ 52,917,512 $ 24,998,000 $ 8,525,442 $ 33,523,442

Source: Calhoun Baker Inc.

33 Estimated General Obligation Debt Service and Financial Guaranties of Authority Debt after Issuance of the Bonds

Period General Obligation Notes, 2012 Series General Obligation Bonds, 2010 Series General Obligation Bonds, 2009 A Series General Obligation Bonds, 2009 Series Ending Principal Interest Total Principal Interest Total Principal Interest Total Principal Interest Total Dec-16 $ 1,000 $ 383,928 $ 384,928 $ 5,000 $ 1,036,393 $ 1,041,393 $ 6,430,000 $ 1,316,950 $ 7,746,950 $ 645,000 $ 1,133,081 $ 1,778,081 Dec-17 1,000 383,909 384,909 5,000 993,385 998,385 6,735,000 1,009,250 7,744,250 660,000 1,113,731 1,773,731 Dec-18 1,000 383,890 384,890 5,000 1,083,563 1,088,563 7,065,000 683,000 7,748,000 680,000 1,093,931 1,773,931 Dec-19 1,000 383,870 384,870 5,000 1,151,143 1,156,143 7,395,000 349,750 7,744,750 700,000 1,073,531 1,773,531 Dec-20 1,000 545,786 546,786 4,445,000 1,197,245 5,642,245 725,000 1,052,531 1,777,531 Dec-21 1,000 599,738 600,738 4,575,000 1,152,225 5,727,225 750,000 1,023,531 1,773,531 Dec-22 1,000 599,708 600,708 4,715,000 1,012,875 5,727,875 780,000 993,531 1,773,531 Dec-23 1,784,000 559,560 2,343,560 4,855,000 869,325 5,724,325 815,000 962,331 1,777,331 Dec-24 1,829,000 505,028 2,334,028 5,000,000 721,500 5,721,500 845,000 929,731 1,774,731 Dec-25 1,875,000 449,123 2,324,123 5,150,000 569,250 5,719,250 880,000 895,931 1,775,931 Dec-26 1,921,000 391,838 2,312,838 5,305,000 412,425 5,717,425 920,000 856,331 1,776,331 Dec-27 1,970,000 333,105 2,303,105 5,465,000 250,875 5,715,875 960,000 814,931 1,774,931 Dec-28 2,019,000 272,903 2,291,903 5,630,000 84,450 5,714,450 1,005,000 771,731 1,776,731 Dec-29 2,069,000 211,208 2,280,208 1,050,000 726,506 1,776,506 Dec-30 2,121,000 147,968 2,268,968 1,095,000 679,256 1,774,256 Dec-31 2,174,000 83,145 2,257,145 1,150,000 627,244 1,777,244 Dec-32 2,228,000 16,710 2,244,710 1,205,000 572,619 1,777,619 Dec-33 1,260,000 515,381 1,775,381 Dec-34 1,320,000 455,531 1,775,531 Dec-35 1,385,000 392,831 1,777,831 Dec-36 1,455,000 321,850 1,776,850 Dec-37 1,530,000 247,281 1,777,281 Dec-38 1,605,000 168,869 1,773,869 Dec-39 ------1,690,000 86,613 1,776,613 Total $ 19,997,000 $ 6,251,413 $ 26,248,413 $ 45,160,000 $ 10,534,654 $ 55,694,654 $ 27,625,000 $ 3,358,950 $ 30,983,950 $ 25,110,000 $ 17,508,838 $ 42,618,838

Source: Calhoun Baker Inc.

34 Estimated General Obligation Debt Service and Financial Guaranties of Authority Debt after Issuance of the Bonds

Period General Obligation Note, 2008 A Series General Obligation Note, 2007 B Series General Obligation Note, 2007 A Series General Obligation Note, 2005 B Series Ending Principal Interest Total Principal Interest Total Principal Interest Total Principal Interest Total Dec-16 $ 1,106,000 $ 30,189 $ 1,136,189 $ 2,199,000 $ 38,098 $ 2,237,098 $ 2,340,000 $ 338,958 $ 2,678,958 $ 466,000 $ 38,284 $ 504,284 Dec-17 1,143,000 10,173 1,153,173 35,000 311,479 346,479 484,000 28,093 512,093 Dec-18 40,000 310,675 350,675 502,000 17,509 519,509 Dec-19 40,000 309,808 349,808 343,000 6,854 349,854 Dec-20 40,000 358,301 398,301 Dec-21 1,625,000 406,588 2,031,588 Dec-22 6,925,000 291,588 7,216,588 Dec-23 1,051,000 157,263 1,208,263 Dec-24 1,092,000 125,220 1,217,220 Dec-25 1,134,000 91,935 1,225,935 Dec-26 1,179,000 57,353 1,236,353 Dec-27 1,224,000 21,420 1,245,420 Dec-28 Dec-29 Dec-30 Dec-31 Dec-32 Dec-33 Dec-34 Dec-35 Dec-36 Dec-37 Dec-38 Dec-39 ------Total $ 2,249,000 $ 40,362 $ 2,289,362 $ 2,199,000 $ 38,098 $ 2,237,098 $ 16,725,000 $ 2,780,587 $ 19,505,587 $ 1,795,000 $ 90,741 $ 1,885,741

Source: Calhoun Baker Inc.

35 Estimated General Obligation Debt Service and Financial Guaranties of Authority Debt after Issuance of the Bonds

Total Nonelectoral Period General Obligation Bonds, 2005 Series General Obligation Note, 2002 Series General Obligation Note, 1997 Series General Obligation Debt Ending Principal Interest Total Principal Interest Total Principal Interest Total Principal Interest Total Dec-16 $ - $ 1,014,886 $ 1,014,886 $ - $ 263,952 $ 263,952 $ 2,498,000 $ 311,179 $ 2,809,179 $ 19,204,000 $ 9,201,170 $ 28,405,170 Dec-17 - 219,960 219,960 3,518,000 282,736 3,800,736 19,950,000 8,453,682 28,403,682 Dec-18 - 268,840 268,840 4,611,000 232,390 4,843,390 20,543,000 7,862,247 28,405,247 Dec-19 - 317,720 317,720 4,746,000 167,909 4,913,909 21,104,000 7,301,316 28,405,316 Dec-20 3,085,000 366,600 3,451,600 724,000 106,378 830,378 21,519,000 6,884,750 28,403,750 Dec-21 4,435,000 274,050 4,709,050 210,000 96,876 306,876 22,145,000 6,259,902 28,404,902 Dec-22 4,700,000 141,000 4,841,000 6,752,000 86,341 6,838,341 24,365,000 5,299,697 29,664,697 Dec-23 24,990,000 4,590,943 29,580,943 Dec-24 25,662,000 3,961,577 29,623,577 Dec-25 26,354,000 3,330,425 29,684,425 Dec-26 13,637,000 2,793,773 16,430,773 Dec-27 14,060,000 2,581,899 16,641,899 Dec-28 13,229,000 2,156,591 15,385,591 Dec-29 7,831,000 1,827,119 9,658,119 Dec-30 8,069,000 1,574,391 9,643,391 Dec-31 8,323,000 1,311,061 9,634,061 Dec-32 8,582,000 1,039,101 9,621,101 Dec-33 6,563,000 809,729 7,372,729 Dec-34 4,081,000 616,809 4,697,809 Dec-35 4,230,000 471,069 4,701,069 Dec-36 1,455,000 321,850 1,776,850 Dec-37 1,530,000 247,281 1,777,281 Dec-38 1,605,000 168,869 1,773,869 Dec-39 ------1,690,000 86,613 1,776,613 Total $ - $ 1,014,886 $ 1,014,886 $ 12,220,000 $ 1,852,122 $ 14,072,122 $ 23,059,000 $ 1,283,809 $ 24,342,809 $ 320,721,000 $ 79,151,864 $ 399,872,864

Source: Calhoun Baker Inc.

36 Estimated General Obligation Debt Service and Financial Guaranties of Authority Debt after Issuance of the Bonds

Delaware County Solid Waste Authority Delaware County Solid Waste Authority Total Financial Guaranties Total Nonelectoral and Period Guaranteed Revenue Notes, 2012 Series Guaranteed Revenue Notes, 2009 Series and Lease Rental Debt Lease Rental Debt Ending Principal Interest Total Principal Interest Total Principal Interest Total Principal Interest Total Dec-16 $ 169,000 $ 85,298 $ 254,298 $ 302,000 $ 186,825 $ 488,825 $ 471,000 $ 272,123 $ 743,123 $ 19,675,000 $ 9,473,292 $ 29,148,292 Dec-17 173,000 81,048 254,048 313,000 176,484 489,484 486,000 257,532 743,532 20,436,000 8,711,214 29,147,214 Dec-18 177,000 76,700 253,700 324,000 165,775 489,775 501,000 242,475 743,475 21,044,000 8,104,722 29,148,722 Dec-19 182,000 72,239 254,239 336,000 154,676 490,676 518,000 226,915 744,915 21,622,000 7,528,231 29,150,231 Dec-20 186,000 67,667 253,667 348,000 140,754 488,754 534,000 208,421 742,421 22,053,000 7,093,171 29,146,171 Dec-21 191,000 62,982 253,982 360,000 128,254 488,254 551,000 191,237 742,237 22,696,000 6,451,139 29,147,139 Dec-22 196,000 58,174 254,174 372,000 116,238 488,238 568,000 174,412 742,412 24,933,000 5,474,109 30,407,109 Dec-23 200,000 53,254 253,254 385,000 103,805 488,805 585,000 157,058 742,058 25,575,000 4,748,002 30,323,002 Dec-24 205,000 48,221 253,221 398,000 90,950 488,950 603,000 139,172 742,172 26,265,000 4,100,749 30,365,749 Dec-25 211,000 43,053 254,053 412,000 75,017 487,017 623,000 118,070 741,070 26,977,000 3,448,495 30,425,495 Dec-26 216,000 37,747 253,747 426,000 60,782 486,782 642,000 98,529 740,529 14,279,000 2,892,302 17,171,302 Dec-27 221,000 32,317 253,317 441,000 47,092 488,092 662,000 79,409 741,409 14,722,000 2,661,308 17,383,308 Dec-28 227,000 26,751 253,751 457,000 32,907 489,907 684,000 59,658 743,658 13,913,000 2,216,249 16,129,249 Dec-29 232,000 21,048 253,048 473,000 18,222 491,222 705,000 39,270 744,270 8,536,000 1,866,389 10,402,389 Dec-30 238,000 15,208 253,208 321,000 7,298 328,298 559,000 22,506 581,506 8,628,000 1,596,897 10,224,897 Dec-31 244,000 9,219 253,219 163,000 1,223 164,223 407,000 10,442 417,442 8,730,000 1,321,503 10,051,503 Dec-32 249,000 3,094 252,094 249,000 3,094 252,094 8,831,000 1,042,195 9,873,195 Dec-33 6,563,000 809,729 7,372,729 Dec-34 4,081,000 616,809 4,697,809 Dec-35 4,230,000 471,069 4,701,069 Dec-36 1,455,000 321,850 1,776,850 Dec-37 1,530,000 247,281 1,777,281 Dec-38 1,605,000 168,869 1,773,869 Dec-39 ------1,690,000 86,613 1,776,613 Total $ 3,517,000 $ 794,020 $ 4,311,020 $ 5,831,000 $ 1,506,302 $ 7,337,302 $ 9,348,000 $ 2,300,322 $ 11,648,322 $ 330,069,000 $ 81,452,186 $ 411,521,186

Source: Calhoun Baker Inc.

37 TAX MATTERS

EXCLUSION OF INTEREST FROM GROSS INCOME In the opinion of Bond Counsel, interest on the Bonds, including accrued original issue discount, is excludable from gross income for federal income tax purposes under existing laws as enacted and construed on the date of initial delivery of the Bonds, assuming the accuracy of the certifications of the County and continuing compliance by the County with the requirements of the Internal Revenue Code of 1986, as amended (the “Code”), and regulations, rulings and court decisions promulgated thereunder. Interest on the Bonds will not be a preference item for purposes of computing the federal alternative minimum tax imposed on individuals and corporations; however, under the Code, to the extent that interest on the Bonds is a component of a corporate holder’s “adjusted current earnings,” a portion of that interest may be subject to the corporate alternative minimum tax.

In rendering its opinion, Bond Counsel has assumed continuing compliance by the County with its covenants contained in the Ordinance and the representations in the Tax Compliance Certificate executed by the County on the date of issuance of the Bonds. Such continuing compliance by the County after issuance of the Bonds relates to, among other things, the use and investment of proceeds of the Bonds and the rebate to the United States Treasury of specified arbitrage earnings, if any. Failure to comply with such covenants and representations could result in interest on the Bonds becoming includible in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds.

ORIGINAL ISSUE PREMIUM The Bonds are offered at a premium (“original issue premium”) over their principal amount. For federal income tax purposes, original issue premium is amortizable periodically over the term of a Bond through reductions in the holder’s tax basis for the Bond for determining taxable gain or loss from sale or from redemption prior to maturity. Amortization of premium does not create a deductible expense or loss. Purchasers of the Bonds should consult their tax advisers for an explanation of the amortization rules.

OTHER FEDERAL TAX MATTERS Ownership or disposition of the Bonds may result in other federal tax consequences to certain taxpayers, including, without limitation, certain S corporations, foreign corporations with branches in the United States, holders of and interest in a financial asset, securitization investment trust, and casualty insurance companies, individuals who otherwise qualify for the earned income credit and taxpayers who have an initial basis in the Bonds greater or less than the principal amount thereof, individual recipients of Social Security or Railroad Retirement benefits, and taxpayers, including banks, thrift institutions and other financial institutions subject to Code Section 265, who may be deemed to have incurred or continued indebtedness to purchase or to carry the Bonds.

No assurance can be given that amendments to the Code or other federal legislation will not be introduced and/or enacted which would cause the interest on the Bonds to be subject, directly or indirectly, to federal income taxation or adversely affect the market price of the Bonds or otherwise prevent the holders of the Bonds from realizing the full current benefit of the federal tax status of the interest thereon.

Bond Counsel is not rendering any opinion regarding any federal tax matters other than those described under the caption “TAX MATTERS - Exclusion of Interest From Gross Income” and expressly stated in the form of Bond Counsel opinion included as Appendix III. Purchasers of the Bonds should consult their independent tax advisors with regard to all federal tax matters. PENNSYLVANIA In the opinion of Bond Counsel, under the laws of the Commonwealth as enacted and construed on the date hereof, interest on the Bonds is exempt from Pennsylvania personal income tax and Pennsylvania corporate net income tax, and the Bonds are exempt from personal property taxes in Pennsylvania. However, such exemption does not extend to gift, estate, succession or inheritance taxes or any other taxes not levied or assessed directly on the Bonds or the interest thereon. Profits, gains or income derived from the sale, exchange, or other disposition of the Bonds are subject to state and local taxation within the Commonwealth.

38 The Bonds and the interest thereof may be subject to state and local taxes in the jurisdictions other than the Commonwealth under applicable state and local tax laws.

This summary is based on laws, regulations, rulings and decisions now in effect, all of which may change. Any change could apply retroactively and could affect the continued validity of this summary.

Purchasers of the Bonds should consult their independent tax advisors with regards to consequences of purchasing or holding the Bonds and all state and local tax matters that may affect them.

LEGAL MATTERS

The issuance and delivery of the Bonds are subject to approval as to legality by Rafaelle & Puppio LLP, Media, Pennsylvania, Bond Counsel. Certain legal matters will be passed upon for the Underwriter by Buchanan Ingersoll & Rooney PC, Philadelphia, Pennsylvania, and for the County by its Solicitor, Michael L. Maddren, Esquire, Media, Pennsylvania, and by McNichol, Byrne & Matlawski, P.C., special counsel to the County.

LEGALITY FOR INVESTMENT

Applicable laws of the Commonwealth of Pennsylvania provide that the Bonds are legal investments for funds held by, among others, banks, savings banks, trust companies, insurance companies or associations and fiduciaries. The Bonds are authorized security for deposits of funds of the Commonwealth of Pennsylvania and any political subdivision thereof.

REMEDIES OF REGISTERED OWNERS

The remedies available to registered owners upon any failure to pay principal of or interest on the Bonds when due include those prescribed in the Act. If such failure should continue for 30 days, the registered owners (subject to certain priorities) may bring suit for the amount due in the Court of Common Pleas for Delaware County, Pennsylvania.

The Act provides that any judgment recovered shall have “an appropriate priority” upon the moneys next coming into the treasury of the County. If the County defaults in the payment of principal of or interest on the Bonds and such default continues for 30 days, or if the County fails to comply with any provision of the Bonds or the Ordinance, the registered owners of 25% in aggregate principal amount of the Bonds may also appoint a trustee (who may be the Fiscal Agent) to represent the registered owners. Such trustee may, and upon written request of the owners of 25% in aggregate principal amount of the Bonds and being furnished with satisfactory indemnity shall, take one or more of the following actions: (i) bring suit to enforce all rights of the registered owners; (ii) bring suit on the Bonds; (iii) petition the court to levy on property subject to ad valorem taxation for the amount due on the Bonds; (iv) by suit in equity, enjoin any acts or things which may be unlawful or in violation of the rights of the registered owners all as set forth more fully in the Act and (v) after 30 days prior written notice to the County, declare the unpaid principal of the Bonds to be immediately due and payable with interest to the date of payment (which may be annulled as described in the Act). The taking of such action by such trustee shall preclude the taking of similar action by individual registered owners of the Bonds.

Pennsylvania’s Municipalities Financial Recovery Act, Act No. 1987-47, as amended and supplemented (“Act 47”) became effective on September 8, 1987. Under Act 47, upon a determination that a municipality is financially distressed (one indication of which is a default of the payment of principal of or interest on any bonds or notes) the Pennsylvania Secretary of the Department of Community and Economic Development shall appoint a coordinator who shall prepare a plan for restoring financial integrity to the municipality. All creditors are entitled to notice of the plan’s adoption by the municipality’s governing body. The intent of Act 47 is to provide for the adjustment of municipal debt by negotiated agreement with creditors. The plan, however, may recommend that the municipality file for relief under Chapter 9 of the United States Bankruptcy Code. The municipality’s governing body is also authorized, subject to certain preconditions including insolvency or an inability to meet its debts, to independently file for bankruptcy under Chapter 9. A bankruptcy filing would operate as an automatic stay of the commencement or continuation of any judicial or other proceeding against the municipality and its property. A plan

39 for the adjustment of debts filed by a municipality in such a proceeding could include provisions modifying or altering the rights of creditors, including the registered owners of the Bonds. Such a plan, if confirmed by a court, binds all creditors who had notice or knowledge of the plan and discharges all claims against the municipality provided for in the plan.

As noted above, the rights and remedies of bondholders are subject to the provisions of Chapter 9 of the United States Bankruptcy Code. In general, the Chapter permits, under prescribed circumstances, a political subdivision of a state to file a petition for relief in a bankruptcy court of the United States if it is insolvent or unable to meet its debts as they mature and desires to effect a plan to adjust its debt. Such plan may, on being approved by a certain percentage of creditors and the court, include provisions modifying or altering the rights of creditors.

Any reference herein to Act 47 or the United States Bankruptcy Code should not be taken as any indication that the County intends to proceed under either of those statutes.

CERTAIN LEGAL PROCEEDINGS

All litigation currently ongoing in which the County is a defendant is routine in nature. The majority of suits of these types are disposed of in the County’s favor prior to trial. In addition to routine litigation incidental to performance of the County’s governmental functions and litigation arising in the ordinary course relating to contract and tort claims and alleged violations of law, several suits have been filed and/or potential claims exist by current or former inmates at the G. W. Hill Correctional Facility, the County jail, alleging violations of civil rights and other claims. These claimants allege injuries, and in some instances death, as a result of the actions or inactions of prison officials. The Delaware County Board of Prison Inspectors has contracted with a private company to operate the County jail. The contractual agreement requires the private company to defend and fully indemnify the County against any and all claims and losses, such as those described above, relating to the operation of the jail.

The County is also involved in two pieces of litigation that could have a positive significant financial impact. One is a suit against telephone carriers for failure to properly bill and remit statutory fees to support the County’s 911 system. The other is against the Mortgage Electronic Recording System, a system numerous financial institutions use to subvert their obligation to record the transfer of mortgages with the Office of the Recorder of Deeds.

The ultimate outcome and fiscal impact, if any, on the County’s General Fund of the claims described above and others are not currently predictable. See also “Note 22. Commitments and Contingencies” of “APPENDIX II – COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014” attached hereto for additional information..

NO LITIGATION AFFECTING THE BONDS

No litigation or legal proceeding of any nature is now pending or, to the knowledge of the County, threatened that: (i) seeks to restrain or enjoin the issuance, sale, execution, or delivery of the Bonds; (ii) contests the validity of the Bonds or any actions of the County with respect to the issuance, sale, execution, or delivery of the Bonds; (iii) contests the pledge or application of any moneys or security provided for the payment of the Bonds; or (iv) contests the existence of the County or the powers of the County to accomplish the purposes for which the Bonds are being issued.

40 ADDITIONAL INFORMATION AND CONTINUING DISCLOSURE

ADDITIONAL INFORMATION Additional information concerning the County is available to the public. Persons wishing to obtain copies of the County’s Comprehensive Annual Financial Report (“CAFR”), 2016 Budget, Ordinance for the Bonds, or other information should address such requests to:

County Clerk County of Delaware Government Center Building, Room 202 Media, Pennsylvania 19063

The County may charge a fee for costs of reproduction and mailing of the information requested.

The CAFR is prepared by the Controller of the County in conformance with guidelines adopted by the Governmental Accounting Standards Board and the audit guide of the American Institute of Certified Public Accountants, Audits of State and Local Government Units.

The County also expects to provide financial and other information from time to time to any Nationally Recognized Statistical Rating Organization that has published a rating on the County or any of its debt obligations.

The foregoing statement on the furnishing of additional information reflects the County’s current practices, but it is not a contractual obligation to the holders of the County’s bonds or notes.

CONTINUING DISCLOSURE In order to enable the Underwriter to comply with the requirements of the Rule, the County will enter into a Continuing Disclosure Agreement with the Fiscal Agent for the benefit of the registered owners from time to time of the Bonds, the form of which is attached hereto as “APPENDIX IV – FORM OF CONTINUING DISCLOSURE AGREEMENT.”

Within the previous five years, in connection with its undertakings to provide continuing disclosure in connection with prior bond issues, the County failed to provide to the Municipal Security Rulemaking Board (the “MSRB”) through its Electronic Municipal Market Access system (“EMMA”), within 180 days of the end of each fiscal year, its CAFR’s for the fiscal years 2009, 2010, 2011, 2012, and 2013 and certain other annual financial information for the fiscal years 2009, 2010, 2011, 2012, 2013, and 2014, and the County failed to post on EMMA an event notice of a rating upgrade in 2010. The County has subsequently posted on EMMA the CAFR’s for fiscal years 2009 to 2013, certain Annual Financial Information for fiscal years 2009 to 2014, an event notice of the 2010 rating change, and event notices of its failures to comply with its continuing disclosure undertakings. The County is currently in compliance with its existing continuing disclosure undertakings in all material respects. The County has adopted internal policies to ensure that it remains in compliance with its continuing disclosure undertakings.

INDEPENDENT AUDITORS

The financial statements of the County included in “APPENDIX II – COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014” of this Official Statement, have been audited by Baker Tilly Virchow Krause, LLP, independent certified public accountants. The financial statements audited by Baker Tilly Virchow Krause, LLP have been included herein in reliance on their report given on the authority of that firm.

FINANCIAL ADVISOR

The Authority has retained Calhoun Baker Inc., Flourtown, Pennsylvania, as the municipal advisor (the “Municipal Advisor”) in connection with the preparation, authorization and issuance of the Bonds. The Municipal

41 Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness, or fairness of the information contained in the Official Statement. Calhoun Baker Inc. is an independent municipal advisory firm registered with the Securities and Exchange Commission and the MSRB and is (i) not engaged in the business of underwriting, marketing, or trading of municipal securities; (ii) not affiliated with any firm engaged in the business of underwriting, marketing, or trading of municipal securities; and (iii) not retained, employed, or compensated by any firm engaged in the business of underwriting, marketing, or trading of municipal securities. Calhoun Baker Inc. also serves as the Program Administrator of the Delaware Valley Regional Finance Authority, which periodically lends funds to the County and the DCSWA for their capital improvement programs.

UNDERWRITING

The Bonds are being purchased by Citigroup Global Markets Inc. (the “Underwriter”) at an aggregate purchase price of $55,985,395.41 (representing par plus net original issue premium of $6,822,900.50, and less the underwriter’s discount of $257,505.09). The Underwriter may offer and sell the Bonds to certain dealers and others (including sales for deposit into investment trusts, certain of which may be sponsored or managed by the Underwriter) at prices lower than the public offering prices stated on the inside cover page hereof, which public offering prices may also be changed from time to time by the Underwriter without prior notice. The Underwriter is obligated to purchase all of the Bonds if any are purchased.

Citigroup Global Markets Inc., the Underwriter of the Bonds, has entered into a retail distribution agreement with each of TMC Bonds L.L.C. (“TMC”) and UBS Financial Services Inc. (“UBSFS”). Under these distribution agreements, Citigroup Global Markets Inc. may distribute municipal securities to retail investors through the financial advisor network of UBSFS and the electronic primary offering platform of TMC. As part of this arrangement, Citigroup Global Markets Inc. may compensate TMC (and TMC may compensate its electronic platform member firms) and UBSFS for their selling efforts with respect to the Bonds. These distribution agreements do not imply suitability for, or a recommendation to, retail investors regarding the Bonds.

The Underwriter and its affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The Underwriter and its affiliates have, from time to time, performed, and may in the future perform, various investment banking services for the County for which they received or will receive customary fees and expenses.

In the ordinary course of their various business activities, the Underwriter and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the County.

RATINGS

Moody’s Investors Service, Inc. has assigned the Bonds a rating of “Aa1”, and Standard & Poor’s Ratings Services has assigned the Bonds a rating of “AA” with a “stable outlook”. The ratings have been assigned subject to the issuance of the Bonds. Any explanation of these ratings may only be obtained from those rating agencies. The County has furnished to the rating agencies certain information and materials concerning the County and the Bonds. Generally, rating agencies base their ratings on such information and materials and on their own investigations, studies and assumptions. A securities rating is not a recommendation to buy, sell, or hold securities. No assurance is given that such ratings will be maintained for any given period of time or that they may not be lowered or withdrawn entirely by the rating agencies if, in their judgment, circumstances so warrant. Any such downward change in or withdrawal of such ratings may have an adverse effect on the market price of the Bonds.

The County has not undertaken to maintain any particular rating on the Bonds.

42 CERTAIN REFERENCES

All summaries or descriptions of the provisions of the Bonds, the Ordinance, the Act or the Continuing Disclosure Agreement set forth in this Official Statement, and all other references in this Official Statement to other documents not purported to be quoted in full, are made subject to all the detailed provisions thereof, to which reference is hereby made for further information. Such summaries or descriptions are only brief outlines of certain of the provisions of such documents, law and materials, and do not purport to summarize or describe all of the provisions thereof.

All estimates and assumptions in this Official Statement are believed to be reasonable, but no representations whatsoever are made that such estimates or assumptions are correct or will be realized. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as such and not representations of fact.

The County has duly authorized the execution and delivery of this Official Statement.

COUNTY OF DELAWARE, PENNSYLVANIA

By: /s/ MARIO J. CIVERA, JR. Chairman, County Council

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

APPENDIX I

SOCIOECONOMIC AND DEMOGRAPHIC CHARACTERISTICS OF THE COUNTY OF DELAWARE

Appendix I

SOCIOECONOMIC AND DEMOGRAPHIC CHARACTERISTICS OF THE COUNTY OF DELAWARE

TABLE OF CONTENTS

INTRODUCTION ...... 1 POPULATION AND DEMOGRAPHIC TRENDS ...... 2 HOUSING CHARACTERISTICS ...... 6 INCOME CHARACTERISTICS ...... 9 EMPLOYMENT CHARACTERISTICS ...... 13 EDUCATION ...... 16 HEALTH CARE FACILITIES ...... 17 PARKS AND RECREATION ...... 18 SEAPORT ...... 18 UTILITIES ...... 18 TRANSPORTATION ...... 19

Appendix I

SOCIOECONOMIC AND DEMOGRAPHIC CHARACTERISTICS OF THE COUNTY OF DELAWARE

INTRODUCTION The County of Delaware, Pennsylvania (the “County”), the oldest settled land in the Commonwealth of Pennsylvania (the “Commonwealth” or “Pennsylvania”), is located in the southeastern corner of Pennsylvania, bounded on the north by Montgomery County, Pennsylvania, on the east by the City of Philadelphia, Pennsylvania, on the south by the Delaware River and the State of Delaware, and on the west by Chester County, Pennsylvania. The County is approximately 184.2 square miles in area and is part of the Philadelphia-Wilmington-Atlantic City Consolidated Metropolitan Statistical Area, which is composed of the counties of Bucks, Chester, Delaware, Montgomery and Philadelphia in Pennsylvania; Burlington, Camden, Gloucester, Cumberland, and Salem in New Jersey; New Castle in Delaware; and Cecil in Maryland.

Source: Delaware County Commerce Center

The County has 49 political subdivisions, including a third class city, 27 boroughs and 21 townships; 17 of these municipalities have populations exceeding 10,000 persons. The County includes such well-established residential communities along the Main Line in Radnor and Haverford Townships and along the train and trolley routes that run into Philadelphia. Newer developments are in the western portion of the County where large estates are interspersed with wooded areas and farms. The County’s character combines residential communities, rural areas and commercial and industrial developments. Heavy manufacturing formerly dominated the County’s economy; the economy is now evolving into one marked by light industry and service-oriented concerns.

I-1 POPULATION AND DEMOGRAPHIC TRENDS The County’s greatest population growth occurred in the two decades after World War II. Population declined during the 1970’s, but it has been stable since 1980. The Census Bureau estimates the County’s population in 2014 at 562,960, a slight increase from 2010. According to the Delaware County Planning Department, two factors are expected to affect population size in the next decade: the decrease in land available for residential development (most is in the western portion of the County) and the fact that most vacant land is zoned for low-density development.

Population Trends, 1980 to 2014 1980 1990 2000 2010 2014 United States 226,545,805 248,709,873 281,421,906 308,745,538 318,857,056 Pennsylvania 11,863,895 11,881,643 12,281,054 12,702,379 12,787,209 Delaware County 555,007 547,651 550,864 558,979 562,960

Sources: Pennsylvania State Data Center and U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

Population Density in 2014 Square Miles Persons per of Land Square Mile United States 3,531,905.40 90 Pennsylvania 44,742.70 286 Delaware County 183.84 3,062

Sources: Pennsylvania State Data Center and U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

The median age of the County’s population is a year older than that of the national population, but two years younger than that of the Commonwealth population.

Sex and Age Cohorts in 2014 Delaware United States Pennsylvania County Total population 318,857,056 12,787,209 562,960 Sex Male 49.2% 48.9% 48.0% Female 50.8% 51.1% 52.0% Age Under 5 years 6.2% 5.6% 6.0% 5 to 9 years 6.4% 5.7% 5.8% 10 to 14 years 6.5% 6.1% 6.6% 15 to 19 years 6.7% 6.6% 7.3% 20 to 24 years 7.1% 6.8% 7.1% 25 to 34 years 13.6% 12.8% 12.8% 35 to 44 years 12.8% 11.9% 11.9% 45 to 54 years 13.6% 14.1% 14.1% 55 to 59 years 6.7% 7.4% 7.1% 60 to 64 years 5.9% 6.5% 6.3% 65 to 74 years 8.3% 9.0% 7.9% 75 to 84 years 4.3% 5.1% 4.8% 85 years and over 1.9% 2.5% 2.5% Median age (years) 37.7 40.7 38.7 Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

I-2 The proportion of the County’s African American population is 58% greater than that of the United States and 78% greater than that of Pennsylvania. The proportion of the County’s Hispanic or Latino population is 20% of the national proportion and 54% of the Commonwealth proportion.

Race of Population in 2014 Delaware United States Pennsylvania County Total population 318,857,056 12,787,209 562,960 Race of population White 75.9% 83.4% 72.6% Black or African American 13.9% 12.4% 22.1% American Indian and Alaska Native 1.7% 0.8% 0.5% Asian 6.2% 3.6% 5.9% Native Hawaiian and Other Pacific Islander 0.4% 0.1% 0.1% Some other race 5.2% 2.2% 0.8% Hispanic or Latino race Hispanic or Latino (of any race) 17.3% 6.5% 3.5% Not Hispanic or Latino 82.7% 93.5% 96.5% Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

The proportion of the County’s population that was born in Pennsylvania is 30% higher than the proportion of the national population that was born in the current state of residence. The proportion of the County’s foreign born population is 73% of that of the United States and 151% of that of Pennsylvania. Compared to the national foreign born population, a higher proportion of the foreign born population in the County originates from Europe, Asia, and Africa.

Place of Birth in 2014 Delaware United States Pennsylvania County Total population 318,857,056 12,787,209 562,960 Place of birth State of residence 58.69% 73.43% 72.84% Different state 26.53% 18.48% 16.34% Born in Puerto Rico, U.S. Island areas, or born abroad to American parent(s) 1.48% 1.66% 1.10% Foreign born 13.29% 6.43% 9.72% Foreign born population 42,391,794 821,700 54,695 Citizenship status of foreign born Naturalized U.S. citizen 47.14% 51.11% 54.69% Not a U.S. citizen 52.86% 48.89% 45.31% Year of entry into the U.S. Entered 2010 or later 12.32% 17.53% 14.88% Entered before 2010 87.68% 82.47% 85.12% Region of birth Europe 11.24% 19.97% 16.62% Asia 30.08% 39.22% 42.54% Africa 4.56% 7.23% 20.21% Oceania 0.57% 0.47% 0.21% Latin America 51.64% 31.34% 18.84% Northern America 1.92% 1.77% 1.57% Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

I-3 The distribution of the types of households in the County is similar to those of Pennsylvania and the United States. The County has a slightly higher proportion of family households and children under the age of eighteen.

Households and Relationships in 2014 Delaware United States Pennsylvania County Number of households 117,259,427 4,945,972 204,574 Types of households Married-couple family With own children under 18 years 18.86% 17.07% 19.92% Without own children under 18 years 29.00% 30.73% 27.81% Male householder family With own children under 18 years 2.33% 2.09% 2.66% Without own children under 18 years 2.58% 2.46% 2.18% Female householder family With own children under 18 years 7.04% 6.30% 6.49% Without own children under 18 years 5.98% 5.74% 8.37% Total family households 65.80% 64.40% 67.43% Nonfamily households 34.20% 35.60% 32.57% Householder living alone 65 years and over 10.34% 12.08% 11.72% Under 65 years 17.46% 17.52% 17.16% Average household size 2.65 2.50 2.65 Average family size 3.26 3.11 3.27 Population in households 310,792,895 12,356,373 541,140 Relationships in households Householder 37.73% 40.03% 37.80% Spouse 18.05% 19.12% 18.05% Child 30.47% 29.31% 32.54% Other relatives 7.61% 5.99% 7.29% Nonrelatives Unmarried partner 2.31% 2.48% 1.72% Other nonrelative 3.82% 3.07% 2.59% Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

The proportions of the County’s population enrolled in school are similar to the national and Commonwealth proportions. The County has slightly higher proportions of preschool, nursery school, college, and graduate school enrollments.

School Enrollment in 2014 Delaware United States Pennsylvania County Population 3 years and over enrolled in school 82,063,714 3,011,245 149,102 School enrollment Nursery school, preschool 5.95% 5.76% 6.41% Kindergarten 5.12% 4.71% 5.08% Elementary school (grades 1-8) 40.18% 40.29% 37.41% High school (grades 9-12) 20.73% 20.94% 20.54% College or graduate school 28.02% 28.30% 30.56% Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

I-4 The proportion of the County’s population that has earned a bachelor’s, graduate, or professional degree is 25% higher than that of Pennsylvania and 21% higher than that of the United States.

Educational Attainment in 2014 Delaware United States Pennsylvania County Population 25 years and over 213,725,624 8,858,865 378,633 Educational attainment Less than 9th grade 5.64% 3.49% 2.66% 9th to 12th grade, no diploma 7.45% 7.07% 5.82% High school graduate (includes equivalency) 27.72% 36.35% 31.36% Some college, no degree 20.96% 16.20% 17.43% Associate's degree 8.16% 7.91% 6.41% Bachelor's degree 18.65% 17.54% 20.74% Graduate or professional degree 11.41% 11.44% 15.58% Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

I-5 HOUSING CHARACTERISTICS The proportion of the County’s housing units that are occupied is 5% greater than the national proportion and 4% greater than the Commonwealth proportion. The proportion of 1-unit, attached units in the County is 439% greater than that of the United States and 72% greater than that of Pennsylvania. Nearly 84% of the County’s housing units were built before 1980. The median number of rooms in the County is 0.8 rooms higher than the national median and 0.3 rooms higher than the Commonwealth median.

Housing Units in 2014 Delaware United States Pennsylvania County Total housing units 133,962,970 5,590,712 221,950 Occupancy Occupied housing units 87.53% 88.47% 92.17% Vacant housing units 12.47% 11.53% 7.83% Units in structure 1-unit, detached 61.50% 57.12% 45.81% 1-unit, attached 5.76% 18.43% 31.07% 2 units 3.77% 4.62% 4.29% 3 or 4 units 4.45% 4.19% 4.07% 5 to 9 units 4.88% 3.23% 2.78% 10 to 19 units 4.56% 2.50% 3.95% 20 or more units 8.68% 5.90% 7.77% Mobile home 6.32% 3.98% 0.26% Boat, RV, van, etc. 0.08% 0.02% 0.00% Year structure built Built 2010 or later 2.03% 1.25% 0.71% Built 2000 to 2009 14.63% 8.28% 4.39% Built 1990 to 1999 14.01% 9.47% 5.17% Built 1980 to 1989 13.70% 9.56% 5.85% Built 1970 to 1979 15.66% 12.54% 8.77% Built 1960 to 1969 11.00% 10.40% 12.76% Built 1950 to 1959 10.63% 13.82% 26.75% Built 1940 to 1949 5.25% 7.92% 13.67% Built 1939 or earlier 13.09% 26.76% 21.92% Rooms in structure 1 room 1.97% 1.78% 1.16% 2 rooms 2.53% 1.77% 1.23% 3 rooms 9.23% 7.23% 7.82% 4 rooms 16.64% 12.34% 11.43% 5 rooms 20.39% 16.52% 9.74% 6 rooms 17.88% 21.55% 23.69% 7 rooms 12.15% 14.71% 16.63% 8 rooms 8.39% 10.76% 12.93% 9 rooms or more 10.82% 13.34% 15.37% Median rooms 5.5 6.0 6.3 Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

I-6 The proportion of owner-occupied housing units in the County with a value of $200,000 or more is 10.9% greater than that of the United States and 17.4% greater than that of Pennsylvania.

Occupied Housing Units in 2014 Delaware United States Pennsylvania County Occupied housing units 117,259,427 4,945,972 204,574 Owner-occupied 63.10% 68.83% 70.13% Renter-occupied 36.90% 31.17% 29.87% Year moved into occupied unit Moved in 2010 or later 38.44% 30.69% 29.03% Moved in 2000 to 2009 31.23% 30.41% 31.91% Moved in 1990 to 1999 14.82% 16.01% 17.19% Moved in 1980 to 1989 7.20% 9.27% 9.61% Moved in 1970 to 1979 4.79% 6.82% 5.97% Moved in 1969 or earlier 3.51% 6.80% 6.29% Value of owner-occupied units Less than $50,000 9.80% 9.64% 4.37% $50,000 to $99,999 14.85% 16.87% 10.35% $100,000 to $149,999 15.19% 17.04% 15.02% $150,000 to $199,999 14.69% 17.54% 13.90% $200,000 to $299,999 18.15% 20.02% 23.82% $300,000 to $499,999 16.13% 13.42% 22.32% $500,000 to $999,999 8.80% 4.56% 8.81% $1,000,000 or more 2.39% 0.90% 1.41% Median value (dollars) 181,200 165,400 226,800 Gross rent of renter-occupied units No rent paid 5.30% 6.11% 5.21% Occupied units paying rent Less than $200 1.33% 1.78% 1.26% $200 to $299 2.91% 4.11% 1.76% $300 to $499 6.67% 8.08% 2.65% $500 to $749 19.30% 22.62% 15.50% $750 to $999 22.83% 25.25% 29.94% $1,000 to $1,499 25.78% 22.95% 30.58% $1,500 or more 15.88% 9.09% 13.09% Median rent (dollars) 934 848 969 Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

I-7 A map of the median home value by municipality is shown below. The highest home values are in the northern portion of the County, along the “Main Line”, in established suburban communities in the central portion of the County, and in the western municipalities that have been the location of new residential developments.

Delaware County Median Home Value by Municipality

0 - $100,000 $100,001 - $200,000 $200,001 - $300,000 $300,001 - $400,000 $400,001 - $500,000 $500,001 - $600,000

$600,001 or greater Radnor

Newtown Haverford

Marple Millbourne Upper Darby Township Edgmont E Lansdowne Upper Lansdowne Providence Yeadon Springfield Clifton Heights Aldan Darby Media Collingdale Morton Colwyn Thornbury Middletown Sharon Hill

Swarthmore Rutledge Glenolden Darby Rose Township Chester Ridley Valley Heights Nether Township Prospect Folcroft Park Providence Norwood Ridley Concord Park Aston Brookhaven Parkside Tinicum Chadds Upland Eddystone Ford Chester Township Upper Chichester Chester Bethel City

Trainer Lower Chichester Marcus Hook Borough

Data Source: U.S. Census Bureau, 2010-2014 American Community Survey 5-Year Estimates Prepared by: Delaware County Planning Department

I-8 INCOME CHARACTERISTICS The median income of households in the County is 17.4% higher than the national median and 18.4% higher than the Pennsylvania median.

Household Income in 2014 Delaware United States Pennsylvania County Total number of households 117,259,427 4,945,972 204,574 Income and benefits (2014 inflation adjusted dollars) Less than $10,000 7.28% 7.09% 6.15% $10,000 to $14,999 5.25% 5.29% 3.78% $15,000 to $24,999 10.54% 10.63% 9.09% $25,000 to $34,999 10.05% 10.07% 8.03% $35,000 to $49,999 13.47% 13.74% 13.01% $50,000 to $74,999 17.81% 18.38% 17.49% $75,000 to $99,999 12.03% 12.43% 13.01% $100,000 to $149,999 13.07% 12.99% 15.20% $150,000 to $199,999 5.15% 4.82% 6.69% $200,000 or more 5.34% 4.57% 7.55% Median household income (dollars) 53,657 53,234 62,993 Mean household income (dollars) 75,591 73,112 89,481 Households with earnings 77.64% 75.38% 78.50% Mean earnings (dollars) 77,468 76,368 92,617 Households with Social Security 30.26% 34.38% 31.19% Mean Social Security income (dollars) 17,907 18,311 19,254 Households with retirement income 18.11% 20.35% 19.52% Mean retirement income (dollars) 24,211 20,704 24,376 Households with Supplemental Security Income 5.43% 6.00% 5.90% Mean Supplemental Security Income (dollars) 9,399 9,648 10,510 Households with cash public assistance income 2.66% 3.41% 2.72% Mean cash public assistance income (dollars) 3,150 2,602 3,053 Households with Food Stamp/SNAP benefits in the past 12 months 13.22% 13.04% 11.02% Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

I-9 Per capita income in the County is 16% higher than the per capita income of the United State and 15% higher than the per capita income of Pennsylvania. The median income of family households in the County is 19% higher than the national median and 16% higher than the Pennsylvania median.

Family and Nonfamily Income in 2014 Delaware United States Pennsylvania County Income and benefits (2014 inflation adjusted dollars) Family households 77,152,072 3,185,054 137,948 Less than $10,000 4.66% 4.13% 3.79% $10,000 to $14,999 3.13% 2.84% 2.17% $15,000 to $24,999 7.87% 6.79% 5.09% $25,000 to $34,999 8.80% 8.42% 6.77% $35,000 to $49,999 12.92% 13.08% 11.29% $50,000 to $74,999 18.81% 19.84% 18.16% $75,000 to $99,999 13.97% 15.06% 15.04% $100,000 to $149,999 16.21% 16.96% 18.57% $150,000 to $199,999 6.65% 6.63% 8.98% $200,000 or more 6.98% 6.24% 10.14% Median family income (dollars) 65,910 67,876 78,625 Mean family income (dollars) 88,394 87,813 107,063 Per capita income (dollars) 28,889 29,220 33,502 Nonfamily households 40,107,355 1,760,918 66,626 Median nonfamily income (dollars) 32,220 30,685 35,911 Mean nonfamily income (dollars) 47,733 43,846 50,019 Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

The percentage of the population in the County with income below the poverty level is 29% lower than the national percentage and 19% lower than the Pennsylvania percentage.

Families and Individuals below the Poverty Level in 2014 Delaware United States Pennsylvania County Percentage with income below the Poverty Level in the past 12 months Family households All families 11.3% 9.4% 8.1% Married couple families 5.6% 4.1% 2.9% Female householder, no husband present 30.5% 28.5% 22.1% Individuals All people 15.5% 13.6% 11.0% Under 18 years 21.7% 19.4% 15.0% 18 years and over 13.6% 12.0% 9.8% 18 to 64 years 14.6% 13.1% 10.3% 65 years and over 9.5% 8.1% 8.0% People in families 12.8% 10.6% 8.4% Unrelated individuals 15 years and over 27.1% 25.6% 23.9% Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

I-10 The proportion of the population in the County with health insurance is slightly higher than the proportions of the United States and Pennsylvania.

Health Insurance Coverage in 2014 Delaware United States Pennsylvania County Civilian noninstitutionalized population 313,890,422 12,582,815 555,224 With health insurance coverage 88.32% 91.54% 92.11% No health insurance coverage 11.68% 8.46% 7.89%

Civilian noninstitutionalized population under 18 years 73,440,273 2,693,074 125,284 No health insurance coverage 5.99% 5.17% 4.02%

Civilian noninstitutionalized population 18 to 64 years 195,537,213 7,833,859 347,908 Employed population 138,970,640 5,626,837 248,024 With health insurance coverage 85.66% 89.86% 91.09% No health insurance coverage 14.34% 10.14% 8.91% Unemployed population 10,711,105 417,756 20,089 With health insurance coverage 64.68% 67.67% 69.99% No health insurance coverage 35.32% 32.33% 30.01% Population not in labor force 45,855,468 1,789,266 79,795 With health insurance coverage 82.25% 88.25% 87.92% No health insurance coverage 17.75% 11.75% 12.08% Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

A map of the mean income by municipality is shown below. As was the case with home values, the highest mean incomes are along the “Main Line”, in established central communities, and in the western suburbs.

I-11 Delaware County Mean Income by Municipality

0 - $60,000 $60,001 - $80,000 $80,001 - $100,000 $100,001 - $150,000 $150,001 or greater

Radnor

Newtown Haverford

Marple Millbourne Upper Darby Township Edgmont E Lansdowne Upper Lansdowne Providence Yeadon Springfield Clifton Heights Aldan Darby Media Collingdale Morton Colwyn Thornbury Middletown Sharon Hill

Trainer Lower Chichester Marcus Hook Borough

Data Source: U.S. Census Bureau, 2010-2014 American Community Survey 5-Year Estimates Prepared by: Delaware County Planning Department

I-12 EMPLOYMENT CHARACTERISTICS The County is adjacent to the City of Philadelphia and the Philadelphia International Airport and is located directly on the Delaware River, with access to the Delaware Bay and Atlantic Ocean. It also is served by an excellent rail and highway system. For these reasons, the County has always been an important trade area. For more than a century, the County has had a strong industrial base along the river. More than 12,600 business establishments are located in the County; the distribution of the establishments by the number of employees is similar to the national distribution.

Establishments by Number of Employees Delaware United States Pennsylvania County Total Establishments 7,488,353 297,692 12,628 1 to 4 employees 54.60% 50.90% 53.94% 5 to 9 employees 18.70% 20.26% 19.32% 10 to 19 employees 12.70% 13.50% 12.87% 20 to 49 employees 8.71% 9.43% 8.66% 50 to 99 employees 2.95% 3.28% 2.91% 100 to 249 employees 1.66% 1.86% 1.62% 250 to 499 employees 0.43% 0.48% 0.37% 500 to 999 employees 0.16% 0.19% 0.15% 1,000 or more employees 0.10% 0.11% 0.16%

Source: U.S. Census Bureau, 2013 County Business Patterns Survey

A listing of the largest, non-governmental employers in the County is shown below.

Largest Employers in Delaware County Employer Description Location 5,000 or more employees Crozer-Keystone Health Systems Health system Countywide Jefferson Health Systems Health system Countywide

2,500 to 4,999 employees Boeing Company Rotorcraft Division Ridley Township United Parcel Service Expediting service Tinicum Township Villanova University Education Radnor Township WaWa Convenience stores Countywide 1,000 to 2,499 employees Delaware County Community College Education Marple Township Elwyn, Inc. Training and education Middletown Township Fair Acres Geriatric center Middletown Township Harrah’s Chester Casino and racetrack Chester City Keystone Mercy Health plan Tinicum Township Kimberly-Clark Paper products Chester City Mercy Fitzgerald Hospital Hospital Yeadon Borough SAP America Inc. Software Newtown Township State Farm Insurance Concord Township Widener University Education Chester City 500 to 999 employees Citizens Bank of PA Banking Countywide Eastern University Education Radnor Township Franklin Mint Federal Credit Union Financial credit union Marple Township Glen Mills School Education Concord Township Haverford College Education Haverford Township Mercy Home Health Healthcare Springfield Township Monroe Energy Energy Trainer Borough South Company Manufacturing Concord Township Sunoco Energy Newtown Square Sunoco Logistics Energy Newtown Square Swarthmore College Education Swarthmore Borough Source: Delaware County Commerce Center

I-13 The market and transportation location of the County attracts foreign investment. Below is a listing of foreign firms that have invested in facilities in the County.

Foreign Direct Investment in Delaware County Company Description Country Braskem America, Inc. plastics / resin manufacturing Brazil Cott Beverages soft drink manufacturer Canada Novasep life sciences / chemical France Boiron medicinal / botanical manufacturing France Evonik Degussa organic chemical manufacturing Germany Gehr Plastics plastics manufacturing Germany SAP software / custom programming Germany Eaton Corporation electrical, hydraulic and mechanical manufacturing Ireland Castleway Properties real estate developer Ireland Micronic Manufacturing USA, LLC. traceable sample storage solutions Netherlands Iberdola Renewables wind and solar energy Spain Qlik Technologies, Inc. business intelligence systems Sweden Barry Callebaut chocolate manufacturing Switzerland AON Consulting, Inc. consulting services United Kingdom Source: Delaware County Commerce Center

Within the County are a myriad of manufacturing sites, from light industrial parks to small tract developments. Well-designed industrial parks located in Aston, Sharon Hill, Eddystone, Lester, Chester, Trainer, Broomall, Concordville, Newtown Square, Havertown and elsewhere across the County address the need for manufacturing and technical sites. Well-planned office parks, such as the Chadds Ford Professional Center, Newtown Square Corporate Campus, Radnor Corporate Center, Chesley Office Campus in Media, the Rose Tree Office Campus highrise in Upper Providence, Pennell Place in Middletown and Marple Commons in Broomall, offer rental or condominium facilities for professionals and small business owners. Numerous fine, old Victorian mansions in Media, the County seat, have been adapted for professional office use as well.

The County’s retail shopping picture is also very diverse. Included are independent neighborhood stores and several large factory outlets. Additionally three large, all-weather shopping malls (Granite Run, MacDade, and Springfield) offer clothing, household goods and other merchandise, along with consumer services and restaurants.

As shown in the table and chart below, the County’s unemployment rate has been lower than those of the United States and Pennsylvania. The County’s unemployment rate (seasonally adjusted) for October 2015 was 4.5%, and the unemployment rates were 5.0% for the United States and 5.1% for Pennsylvania.

Annual Labor Force and Unemployment Rates (not seasonally adjusted) United States Pennsylvania Delaware County Labor Unemployment Labor Unemployment Labor Unemployment Year Force Rate Force Rate Force Rate 2010 153,889,000 9.6% 6,381,000 8.5% 286,200 8.0% 2011 153,617,000 8.9% 6,395,000 7.9% 286,900 7.8% 2012 154,975,000 8.1% 6,465,000 7.9% 289,700 7.7% 2013 155,389,000 7.4% 6,442,000 7.4% 290,700 7.2% 2014 155,922,000 6.2% 6,378,000 5.8% 290,000 5.5% Source: Pennsylvania Department of Labor and Industry

I-14 Monthly Unemployment Rates (seasonally adjusted) 11.0%

10.0%

United States

9.0% Pennsylvania Delaware County

8.0%

7.0%

6.0%

5.0%

4.0%

Jan-10 Jan-11 Sep-11 Jan-12 Jan-13 Jan-14 Jan-15 May-10 Sep-10 May-11 May-12 Sep-12 May-13 Sep-13 May-14 Sep-14 May-15 Sep-15 Source: Pennsylvania Department of Labor and Industry

A comparison of the employment status and class of worker for persons 16 years or older is shown below. The County and the Commonwealth have a higher proportion of the labor force employed by the private sector than that of the nation.

Employment Status and Class of Worker in 2014 Delaware United States Pennsylvania County Population 16 years and over 253,588,947 10,405,544 452,278 Population 16 years and over in labor force 160,532,722 6,507,479 289,269 Employment status Employed in civilian labor force 58.37% 58.10% 59.15% Unemployed in civilian labor force 4.55% 4.40% 4.75% Armed Forces 0.39% 0.04% 0.05% Not in labor force 36.70% 37.46% 36.04% Civilian labor force 159,550,452 6,503,715 289,028 Percent Unemployed 7.2% 7.0% 7.4% Civilian employed population 16 years and over 148,019,908 6,045,924 267,524 Class of worker Private wage and salary workers 79.99% 84.37% 85.44% Government workers 13.85% 10.28% 8.85% Self-employed in own not incorporated business 6.00% 5.21% 5.48% Unpaid family workers 0.16% 0.14% 0.24% Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

I-15 A comparison of the occupation and industry of employed persons 16 years or older is shown below. The County has a higher concentration of management, business, science and arts occupations than do the United States and Pennsylvania. Employment in the County is more concentrated in the education and health services industries.

Occupation and Industry in 2014 Delaware United States Pennsylvania County Civilian employed population 16 years and over 148,019,908 6,045,924 267,524 Occupation Management, business, science, and arts occupations 36.90% 36.88% 41.04% Service occupations 18.21% 17.71% 18.22% Sales and office occupations 23.71% 23.64% 25.08% Natural resources, construction, and maintenance occupations 8.91% 8.43% 6.84% Production, transportation, and material moving occupations 12.27% 13.33% 8.81% Industry Agriculture, forestry, fishing and hunting, and mining 2.00% 1.51% 0.38% Construction 6.28% 5.94% 5.57% Manufacturing 10.28% 11.79% 8.03% Wholesale trade 2.75% 2.81% 1.98% Retail trade 11.53% 11.70% 11.13% Transportation and warehousing, and utilities 4.95% 5.07% 5.16% Information 2.18% 1.73% 1.80% Finance and insurance, and real estate and rental and leasing 6.50% 6.48% 8.07% Professional, scientific, and management, and administrative and waste management services 11.11% 9.87% 11.94% Educational services, and health care and social assistance 23.03% 25.83% 28.63% Arts, entertainment, and recreation, and accommodation and food services 9.82% 8.56% 9.33% Other services, except public administration 4.92% 4.72% 4.99% Public administration 4.66% 3.98% 2.99% Source: U.S. Census Bureau, 2014 American Community Survey 1-Year Estimates

EDUCATION Fifteen public school districts and approximately 95 private and nonpublic schools educate more than 90,000 students in the County. More than 80% of the County’s high school graduates pursue higher education. Below is a summary of elementary and secondary enrollment in the County.

Enrollment 2014-15 School Year

Public Private Grade Schools Schools Total Elementary 51,117 10,679 61,796 Secondary 22,581 6,025 28,606 Total 73,698 16,704 90,402

Source: Pennsylvania Department of Education

Fourteen colleges and universities located in the County offer baccalaureate and graduate degrees. Villanova University, with an enrollment of nearly 11,000 students, and Widener University, with an enrollment of nearly 6,000 students, are the largest colleges. The Delaware County Community College (the “DCCC”) operates three facilities in the County and six facilities in Chester County that serve 12,000 students. DCCC offers two-year transfer degrees for students who will transfer to another institution to complete their baccalaureate degrees, and four colleges offer

I-16 baccalaureate degree programs on-site at the DCCC facilities. DCCC and nine other institutions located in the County offer associate degrees or professional degrees. A list of the principal post-secondary institutions is below.

Post-Secondary Institutions in the County Baccalaureate and graduate degree programs Albright College (1) Cabrini College Cheyney University of Pennsylvania Delaware Valley University (1) Drexel University (1) Eastern University Haverford College Neumann University Pennsylvania State University – Brandywine Saint Joseph's University (1) Strayer University Swarthmore College Villanova University Widener University Transfer, associate, and professional programs All-State Career School Delaware County Community College Harris School of Business Kaplan Career Institute Olalus Institute Pennsylvania Institute of Technology Prism Career Institute Successful Aging Career Institute Valley Forge Military College (1) Baccalaureate degree program offered at the Delaware County Community College.

Source: Delaware County Commerce Center

HEALTH CARE FACILITIES Complete diagnostic, operative and post-operative medical services are offered by three health systems that operate six hospitals and eleven outpatient and community facilities that are located within the County. A Level II Trauma Center is provided at the Crozer-Chester Medical Center. Residents also have access to teaching hospitals and other major hospitals located in metropolitan Philadelphia.

I-17 Health Care Facilities in Delaware County Hospital Facility Beds Location Crozer-Keystone Health System Crozer-Chester Medical Center 330 Upland Delaware County Memorial Hospital 168 Drexel Hill Springfield Hospital 25 Springfield Taylor Hospital 105 Ridley Park Community Hospital Chester City Crozer Brinton Lake Glen Mills Media Medical Plaza Media Crozer-Keystone at Bromall (1) Broomall Surgery Center at Haverford Havertown Main Line Health System Riddle Memorial Hospital 204 Media Main LIne Health Center in Broomall Broomall Main Line Health Center in Newtown Square Newtown Square Mirmont Treatment Center Lima Mercy Health System Mercy Fitzgerald Hospital 204 Darby Mercy Home Health Springfield Mercy LIFE - Sharon Hill Sharon Hill Mercy LIFE - Valley View Elwyn (1) Opening in January 2016. Sources: Information provided by the respective institutions

PARKS AND RECREATION Federal, state, county and municipal governments participate in open-space programs within the County. The major federal park within the County is the Tinicum National Environmental Center, which is primarily a wildlife and bird sanctuary. State lands encompass historic sites such as Brandywine Battlefield, Penn Memorial Landing Stone and Governor Printz Park. The largest recreational facility in the County is the 2,566-acre Ridley Creek State Park. County properties are primarily wooded areas or open fields, while municipal parks are generally playgrounds and small community parks. Various private parks, such as the 700-acre Tyler Arboretum, are located throughout the County. The County’s numerous camping and golfing facilities include the Merion Golf Club in Haverford Township.

A wide range of cultural facilities is offered throughout the County, including the Media Theatre, the Brandywine River Museum and the County Institute of Science. Other cultural facilities include the Hedgerow Theatre, one of the oldest repertoire theatres in America, the Redwood Community Playhouse in Upland, the Upper Darby Theatre for the Performing Arts, the Community Arts Center in Wallingford, and the Rose Tree Summer Festival, a free outdoor music and theatre festival in Upper Providence Township. In addition, the colleges and universities located within the County offer a broad range of cultural activities for the general public.

SEAPORT The County is an integral part of the Port of Philadelphia, the world’s largest freshwater port. Marcus Hook, Eddystone, and Chester ports are located within the County and are accessible through the highway and rail systems.

UTILITIES Electric and gas service is provided by the PECO Energy Company. Water service is furnished by the Aqua America, Inc., Chester Water Authority and other municipal systems. Sewage service is provided by nine municipal authorities and by the Delaware County Regional Water Quality Control Authority. Telephone service is provided by Verizon.

I-18 TRANSPORTATION The primary highways in the County are Interstate 95 and Interstate 476 (the “Blue Route”). Interstate 95 runs through the County and Interstate 476 links Interstate 95 and the south end of the County with the Pennsylvania Turnpike in the north. Other regionally significant highways are U.S. Route 202, U.S. Route 1 (Philadelphia-Baltimore Pike), U.S. Route 13 (Philadelphia, Chester and Wilmington Pike), U.S. Route 30 (Lancaster Pike), U.S. Route 322 (28th Division Highway) and Pennsylvania State Routes 291 (Industrial Highway) and 3 (Philadelphia-West Chester Pike). The Commodore Barry Bridge provides a direct connection between the County and Southern New Jersey.

Source: Delaware County Planning Department

Several hundred motor carriers in the County serve industrial, residential and commercial users throughout the eastern United States. Consolidated Rail Corporation (Conrail) and CSX Inc. provide rail freight service to the County. The County is served by three commuter rail lines: the Marcus Hook-Newark (Delaware) branch, the Media-Elwyn branch and the Paoli-Thorndale branch, which connect the County with Philadelphia and other suburban areas. The commuter bus and rail service provided to the County is operated by the Southeastern Pennsylvania Transportation Authority (“SEPTA”). SEPTA’s Market Street Elevated Line and its Victory Division buses and trolleys converge at the 69th Street Terminal in Upper Darby and connect the County with Philadelphia and surrounding counties.

Philadelphia International Airport, located in Delaware and Philadelphia counties, provides passenger and freight service to all parts of the United States plus international service. Air cargo and helicopter services are also available.

I-19

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

APPENDIX II

COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

County of Delaware, Pennsylvania Comprehensive Annual Financial Report Year Ended December 31, 2014 Prepared by Edward E. O’Lone, CPA Controller

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

County of Delaware, Pennsylvania Table of Contents December 31, 2014

Page

Introductory Section

Transmittal Letter 5

GFOA Certificate of Achievement 11

Organizational Chart 12

Principal County Officials 13

Financial Section

Independent Auditors’ Report 15

Management’s Discussion and Analysis 18

Basic Financial Statements

Government-Wide Financial Statements:

Statement of Net Position 32

Statement of Activities 33

Fund Financial Statements:

Balance Sheet - Governmental Funds 35

Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 36

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 37

Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Comparison - General Fund 38

Statement of Net Position - Proprietary Funds 39

Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds 40

Statement of Cash Flows - Proprietary Funds 41

Statement of Fiduciary Net Position - Fiduciary Funds 42

Statement of Changes in Fiduciary Net Position - Fiduciary Funds 43

Notes to Financial Statements 44

1 County of Delaware, Pennsylvania Table of Contents December 31, 2014

Page

Required Supplementary Information

Schedule of Funding Progress for the Retirement Health Plan (OPEB) and OPEB Plan Schedule of Employer Cost 88

Schedule of Funding Progress for Employees’ Retirement Plan - Pension Trust Fund 89

Schedule of Changes in the County’s Net Pension Liability and Related Ratios - Pension Trust Fund 90

Schedule of Employer Contributions - Pension Trust Fund 91

Schedule of Investment Returns - Pension Trust Fund 92

Combining Statements and Schedules

Governmental Fund Types:

General Fund:

Description of Fund 93

Schedule of Expenditures Compared to Budget 94

Health and Human Service Funds:

Description of Sub-Funds 98

Combining Balance Sheet Schedule 99

Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance 101

Nonmajor Governmental Funds:

Description of Funds 104

Combining Balance Sheet 105

Combining Statement of Revenues, Expenditures, and Changes in Fund Balance 107

Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Liquid Fuels Fund 109

Capital Projects Funds:

Description of Sub-Funds 110

Combining Balance Sheet Schedule 111

Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 112

2 County of Delaware, Pennsylvania Table of Contents December 31, 2014

Page

Proprietary Fund Types:

Internal Service Funds:

Description of Funds 113

Combining Statement of Net Position 114

Combining Statement of Revenues, Expenses and Changes in Net Position 115

Combining Statement of Cash Flows 116

Component Units:

Description of Component Units 117

Combining Statement of Net Position 118

Combining Statement of Activities 119

Capital Assets,

Schedule of Changes in Capital Assets by Function 121

3 County of Delaware, Pennsylvania Table of Contents December 31, 2014

Statistical Section Table Page

Financial Trends:

Net Position by Component - Government Wide 1 124

Changes In Net Position - Government Wide 2 125

Fund Balances, Governmental Funds 3 127

Changes in Fund Balances, Governmental Funds 4 128

Revenue Capacity:

Assessed Value and Estimated Actual Value of Taxable Property 5 129

Direct and Overlapping Real Estate Tax Rates 6 130

Principal Property Taxpayers 7 131

Property Tax Levies and Collections 8 132

Debt Capacity:

Ratio of Outstanding Debt by Type 9 133

Direct and Overlapping Governmental Activities Debt 10 134

Computation of Legal Debt Margin 11 136

Demographic and Economic Information:

Demographic and Economic Statistics 12 137

Principal Employers 13 138

Operating Information:

Full-Time Equivalent County Government Employees by 14 139 Function/Program

Operating Indicators by Function/Program 15 140

Capital Asset Statistics by Function/Program 16 141

Introductory Section

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

CONTROLLER OF DELAWARE COUNTY COUNTY OF DELAWARE GOVERNMENT CENTER BUILDING 201 WEST FRONT STREET MEDIA, PENNSYLVANIA 19063

Phone: (610) 891-4441 Fax: (610) 566-3256 EDWARD E. O’LONE, C.P.A. ROBERT O’CONNOR CONTROLLER SOLICITOR THOMAS J. BURKE CHIEF DEPUTYCONTROLLER

RICK MEGARO, C.P.P. DEPUTY CONTROLLER

June 25, 2015

To the Citizens of the County of Delaware, Pennsylvania:

It is my honor to present the Comprehensive Annual Financial Report of the County of Delaware, Pennsylvania (the "County") for the year ended December 31, 2014. This Comprehensive Annual Financial Report ("CAFR") was prepared by the Controller's Department in conjunction with the independent certified public accounting firm of Baker Tilly Virchow Krause, LLP, whose opinion accompanies the basic financial statements contained in the Financial Section of this report.

Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the County. We believe the data, as presented, is accurate in all material respects; that it is presented in a manner designed to fairly set forth the financial position and results of operations of the County as measured by the financial activity of its funds; and that all disclosures necessary to enable the reader to gain an understanding of the County's financial affairs have been included.

The Management's discussion and analysis ("MD&A") immediately follows the independent auditors' report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter and should be read in conjunction with it.

Our County, the oldest settled area of Pennsylvania, is a Home Rule Charter county that is governed by a council of five members who are elected to staggered four year terms.

County Council is responsible for all legislative and administrative functions of County government. Although County Council has overall responsibility for all actions of County departments, the Executive Director, a County Council appointee, is directly responsible for the operations of certain departments as outlined in the Home Rule Charter and County Administrative Code. The primary administrative level staff assistance is provided to County Council by the Executive Director and the County Clerk. Legal guidance and representation is provided by the County Solicitor.

The powers and duties of County Council are many. The Home Rule Charter provides County Council with the authority to pass ordinances, resolutions and proclamations and to provide budgets and personnel to meet the needs of the people of Delaware County. County Council is responsible for adopting a budget each year. The budget includes setting taxes and fees sufficient to raise funds needed for budgeted expenditures. To raise funds for major capital projects, County Council also authorizes the sale of bonds. Many of the County's administered social programs are funded by federal and state grants.

This report includes all funds of the County. County Council decides the best means of providing services contemplated by the Home Rule Charter. The County provides a variety of services to the citizens of the County, including social service programs, economic development, administration of justice, maintenance of the County's correctional institution, operation of a County long-term nursing home, the conduct of elections, recreational opportunities and general governmental services.

In addition to general County activities, County Council has fiscal accountability for the Delaware County Solid Waste Authority, the Economic Development Oversight Board, the Delaware County Redevelopment Authority and the Delaware County Chester Waterfront Industrial Development Authority. Consequently, these component units are included in the reporting entity. County Council also has responsibility to appoint members to boards of a number of authorities and advisory boards, but the County's accountability for these entities does not extend beyond the appointments.

Controller's Department and Internal Controls

The Controller is the elected financial officer of the County and as such is independent of the executive and legislative branches of County government. The current Controller is a licensed Certified Public Accountant in the Commonwealth of Pennsylvania and works cooperatively with the independent auditors when they perform their annual audit. In addition, the County Controller's Office serves in the capacity of internal auditor for the County. During the year, the Controller's Office staff ensures the integrity of the County system of internal accounting controls and conducts financial and compliance audits as well as internal control reviews on various departments and offices.

Management of the County is responsible for establishing and maintaining an internal control structure. The objective of an internal control structure, consisting of the control environment, control procedures and accounting system, is to reasonably safeguard the County's assets, check the accuracy and reliability of its accounting data, promote operational efficiency and encourage adherence to prescribed managerial policies. Management believes that the County's internal control structure adequately meets these objectives.

The County utilizes a comprehensive integrated financial management and human resource system to enhance access to real time management information and to better implement efficient business practices. This system enables the County to maintain the appropriate flow of information, giving staff the necessary financial tools consistent with the needs of good government management.

Further, in response to the Right to Know law in the Commonwealth of Pennsylvania, the County created an Open Records Office. This office is responsible for ensuring the County’s compliance with the law and facilitating each citizen’s right to access government documents. In 2014, the County’s Open Records Office responded to 427 requests, all within the timeframe required by the law. In comparison, there were 484 requests in 2013.

County Council and the Controller will continue to utilize the latest technology and efficient planning in an effort to deliver the highest quality of government services consistent with the taxpayers' ability to pay and within the highest standards of internal controls over business practices.

Budgetary Controls

The County maintains budgetary controls to comply with legal provisions embodied in the annual budget adopted by County Council pursuant to the Home Rule Charter and Administrative Code. The County adopts an annual operating budget which is a legal document controlling expenditures, at the fund level, for the General Fund and the Liquid Fuels Special Revenue Fund. As indicated in the Financial Section of this report, the County has complied with such budgetary controls for the year ended December 31, 2014. 6

Financial Planning

In addition to the five-year Capital Improvement Plan prepared with the annual budget, the Budget Department also prepares multi-year operating budget projections for County Council’s review based on historical data and anticipated changes that will impact the operating budget.

The County also monitors market conditions on a regular basis, particularly with respect to its outstanding debt. When conditions are favorable and it is beneficial to the County, the County will undertake certain financing actions in order to achieve economic gains, mainly through securing lower interest rates.

Other Information

Independent Audit

An audit of the County's basic financial statements has been conducted by the independent certified public accounting firm of Baker Tilly Virchow Krause, LLP to meet the requirements of Section 909 of the Home Rule Charter and the federal Single Audit Act of 1996. Their report on the basic financial statements and additional information is included in the Financial Section of this report. Their report related to the Single Audit Act of 1996 and related Office of Management and Budget Circular A-133 is presented in a separate report.

Awards

The Government Finance Officers Association of the United States and Canada (“GFOA”) awarded a Certificate of Achievement for Excellence in Financial Reporting to the County for its comprehensive annual financial report for the year ended December 31, 2013. This was the 20th consecutive year that the County has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

The County continues to maintain its AA and Aa1 Bond rating in no small measure due to earning this prestigious award.

Other Accomplishments and Initiatives

The County took the lead in two important public health initiatives during 2014 by addressing the threat posed by the Ebola virus and the scourge presented by the abuse of prescription drugs. With regard to Ebola the county formed a broad-based task force comprised of individuals representing health care systems, emergency medical responders, schools and municipal governments. The members of the task force were able to communicate their respective plans, share resources and provide up to date information on the situation. Prescription drug abuse is a local problem as well as a nation-wide problem. The county has tackled the issue by developing a task force comprised of law enforcement, emergency medical responders, social service agencies, treatment professionals and the business community. The purpose of the task force is to promote awareness and prevention through education. The task force has been successful in reaching out to thousands of youth and adults throughout the county.

The County demonstrated its commitment to open space and recreation in 2014 through its work with the Friends of the Chester Creek Trail. Funding has been secured and agreements have been signed that pave the way for a 2.8 mile trail along the Chester Creek in the western end of the county. Residents can enjoy cycling, running and strolling along this scenic paved trail. In the eastern end, the county secured funding for a roughly 1 mile trail along the Darby Creek. This is the first phase of a trail that is envisioned to cover multiple municipalities through some of the county’s oldest, most established communities.

Since the announcement of the closing of two major oil refineries in the county in 2011, Delaware County Council has made economic development a major goal. Their efforts have been successful as the county emerges as a leader in the growing energy industry. Through Council’s efforts, the oil refineries have been repurposed and companies such as Monroe Energy, Eddystone Rail and Sunoco Logistics position the county as a major player in the refining, shipping and processing of liquid and natural gas products.

In 2014, Delaware County, along with the City of Philadelphia, Tinicum Township and Interboro School District announced that they reached an agreement in principle that will enable the Philadelphia International Airport to move forward on its airport expansion plans. The agreement will enable the Airport to fully implement the Capacity Enhancement Program (CEP), which was approved by the Federal Aviation Administration. The CEP is a comprehensive program to expand and modernize the Airport. It is anticipated to resolve issues that have plagued one of air traffic’s most crucial hubs for years by improving operational efficiencies, customer experiences and connectivity.

The agreement will result in thousands of direct construction jobs for the region and more jobs associated with the airport and its operations. It will also result in expanded access to overseas markets and more opportunities for Delaware County businesses, which will be good for the economic growth of the County as a whole.

This past year, Delaware County announced the completion of Delaware County 2035, a comprehensive policy framework plan for the County that establishes an overall vision for the future of the County through the year 2035. It also sets policies for development, redevelopment, conservation, and economic initiatives.

Delaware County 2035 consists of a central, land use policy Framework Plan and a number of related, interconnected, and more detailed component plans. Throughout 2014, an Open Space and Recreation Component Plan was fully underway and a Plan for Historic Preservation was initiated. This Framework and its component plans are a guide for public decision-making. The County’s elected and appointed officials will use the plan to evaluate future proposals or policy changes to ensure that their decisions are consistent with shared countywide goals.

During the initial year of implementation of Delaware County 2035, the County’s Planning Department began to carry out recommendations of the action strategies put forward in the Plan. The action strategies put forward in Delaware County 2035 continue to shape County policies and help guide programs for Delaware County municipalities.

Acknowledgments

I would like to acknowledge the cooperation that I received from the entire staff of the Controller's Department and the various Department officials throughout the County in the preparation of this report. I would also like to thank the Chairman and Members of County Council as well as our Executive Director for their interest and support in planning and conducting the financial operations of the County in a responsible, professional, and progressive manner.

The County Controller is cognizant of the limited resources of the County and its citizens. We will continue to monitor the financial performance of the County to ensure that the high-standards of service and affordability are maintained.

Edward E. O’Lone, CPA Controller

10 Government Finance Officers Association

Certificateof Achievement for Excellence in Financial Reporting

Presented to County of Delaware Pennsylvania

For its Comprehensive Annual Financial Report for the Fiscal Year Ended

December 31, 2013

ExecutiveDirector/CEO

11 Organizational Chart

ELECTORATE DELAWARECOUNTY

Tai:C l.'1111 6uta, P 11)1•: T/1'0.. l Tt ll: O:tll - c out ..:. .<1n11. 6Kl.01 Tit~ ,,~, om~ 01 C(4fllflll tt •.:. .6H '4 • B11p.! -Tra11• ..:.1~~al P1b1•: '*ga1..:. .,c1•) U:111 El:C'On F!tlilJ)U 11\l (!W ...:. .ff. vlh ai 1/ 1'11lU 4 Ullt Ptno,al FIi~ 1.1a1, •a1 6uta, Pict>. P1b1•: •.:. .<11111S.'4 . OktU:1 Ot1Hd?I G I O.nPI ~ I Puc•~ 11g Jut>~ J1c1•::1.11 Fan..:. .er~, Ll>ra•i s,,~:iort I I Ct, P~l60U ~I Sl?I\'~ $ co1,to1:,

l.l~d•~eil CoutH OIH Et.l'llltH Po••~ •.:. .c111t1 61d:1~tl.lt1t El:C. si:w•~, f.:tCOl:11/ 1t.ll.• ..•,. r.101>nl Bnug . l,lgt CC41l.Hta lQ Hta111g 11-HOI H .':..CJU::Olllt 01.YJ.C°'1>: a.u•n C ct11111. ~

COIUIMI Pl.'lalllg f.:tCOl

I.IObl VtU ::1:4 ~ti t

Hllll

County of Delaware, Pennsylvania

Principal County Officials December 31, 2014

Council

Thomas J. McGarrigle - Chairman Mario J. Civera, Jr. - Vice Chairman John P. McBlain - Member Colleen P. Morrone - Member David J. White - Member

Controller

Edward E. O’Lone, CPA

District Attorney

John J. Whelan, Esq.

Jennifer Holsten Maddaloni, Esq.

Sheriff

Mary McFall Hopper

Executive Director

Marianne Grace

Solicitor

Michael L. Maddren, Esq.

Budget Director

James P. Hayes, CPA

Treasurer

John A. Dowd

Judicial Support

Angela L. Martinez, Esq.

County of Delaware, Pennsylvania

Principal County Officials December 31, 2014

Recorder of Deeds

Thomas J. Judge, Sr.

County Clerk

Anne Coogan

Medical Examiner

Fredric N. Hellman, M.D.

Court of Common Pleas Board of Judges

Chad F. Kenney, President Judge James F. Proud George A. Pagano Ann A. Osborne Kevin F. Kelly Kathrynann W. Durham Barry C. Dozor James P. Bradley James F. Nilon, Jr. Mary Alice Brennan Gregory Mallon Linda A. Cartisano Spiros E. Angelos G. Michael Green Nathaniel C. Nichols Christine Fizzano Cannon John P. Capuzzi Richard M. Cappelli William C. Mackrides Anthony D. Scanlon

Senior Judges

Michael F. X. Coll Joseph P. Cronin, Jr. Charles B. Burr, II Frank T. Hazel

Financial Section

Baker Tilly Virchow Krause, LLP 220 Regent Ct, Ste C State College, PA 16801-7969 tel 814 237 6586 tel 800 267 9405 fax 888 264 9617 bakertilly.com

Independent Auditors’ Report

County Council County of Delaware, Pennsylvania

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activity, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County of Delaware, Pennsylvania (the “County”), as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the aggregate discretely presented component units, comprised of the Delaware County Solid Waste Authority, which reflect total assets of $70,636,763 as of December 31, 2014, and total revenues of $35,016,600 for the year then ended, the financial statements of the Economic Development Oversight Board, which reflect total assets of $1,223,117 as of December 31, 2014, and total revenues of $651,476 for the year then ended, the financial statements of the Redevelopment Authority of the County of Delaware, which reflect total assets of $5,451,045 as of December 31, 2014, and total revenues of $11,372,450 for the year then ended, and the financial statements of the Delaware County Chester Waterfront Industrial Development Authority, which reflect total assets of $25,381,598 as of December 31, 2014, and total revenues of $7 for the year then ended. Those financial statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Delaware County Solid Waste Authority, Economic Development Oversight Board, Redevelopment Authority of the County of Delaware, and the Delaware County Chester Waterfront Industrial Development Authority, is based on the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An Affirmative Action Equal Opportunity Employer 15

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activity, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County of Delaware, Pennsylvania, as of December 31, 2014, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As disclosed in Notes 1 and 13 to the financial statements, the County adopted the provisions of Governmental Accounting Standards Board Statement No. 67, Financial Reporting for Pension Plans, an Amendment to GASB Statement No. 25 in 2014 to conform to accounting principles generally accepted in the United States of America. The County expanded its note disclosures and required supplementary information related to its pension plan. Our opinion is not modified with respect to this matter.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis (“MD&A”) on pages 18 through 30, the Schedule of Funding Progress for the Retirement Health Plan (“OPEB”), the Schedule of Funding Progress for Employee’s Retirement Plan, the Schedule of Changes in the County’s Net Pension Liability and Related Ratios, the OPEB Plan Schedule of Employer Cost, Schedule of Employer Contributions, and the Schedule of Investment Returns on pages 88 through 92 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 16

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County’s basic financial statements. The combining and individual nonmajor fund financial statements and schedules, the introductory section and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and schedules on pages 93 through 121 are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America by us and other auditors. In our opinion, based on our audit, the procedures performed as described above, and the reports of the other auditors, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The introductory section and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.

Philadelphia, Pennsylvania June 25, 2015

County of Delaware, Pennsylvania

Management’s Discussion and Analysis (Unaudited)

This Management’s Discussion and Analysis (“MD&A”) is intended to provide a narrative overview and analysis of the financial activities of the County of Delaware for the year ended December 31, 2014 compared to 2013. The County’s financial performance is discussed and analyzed within the context of the financial statements and the disclosures that follow. Additional information is provided in the Transmittal Letter preceding this Management Discussion and Analysis which can be found on pages 5-10 of this report. This discussion focuses on the County’s primary government. Component units, unless otherwise noted, are not included in this discussion.

Financial Highlights

During 2014, the County’s total net position as shown in the government wide statements increased by $2,609,022. This increase in net position is primarily attributable to an increase in real estate tax revenues as well as prudent management of expenses.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the County’s basic financial statements. The County’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the County’s finances, in a manner similar to a private- sector business.

18 County of Delaware, Pennsylvania Management’s Discussion and Analysis (Unaudited)

The statement of net position presents information on all of the County’s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the County is improving or deteriorating.

The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Both of the government-wide financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the County include general government, judicial, corrections, health and welfare, highways, bridges, and streets. The business- type activity of the County is a geriatric center.

The government-wide financial statements include not only the County itself (known as the primary government), but also a legally separate Solid Waste Authority, legally separate Economic Development Oversight Board, legally separate Redevelopment Authority and legally separate Chester Waterfront Industrial Development Authority, for which the County is financially accountable. Financial information for these component units is reported separately from the financial information presented for the primary government itself.

The government-wide financial statements can be found on pages 32-34 of this report.

Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the County can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

19 County of Delaware, Pennsylvania Management’s Discussion and Analysis (Unaudited)

Since the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The County maintains ten individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, capital projects fund, and the health and human service funds, all of which are considered to be major funds. Data from the other seven governmental funds are combined into a single, aggregated presentation captioned “Other Governmental Funds”. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements and schedules elsewhere in this report.

The County adopts an annual appropriated budget for its General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget.

The basic governmental fund financial statements can be found on pages 35-38 of this report.

Proprietary funds. The County maintains two proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County uses an enterprise fund to account for its geriatric center. Internal service funds are an accounting device used to accumulate and allocate costs internally among the County’s various functions. The County uses internal service funds to account for its health, workers’ compensation and casualty/liability insurance. Since these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining schedules elsewhere in this report.

The basic proprietary fund financial statements can be found on pages 39-41 of this report.

20 County of Delaware, Pennsylvania Management’s Discussion and Analysis (Unaudited)

Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 44-87 of this report.

Required supplementary information. Certain required supplementary information concerning the County’s progress in funding its obligations to provide pension and OPEB benefits to its employees and retirees and their dependents and changes in the County’s pension liability, employer contributions and investment return can be found on pages 88-92 of this report.

Other information. The combining statements and schedules referred to earlier in connection with government fund types, proprietary fund types and component units are presented immediately following the notes to the financial statements. Combining and individual fund and component unit statements and schedules can be found on pages 93-121 of this report.

General Fund Budgetary Highlights

The General Fund final expenditure budget for fiscal year 2014 was approximately $229 million. This was an increase of approximately $6 million or 2.7% from the prior year final budget. There were no council amendments to the 2014 General Fund budget. The County expended approximately $12 million less than budgeted as a result of controlling expenditures.

The General Fund budget complied with financial policies approved by the County Council.

Government-Wide Financial Analysis

The County’s net position includes its net investment in capital assets (e.g., land, buildings, and equipment); less any related debt used to acquire those assets that is still outstanding. The County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. The County’s investment in its capital assets is reported, net of related debt, at $(60,035,609). It should be noted that the County previously issued debt of approximately $32 million with the corresponding assets being recorded on the County’s discretely presented component unit, County of Delaware Solid Waste Authority’s balance sheet and debt of approximately $29 million with the corresponding assets being recorded on the County’s discretely presented component unit, the Delaware County Chester Waterfront Industrial Development Authority’s balance sheet.

21 County of Delaware, Pennsylvania Management’s Discussion and Analysis (Unaudited)

County’s Condensed Statement of Net Position (In Millions)

Governmental Activities Business-Type Activity Total % 2014 2013 2014 2013 2014 2013 Change

Current and other assets $ 361 $ 346 $ 27 $ 27 $ 388 $ 373 4.02 % Capital assets 170 169 11 12 181 181 0.00

Total assets 531 515 38 39 569 554 2.71

Other liabilities 131 108 8 8 139 116 19.83 Long-term liabilities outstanding 406 416 30 31 436 447 (2.46)

Total liabilities 537 524 38 39 575 563 2.13

Net position: Net investment in capital assets (60) (68) (21) (21) (81) (89) (8.99) Restricted 7 11 - - 7 11 (36.36) Unrestricted 47 48 21 21 68 69 (1.45)

Total net position $ (6) $ (9) $ - $ - $ (6) $ (9) (33.33) %

22 County of Delaware, Pennsylvania Management’s Discussion and Analysis (Unaudited)

County’s Condensed Statement of Activities (In Millions)

Governmental Activities Business-Type Activity Total % 2014 2013 2014 2013 2014 2013 Change

Program revenues: Charges for services $ 26 $ 28 $ 76 $ 75 $ 102 $ 103 (0.97) % Operating grants and contributions 315 303 - - 315 303 3.96 Capital grants - 1 - - - 1 (100.00) General revenues: Property taxes 173 165 - - 173 165 4.85 Gaming revenue 9 9 - - 9 9 0.00 Investment earnings 2 3 - 1 2 4 (50.00)

Total revenues 525 509 76 76 601 585 2.74

Program expenses: General government 141 131 - - 141 131 7.63 Judicial 47 48 - - 47 48 (2.08) Corrections 71 71 - - 71 71 0.00 Health and human services 251 248 - - 251 248 1.21 Highways, streets and bridges 2 3 - - 2 3 (33.33) Interest on long- term debt 8 8 - - 8 8 0.00 Geriatric center - 78 80 78 80 (2.50)

Total expenses 520 509 78 80 598 589 1.53

Transfers (2) (4) 2 4 - - 0.00

Change in net position 3 (4) - - 3 (4) (175.00)

Net position, beginning (9) (5) - - (9) (5) 80.00

Net position, ending $ (6) $ (9) $ - $ - $ (6) $ (9) (33.33) %

23 County of Delaware, Pennsylvania Management’s Discussion and Analysis (Unaudited)

Governmental activities. Governmental activities increased the County’s net position by approximately $3 million. Key elements of this increase are a result of the following:

 General revenues increased by approximately $8 million due to an increase to the property tax millage rate for 2014 as well as an increase in the overall assessment amount.

 Operating grants and contributions increased by approximately $12 million primarily resulting from increases in additional health and human service grants.

 Expenses were held in check through staff vacancies, the County retirement incentive program, cost containment measures and lower than expected insurance, benefits, and retirement contribution costs.

 The operating transfer from the General Fund to the Geriatric Center decreased by approximately $2 million.

Business-type activity. Business-type activities resulted in a net transfer of $2 million from the general fund. In 2013 the net transfer was $4 million. Key elements of changes in the business-type activity are as follows:

 The County’s geriatric center costs were down approximately $2 million due to ongoing efforts on cost containment and less in workers compensation claims.

 The geriatric center’s revenue increased by approximately $600,000 due to supplemental payments received from the PA Department of Public Welfare.

24 County of Delaware, Pennsylvania Management’s Discussion and Analysis (Unaudited)

Financial Analysis of the Major Funds

General Fund

Revenues of the general fund totaled $237,345,157 for the year ended December 31, 2014. The following represents a summary of general fund revenue, by source, along with changes from 2013:

Increase Percentage 2014 2013 (Decrease) Increase Amount Amount from 2013 (Decrease)

Real estate taxes $ 171,551,067 $ 164,860,852 $ 6,690,215 4.06 % Gaming revenue 8,604,779 9,334,840 (730,061) (7.82) Licenses and permits 17,415 62,948 (45,533) (72.33) Investment earnings 989,914 934,677 55,237 5.91 General grants 24,333,691 24,778,008 (444,317) (1.79) Charges for services, fines, and forfeits 21,915,998 22,860,520 (944,522) (4.13) Other 9,932,293 8,433,514 1,498,779 17.77

Total $ 237,345,157 $ 231,265,359 $ 6,079,798 2.63 %

Real estate tax revenue increased in 2014 from 2013, as a result of an increase in the County’s millage rate and an increase in the overall assessment amount in 2014. Actual taxes collected were higher than budgeted for 2014, primarily as a result of increased tax collections from prior years.

The decrease in gaming revenues is primarily due to the rise in the number of licensed gaming facilities in the local market.

General grants decreased slightly due to a decrease in expenditures which are reimbursable by the state.

The decrease in charges for services, fines, and forfeits is mainly due to reduced departmental revenues related to real estate sales and transfers, wills and estates and in the area of court- related fines and fees.

25 County of Delaware, Pennsylvania Management’s Discussion and Analysis (Unaudited)

General fund expenditures totaled $216,583,696 which represents an increase of $2,516,763 or 1.2% from 2013. The following represents a summary of general fund expenditures for the year ended December 31, 2014, by source, along with changes from 2013:

Increase Percentage 2014 2013 (Decrease) Increase Amount Amount from 2013 (Decrease)

General government $ 23,146,549 $ 22,575,866 $ 570,683 2.53 % Judicial 50,873,015 50,000,068 872,947 1.75 Corrections 64,184,935 63,059,037 1,125,898 1.79 Transportation 6,921,000 6,921,000 - 0.0 Other 47,150,666 47,263,253 (112,587) (0.24) Debt service: Principal 16,861,294 16,179,257 682,037 4.22 Interest 7,446,237 8,068,452 (622,215) (7.71)

Total $ 216,583,696 $ 214,066,933 $ 2,516,763 1.18 %

General government expenditures increased primarily as a result of increased costs related to the departments of Facilities Management, Information Technology, Telecommunications, Administrative Services and Voting Machines.

Corrections expenditures increased primarily as a result of increased costs related to the County Prison and the office of the Medical Examiner and District Attorney.

The overall increase in debt service expenditures is primarily due to increased principal costs in 2014.

26 County of Delaware, Pennsylvania Management’s Discussion and Analysis (Unaudited)

The following shows the original and final budget for the General Fund (which as noted above required no councilmanic changes):

Increase Original Final (Decrease)

Revenues: Real estate taxes $ 166,986,000 $ 166,986,000 $ - Gaming revenue 10,000,000 10,000,000 - Licenses and permits 37,000 37,000 - General grants 28,388,000 28,388,000 - Charges for services, fines and forfeits 23,862,000 23,862,000 - Investment earnings 800,000 800,000 - Other 8,410,000 8,410,000 -

Total revenues 238,483,000 238,483,000 -

Expenditures: General government 24,948,000 25,181,279 233,279 Judicial 57,153,000 57,153,000 - Corrections 64,653,000 65,210,494 557,494 Transportation 6,921,000 6,921,000 - Other 53,466,000 50,196,227 (3,269,773) Debt service: Principal 19,440,000 16,865,000 (2,575,000) Interest 9,371,000 7,450,000 (1,921,000)

Total expenditures $ 235,952,000 $ 228,977,000 $ (6,975,000)

Expenditures

General Government - The general government budget was increased primarily as a result of unanticipated costs for the departments of Administrative Services, Information Technology, and Parks & Recreation.

Corrections - The corrections budget was increased primarily as a result of unanticipated contractual revenue reductions relative to the County Prison, which required additional County funding.

Other - The budget for “other” expenditures was reduced primarily to reflect the allocation of benefits expense to the 911 Fund.

Debt service - The overall debt service budget was reduced to reflect the allocation of debt service expense to the geriatric center.

27 County of Delaware, Pennsylvania Management’s Discussion and Analysis (Unaudited)

Capital Projects Funds

The County’s Capital Project Funds account for financial resources expended to acquire or construct property and equipment. For the year ended December 31, 2014, the County expended $10,801,510 for such projects which represents an increase of $341,173 from 2013. This spending is in line with 2013. Capital Projects Fund balances at December 31, 2014 totaled $14,173,466, of which $5,475,000 is nonspendable for an investment pledged by the Delaware County Solid Waste Authority as a Department of Environment Protection Agency bonding requirement.

Health and Human Service Funds

The Health and Human Service Funds’ revenues are derived from specific sources and are designated for specific uses. Such funds, primarily Commonwealth of Pennsylvania and federal grants, are restricted by law or other formal action to expenditures for specific purposes. The Health and Human Service Funds’ had a combined deficiency of revenues over expenditures of approximately $6,423,000 in 2014 and 2013. Such deficiencies represented County match in both years and were reflected as operating transfers from the General Fund accordingly.

Other Governmental Funds

The Other Governmental Funds revenues are derived from specific sources and are designated for specific uses. Such funds, primarily Commonwealth of Pennsylvania and federal grants, are restricted by law or other formal action to expenditure for specific purposes.

The County maintains seven special revenue funds, which contain activity related to Social Services, Employment and Training, the County’s 911 Program, Library Services, Bridge Construction and Repair, Community Development Block Grant Funding and Marcellus Shale Impact Fees. Revenues and expenditures totaled $45,211,189 and $51,471,914 respectively, for 2014. These amounts represent an increase in revenue of 7.8% and an increase in expenditures of 6.1% from 2013 amounts. The 911 program had a deficiency of revenues over expenditures of approximately $6.9 million which is the County subsidy. The following programs had excess (deficiency) revenues over expenditures in 2014 as follows: - CDBG/Rehab program - $163,982, Library - $(72,926), Liquid Fuels - $(346,643) and Marcellus Shale - $38,358.

Pension Trust Fund

The net position - reserved for employee’s pension benefits was $463,376,325. The funding status of the employees’ pension trust fund remains sound.

Fund Balances

Management feels that the restrictions, commitments and assignments of its fund balances does not significantly affect the resources available for future use of the County for ongoing operations.

28 County of Delaware, Pennsylvania Management’s Discussion and Analysis (Unaudited)

Capital Assets

The County’s investment in capital assets for its governmental and business-type activities as of December 31, 2014, amounts to $180,906,226 (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements.

Governmental Business-Type Activities Activity Total

Land $ 5,658,759 $ 5,658,759 Land improvements 4,916,281 4,916,281 Buildings and improvements 121,205,013 $ 8,717,628 129,922,641 Equipment 24,475,443 2,479,043 26,954,486 Infrastructure 4,654,975 4,654,975 Construction in progress 8,799,084 8,799,084

Total $ 169,709,555 $ 11,196,671 $ 180,906,226

Additional information on the County’s capital assets can be found in Note 11 on page 64 of this report.

Long-Term Debt

As of December 31, 2014, the County’s net general obligation debt of $293,615,899 is well below the legal limit of $1,536,253,887 by $1,216,654,887. Additional information on the County’s long-term debt can be found at Note 15 on pages 73-76 of this report.

The County’s bonds continue to have a favorable rating from Moody’s Investors Services, Inc. of “Aa1” and Standard and Poor’s Rating Group of “AA.”

29 County of Delaware, Pennsylvania Management’s Discussion and Analysis (Unaudited)

Economic Outlook

The County of Delaware experienced another successful year in the economic development front. Our growth in 2014 remained consistent and stable.

Back in 2011, our county was devastated by the news that our two refineries; Sun Company and Conoco Phillips were closing and hundreds of people were out of work. Today, those closed refineries have been repurposed and Delaware County is at the epicenter of the growing energy industry. Monroe Energy, Eddystone Rail, Brasken, Sunoco Logistrics, and the Mariner East pipeline are all positioning our small county as a leader in the U.S. shale oil and gas industries.

The County’s role in the refining, shipping, and processing of liquid and natural gas products is significant. The entire state benefits from this subsequent investment in our county. We have seen the headlines about Marcus Hook, calling it “Rebound Town”, but that’s only one segment of our growth. Boeing, one of our leading industries in Ridley Township learned in 2014 that the U.S. Navy plans to procure 12 V-22 Ospreys which should keep thousands of workers employed building the fuselage and subsystems at the Ridley plant.

Sun Company is moving its corporate headquarters from center city Philadelphia to a 200,000 square foot building in Newtown Square at the Ellis Preserve bringing 400 employees to that town.

Day and Zimmerman, an engineering and construction firm is relocating its Wilmington office to the Wharf Building in Chester, spending $1.2 million to rehab the space and bring 100 jobs to the location.

New Hudson Facades which manufactures curtain wall systems is building a $16 million facility in Lower Chichester creating 168 jobs.

In Ridley Township, a $43 million mixed use development project is underway on a piece of land that was vacant since 1980. Soon, there will be retail stores and a beautiful new hotel on the property.

Brandywine Mills is a $33 million commercial development under construction in Concord and some grocery shoppers are awaiting the opening of Wegmans on the site.

In Middletown Township, the Granite Run Mall is being revitalized and in Marple Township, there are plans for a major retail and residential development on the grounds of the former CK Center and Don Guanella Village. There are over 200 acres on this property in Marple Township.

The County’s Industrial Development Authority recently commissioned a follow-up study by IHS Global to target potential development opportunities along the waterfront as the result of the construction of the Mariner East II pipeline by Sunoco Logistics. Over 250,000 barrels of shale gas daily will be transported to Marcus Hook for processing when the $2 million project is completed. Potential future ancillary developments are boundless.

As good as the past has been, the future promises even more positive growth!

30 County of Delaware, Pennsylvania Management’s Discussion and Analysis (Unaudited)

Requests for Information

Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Controller, County of Delaware, 201 West Front Street, Media, Pennsylvania 19063.

Complete financial statements for the individual component units can be obtained from their respective administrative offices as follows:

 Delaware County Solid Waste Authority Rose Tree Park Hunt Club 1521 North Providence Road Media, Pennsylvania 19063

 Economic Development Oversight Board 100 West 6th Street, Suite 100 Media, Pennsylvania 19063

 Redevelopment Authority of the County of Delaware 100 West 6th Street, Suite 100 Media, Pennsylvania 19063

 Delaware County Chester Waterfront Industrial Development Authority 100 West 6th Street, Suite 100 Media, Pennsylvania 19063

Basic Financial Statements

County of Delaware, Pennsylvania Statement of Net Position December 31, 2014

Primary Government Governmental Business-Type Component Activities Activity Total Units

Assets Cash and cash equivalents $ 82,282,208 $ 3,634,607 $ 85,916,815 $ 14,670,331 Receivables (net of allowance for uncollectibles): Taxes 9,721,773 - 9,721,773 - Accounts 2,601,474 15,968,614 18,570,088 4,840,151 Grants 32,245,371 - 32,245,371 - Notes 5,639,008 - 5,639,008 184,062 Other 6,579,975 - 6,579,975 501,202 Due from component units 7,475,000 - 7,475,000 - Internal balances (6,221,597) 6,221,597 - - Inventories - - - 128,178 Other assets 5,069,860 10,404 5,080,264 1,506,652 Investments - - - 8,028,805 Restricted cash and cash equivalents 33,303,579 804,882 34,108,461 5,299,931 Investment in joint venture 182,246,603 - 182,246,603 - Capital assets (net of accumulated depreciation): Land 5,658,759 - 5,658,759 8,873,485 Land improvements 4,916,281 - 4,916,281 3,549,330 Construction in progress 8,799,084 - 8,799,084 1,639,255 Buildings and improvements 121,205,013 8,717,628 129,922,641 52,711,891 Equipment 24,475,443 2,479,043 26,954,486 759,250 Infrastructure 4,654,975 - 4,654,975 -

Total assets $ 530,652,809 $ 37,836,775 $ 568,489,584 $ 102,692,523

Liabilities Accounts payable and other current liabilities $ 32,883,814 $ 3,970,174 $ 36,853,988 $ 5,571,181 Accrued interest payable 1,746,692 - 1,746,692 - Other liabilities 23,532,573 - 23,532,573 - Due to primary government - - - 7,475,000 Unearned revenue 39,985,217 2,075,550 42,060,767 118,923 Liabilities payable from restricted assets 122,489 - 122,489 - Long-term liabilities: Due within one year: Bonds and notes payable 15,286,773 2,231,227 17,518,000 957,000 Claims payable 4,617,147 - 4,617,147 - Early retirement incentives 451,724 - 451,724 - Other post-employment obligation 12,000,000 - 12,000,000 - Due in more than one year: Bonds and notes payable 278,329,126 29,559,824 307,888,950 10,448,000 Claims payable 756,185 - 756,185 - Early retirement incentives 570,200 - 570,200 - Other post-employment obligation 126,668,000 - 126,668,000 - Accrued closure costs - - - 14,270,911

Total liabilities 536,949,940 37,836,775 574,786,715 38,841,015

Net Position Net investment in capital assets (60,035,609) (20,594,380) (80,629,989) 56,128,211 Restricted for: Highways and streets 1,430,456 - 1,430,456 - Infrastructure 38,358 - 38,358 - Library 609,672 - 609,672 - Community development 3,961,639 - 3,961,639 - Title IV D program 426,047 - 426,047 - Economic development - - - 426,638 Solid waste - - - 5,000,000 Unrestricted 47,272,306 20,594,380 67,866,686 2,296,659

Total net position (6,297,131) - (6,297,131) 63,851,508

Total liabilities and net position $ 530,652,809 $ 37,836,775 $ 568,489,584 $ 102,692,523

See notes to financial statements 32 County of Delaware, Pennsylvania Statement of Activities Year Ended December 31, 2014

Program Revenues Charges Operating Capital for Grants and Grants and Expenses Services Contributions Contributions

Functions/Programs Primary government: Governmental activities: General government $ 141,161,340 $ 8,916,675 $ 46,246,136 $ - Judicial 47,072,546 5,137,583 22,130,838 - Corrections 71,432,033 11,696,677 816,834 - Health and human services 251,336,280 - 244,913,281 - Highways, streets and bridges 2,187,625 - 1,757,397 81,308 Interest on long-term debt 8,123,155 - - -

Total governmental activities 521,312,979 25,750,935 315,864,486 81,308

Business-type activity, Geriatric Center 77,855,996 75,783,231 - -

Total primary government $ 599,168,975 $ 101,534,166 $ 315,864,486 $ 81,308

Component Units Solid Waste Authority $ 38,550,456 $ 34,822,563 $ 171,038 $ - Economic Development 697,539 97,813 547,838 - Industrial Development Authority 978,834 - - - Redevelopment Authority 11,657,654 2,000 11,370,185 -

Total component units $ 51,884,483 $ 34,922,376 $ 12,089,061 $ -

General Revenues Property taxes Gaming revenue Grants and charges no restricted to specific programs Unrestricted investment earnings Transfers Total general revenues and transfers Change in net position Net Position, Beginning Net Position, Ending

See notes to financial statements 33 Net (Expense) Revenue and Changes in Net Position

Governmental Business-Type Component Activities Activity Total Units

$ (85,998,529) $ - $ (85,998,529) (19,804,125) - (19,804,125) (58,918,522) - (58,918,522) (6,422,999) - (6,422,999) (348,920) - (348,920) (8,123,155) - (8,123,155)

(179,616,250) - (179,616,250)

- (2,072,765) (2,072,765)

(179,616,250) (2,072,765) (181,689,015)

$ (3,556,855) (51,888) (978,834) (285,469)

(4,873,046)

172,842,088 - 172,842,088 - 8,604,779 - 8,604,779 - 494,046 - 494,046 - 2,356,693 431 2,357,124 29,096 (2,072,334) 2,072,334 - - 182,225,272 2,072,765 184,298,037 29,096 2,609,022 - 2,609,022 (4,843,950) (8,906,153) - (8,906,153) 68,695,458 $ (6,297,131) $ - $ (6,297,131) $ 63,851,508

See notes to financial statements 34 County of Delaware, Pennsylvania Balance Sheet Governmental Funds December 31, 2014

Other Total Capital Health & Human Governmental Governmental General Projects Service Funds Funds

Assets Cash and cash equivalents $ 58,547,341 $ 1,371,704 $ 12,762,946 $ 5,625,020 $ 78,307,011 Receivables: Taxes 10,664,682 - - - 10,664,682 Accounts 2,601,474 - - - 2,601,474 Grants 4,896,563 - 24,039,363 3,309,445 32,245,371 Notes - - - 5,639,008 5,639,008 Other 132,910 - - - 132,910 Due from component units 2,000,000 5,475,000 - - 7,475,000 Due from other funds 22,453,923 - 18,492,767 8,441,163 49,387,853 Other restricted assets 2,336,493 21,974,725 5,197,494 3,794,867 33,303,579 Other assets 1,144,114 - 1,944,666 67,646 3,156,426

Total assets $ 104,777,500 $ 28,821,429 $ 62,437,236 $ 26,877,149 $ 222,913,314

Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Vouchers and accounts payable $ 10,970,640 $ 690,638 $ 15,840,002 $ 5,382,534 $ 32,883,814 Payroll payable 3,621,386 - - - 3,621,386 Payable from restricted assets 122,489 - - - 122,489 Due to other funds 26,224,826 13,957,325 11,726,217 3,185,783 55,094,151 Unearned revenues 2,513,661 - 26,105,596 11,365,960 39,985,217 Other liabilities 10,694,743 - 8,765,421 902,747 20,362,911

Total liabilities 54,147,745 14,647,963 62,437,236 20,837,024 152,069,968

Deferred Inflows of Resources, Unavailable revenues - taxes 8,822,903 - - - 8,822,903

Fund Balances: Nonspendable: Prepaid items 1,144,114 - - - 1,144,114 Long term receivable - 5,475,000 - - 5,475,000 Restricted for: Highways and streets - - - 1,430,456 1,430,456 Infrastructure 38,358 38,358 Library - - - 609,672 609,672 Community development - - - 3,961,639 3,961,639 Title IV D program 426,047 - - - 426,047 Capital projects - 8,274,442 - - 8,274,442 Assigned to: Capital projects - 424,024 - - 424,024 County geriatric center 12,000,000 - - - 12,000,000 Employee healthcare costs 12,000,000 - - - 12,000,000 Unassigned 16,236,691 - - - 16,236,691

Total fund balances 41,806,852 14,173,466 - 6,040,125 62,020,443

Total liabilities, deferred inflows of resources and fund balances $ 104,777,500 $ 28,821,429 $ 62,437,236 $ 26,877,149

Amounts reported for governmental activities in the statement of . net position are different because: Capital assets, including investment in joint venture, used in governmental activities are not financial resources and, therefore, are not reported in the funds 351,956,158 Property taxes receivable will be collected in the future, but are not available to pay for the current period's expenditures and therefore are not recognized as revenue on the governmental fund financial statements 8,822,903 Long-term notes receivable will be collected in the future but are not available to pay for the current periods's expenditures and therefore are not recognized as revenue on the governmental fund financial statements 6,447,065 Establishment of an allowance for doubtful accounts, net of additional penalty and interest receivable on the statement of net position (942,909) Accrued interest payable included on the statement of net position (1,746,692) Long-term liabilities, are not due and payable in the current period and therefore are not reported in the funds Bonds and notes payable (293,615,899) Early retirement incentives (570,200) Other post-employment obligation (138,668,000)

Net position of governmental activities $ (6,297,131)

See notes to financial statements 35 County of Delaware, Pennsylvania Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended December 31, 2014

Other Total Capital Health & Human Governmental Governmental General Projects Service Funds Funds

Revenues Real estate taxes $ 171,551,067 $ - $ - $ - $ 171,551,067 Gaming revenue 8,604,779 - - - 8,604,779 Licenses and permits 17,415 - - - 17,415 General grants 24,333,691 81,308 - 45,211,189 69,626,188 Charges for services, fines and forfeits 21,915,998 - - - 21,915,998 Investment earnings 989,914 272,821 - - 1,262,735 Health and human service grants - - 244,913,281 - 244,913,281 Other 9,932,293 - - - 9,932,293

Total revenues 237,345,157 354,129 244,913,281 45,211,189 527,823,756

Expenditures Current: General government 23,146,549 - - - 23,146,549 Judicial 50,873,015 - - - 50,873,015 Corrections 64,184,935 - - - 64,184,935 Transportation 6,921,000 - - - 6,921,000 Health and human services - - 251,336,280 - 251,336,280 Highways, streets and bridges - - - 1,555,907 1,555,907 Other 47,150,666 - - 49,916,007 97,066,673 Debt service: Principal 16,861,294 38,515,528 - - 55,376,822 Interest 7,446,237 798,961 - - 8,245,198 Debt issuance costs - 210,529 - - 210,529 Capital outlay - 10,801,510 - - 10,801,510

Total expenditures 216,583,696 50,326,528 251,336,280 51,471,914 569,718,418

Excess of Revenues Over (Under) Expenditures 20,761,461 (49,972,399) (6,422,999) (6,260,725) (41,894,662)

Other Financing Sources (Uses) Issuance of refunding note payable - 38,726,057 - - 38,726,057 Transfers in 1,060,000 - 13,011,484 7,103,496 21,174,980 Transfers out (15,598,829) - (6,588,485) (1,060,000) (23,247,314)

Total other financing sources (uses) (14,538,829) 38,726,057 6,422,999 6,043,496 36,653,723

Net Change in Fund Balances 6,222,632 (11,246,342) - (217,229) (5,240,939)

Fund Balance, Beginning 35,584,220 25,419,808 - 6,257,354 67,261,382

Fund Balance, Ending $ 41,806,852 $ 14,173,466 $ - $ 6,040,125 $ 62,020,443

See notes to financial statements 36 County of Delaware, Pennsylvania Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended December 31, 2014

Amounts reported for governmental activities in the statement of activities (pages 33-34) are different because:

Net change in fund balances - total governmental funds (page 36) $ (5,240,939)

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period

Purchase of capital assets $ 9,753,647 Depreciation expense (9,207,538) 546,109 Governmental funds report the County's budget contribution to SEPTA as expenditures. However, in the statement of activities the cost is capitalized as an investment in a joint venture (See Note 25) 7,292,218

Revenues related to real estate taxes in the statement of activities that do not provide current financial resources are not reported as revenues in the funds 1,305,275

Collections on long-term receivable due from the City of Chester is reported as revenue in the funds, while the collection reduces long-term receivables in the statement of net position (138,687)

The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transactions, however, has any effect on net position. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Reconciling items related to long-term debt activity for the year ended December 31, 2014 are as follows:

Issuance of refunding note payable (38,726,057) Payments to refund notes payable 38,515,528 Scheduled principal payments on long-term debt made in 2014 16,861,294 Allocation of debt to business type activity for capital assets 1,281,967 Accretion of bond and note premiums 837,421

18,770,153

Accrued interest expense on long-term debt is reported in the statement of activities but does not require the use of current financial resources. Therefore, accrued interest expense is not reported as expenditures in governmental funds. The net change in interest payable is recorded in the statement of activities. 122,043

OPEB expense in the statement of activities that do not consume current financial resources are not reported as expenses in the funds (19,827,000)

Payments related to early retirement expense is reported as expenditures in the funds, while the payment reduces long-term liabilities in the statement of net position (177,951)

An allowance for doubtful collections of real estate taxes receivable is reported on the statement of net position, net of additional penalty and interest on delinquent taxes (42,199)

Change in net position of governmental activities (pages 33-34) $ 2,609,022

See notes to financial statements 37 County of Delaware, Pennsylvania Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Comparison - General Fund Year Ended December 31, 2014

Variance with General Fund Final Budget - Actual Positive Original Final Amounts (Negative)

Revenues Real estate taxes $ 166,986,000 $ 166,986,000 $ 171,551,067 $ 4,565,067 Gaming revenue 10,000,000 10,000,000 8,604,779 (1,395,221) Licenses and permits 37,000 37,000 17,415 (19,585) General grants 28,388,000 28,388,000 24,333,691 (4,054,309) Charges for services, fines and forfeits 23,862,000 23,862,000 21,915,998 (1,946,002) Investment earnings 800,000 800,000 989,914 189,914 Other 8,410,000 8,410,000 9,932,293 1,522,293

Total revenues 238,483,000 238,483,000 237,345,157 (1,137,843)

Expenditures Current: General government 24,948,000 25,181,279 23,146,549 2,034,730 Judicial 57,153,000 57,153,000 50,873,015 6,279,985 Corrections 64,653,000 65,210,494 64,184,935 1,025,559 Transportation 6,921,000 6,921,000 6,921,000 - Other 53,466,000 50,196,227 47,150,666 3,045,561 Debt service: Principal 19,440,000 16,865,000 16,861,294 3,706 Interest 9,371,000 7,450,000 7,446,237 3,763

Total debt service 28,811,000 24,315,000 24,307,531 7,469

Total expenditures 235,952,000 228,977,000 216,583,696 12,393,304

Excess of Revenues Over Expenditures 2,531,000 9,506,000 20,761,461 11,255,461

Other Financing Sources (Uses) Transfers in 5,259,000 1,000,000 1,060,000 60,000 Transfers out (13,558,000) (16,274,000) (15,598,829) 675,171

Total other financing sources (uses), net (8,299,000) (15,274,000) (14,538,829) 735,171

Net Change in Fund Balance 6,222,632 6,222,632

Fund Balance, Beginning 35,584,220 35,584,220

Fund Balance, Ending $ - $ - $ 41,806,852 $ 41,806,852

See notes to financial statements 38 County of Delaware, Pennsylvania Statement of Net Position Proprietary Funds December 31, 2014

Governmental Business-Type Activities- Activity Internal Geriatric Service Care Fund

Assets Current assets: Cash and cash equivalents $ 3,634,607 $ 3,975,197 Accounts receivable, net 15,968,614 - Due from other funds 6,221,597 4,145,933 Other restricted assets 804,882 - Prepaid expense and other assets 10,404 1,913,434

Total current assets 26,640,104 10,034,564

Noncurrent assets: Capital assets: Buildings and improvements 52,035,605 - Equipment 37,261,885 -

Total capital assets 89,297,490 -

Less accumulated depreciation (78,100,819) -

Total noncurrent assets 11,196,671 -

Total assets $ 37,836,775 $ 10,034,564

Liabilities Current liabilities: Vouchers and accounts payable $ 3,970,174 $ - Unearned revenue 2,075,550 - Due to other funds - 4,661,232 Claims payable - 4,617,147 General obligation bonds and notes - current 2,231,227 -

Total current liabilities 8,276,951 9,278,379

Noncurrent liabilities: General obligation bonds and notes payable 29,559,824 - Claims payable - 756,185

Total noncurrent liabilities 29,559,824 756,185

Total liabilities 37,836,775 10,034,564

Net Position Net investment in capital assets (20,594,380) - Unrestricted 20,594,380 -

Total net position - -

Total liabilities and net position $ 37,836,775 $ 10,034,564

See notes to financial statements 39 County of Delaware, Pennsylvania Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds Year Ended December 31, 2014

Governmental Business-Type Activities- Activity Internal Geriatric Service Care Fund

Operating Revenues Charges for services $ 75,783,231 $ 46,443,382

Operating Expenses Administration 13,097,283 150,219 Operation, maintenance, and housekeeping 10,648,126 - Nursing 22,254,886 - Dietary 7,277,348 - Medical and physical therapy 4,642,276 - Employee benefits 16,311,830 - Insurance claims - 46,293,550 Depreciation 1,967,365 -

Total operating expenses 76,199,114 46,443,769

Operating Loss (415,883) (387)

Nonoperating Revenues (Expenses) Investment earnings 431 387 Miscellaneous (expenses) revenues (27,123) - Interest expense (1,629,759) -

Total nonoperating (expenses) revenues (1,656,451) 387

Transfers in 2,072,334 -

Change in Net Position - -

Net Position, Beginning - -

Net Position, Ending $ - $ -

See notes to financial statements 40 County of Delaware, Pennsylvania Statement of Cash Flows Proprietary Funds Year Ended December 31, 2014

Governmental Business-Type Activities- Activity Internal Geriatric Service Care Fund

Cash Flows from Operating Activities Receipts from customers and users $ 78,291,546 $ 49,919,611 Payments to suppliers (33,898,957) (49,474,698) Payments to employees for services (40,276,221) -

Net cash provided by operating activities 4,116,368 444,913

Cash Flows from Noncapital Financing Activities Transfer from other fund 9,647 -

Cash Flows from Capital and Related Financing Activities Proceeds from issuance of refunding notes payable 6,439,943 - Payments to refund notes payable (6,421,472) - Principal paid on capital debt (2,604,706) - Proceeds of debt for purchase of capital assets 1,281,967 - Interest paid on capital debt (1,629,759) - Acquisitions of capital assets (1,281,967) -

Net cash used in capital and related financing activities (4,215,994) -

Cash Flows Provided by Investing Activities Interest received 431 387

Net (Decrease) Increase in Cash and Cash Equivalents (89,548) 445,300

Cash and Cash Equivalents, Beginning 3,724,155 3,529,897

Cash and Cash Equivalents, Ending $ 3,634,607 $ 3,975,197

Reconciliation of Operating Loss to Net Cash Provided by Operating Activities Operating loss $ (415,883) $ (387) Adjustments to reconcile operating loss to net cash provided by operating activities: Depreciation 1,967,365 - Decrease in accounts receivable 2,584,228 - Decrease (increase) in prepaid expense and other assets 7,081 (190,110) Increase in due to other funds - 3,476,229 Increase in restricted assets (8,621) - Increase in vouchers and accounts payable 58,111 - Decrease in unearned revenue (75,913) - Decrease in claims payable - (2,840,819)

Total adjustments 4,532,251 445,300

Net Cash Provided by Operating Activities $ 4,116,368 $ 444,913

See notes to financial statements 41 County of Delaware, Pennsylvania Statement of Fiduciary Net Position Fiduciary Funds Year Ended December 31, 2014

Deshong Pension Private-Purpose Trust Trust Fund Fund

Assets Cash and cash equivalents $ 10,587,092 $ 100,828 Interest receivable 754,070 - Investments, at fair value: U.S. government securities 49,036,895 - Corporate bonds 37,344,840 - Common and preferred stocks and stock funds 333,682,153 - Guaranteed investment contracts 27,880,576 - Other fixed income securities 4,617,064 -

Total investments 452,561,528 -

Total assets 463,902,690 100,828

Liabilities Accounts payable and other liabilities 526,365 1,084

Net Position Net position restricted for pensions and other $ 463,376,325 $ 99,744

See notes to financial statements 42 County of Delaware, Pennsylvania Statement of Changes in Fiduciary Net Position Fiduciary Funds Year Ended December 31, 2014

Deshong Pension Private-Purpose Trust Trust Fund Fund

Additions Contributions: Plan members $ 10,929,265 $ - County 4,159,063 -

Total contributions 15,088,328 -

Investment earnings: Interest and dividends 9,670,727 17 Net appreciation in fair value of investments 17,250,883 - Less investment expense (1,220,493) -

Net investment income 25,701,117 17

Total additions 40,789,445 17

Deductions Death benefits 1,081,980 - Refunds of contributions 2,368,365 - Administrative expenses 48,804 167,282 Retirement allowance 21,816,047 -

Total deductions 25,315,196 167,282

Net Increase (Decrease) in Net Position 15,474,249 (167,265)

Net Position, Restricted for Pensions and Other, Beginning 447,902,076 267,009

Net Position, Restricted for Pensions and Other, Ending $ 463,376,325 $ 99,744

See notes to financial statements 43 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

1. Summary of Significant Accounting Policies

The accounting methods and procedures adopted by the County of Delaware, Pennsylvania (the “County”), conform to accounting principles generally accepted in the United States of America as applied to governmental entities. The following notes to the financial statements are an integral part of the County’s financial statements.

Financial Reporting Entity

The County was established under the laws of the Commonwealth of Pennsylvania in 1789 and operates under a Home Rule Charter form of government. As required by accounting principles generally accepted in the United States of America, the financial statements of the reporting entity include those of the County (the primary government) and its component units. The component units, discussed in Note 2, are included in the County’s reporting entity as discretely presented component units. Component units are legally separate organizations with which the County has a significant operational or financial relationship.

Government-Wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. The effect of interfund activity has been removed from these statements except for interfund services provided and used which are not eliminated in the process of consolidation. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The expenses reported for functional activities include allocated indirect expenses. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items properly not included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

44 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the County considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due.

Property taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the County.

The County reports the following major governmental funds:

The General Fund is the County’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

Capital Projects Fund are used to account for financial resources received and used for the acquisition, construction, or improvement of capital facilities other than those financed by other funds.

The Health and Human Service Fund accounts for operations and administration of various County health and human service programs. Financing is provided by state and federal grants with an appropriation from the County General Fund.

The County reports two proprietary funds:

The Enterprise Fund is maintained to account for the operations of the County’s Geriatric Center, which is intended to be self-supporting. The nature of the County’s Enterprise Fund is such that the determination of net income on a periodic basis is an important consideration and, as such, all operating expenses, including depreciation, are recorded.

The Internal Service Fund is maintained to account for the operations of the County’s Health, Casualty/Liability and Workers’ Compensation Self-Insurance Programs.

45 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

The County’s Fiduciary Fund accounts for the Pension Trust Fund and the Deshong Trust Fund.

The Pension Trust Fund is maintained to account for assets held by the County in a trustee capacity for individuals currently or previously employed by the County. The County’s Pension Trust Fund reports using the economic resources measurement focus.

Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to the plan are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan.

The Deshong Trust Fund is maintained to account for the assets held by the County in a trustee capacity obtained through the distribution of the Deshong estate. The Deshong Trust Fund is a private purpose trust fund since the principal can be expended.

Amounts reported as program revenues include charges to customers or applicants for goods, services, or privileges provided and operating grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise fund are charges to patients for services. Operating expenses for the enterprise fund include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the County’s policy to use restricted resources first, then unrestricted resources as they are needed.

Budgetary Accounting Control

In accordance with the County’s Home Rule Charter and Administrative Code, the County prepares and adopts a budget at least ten days prior to December 31 for the subsequent calendar year. Expenditures cannot legally exceed budgeted appropriations at the fund level. Additionally, management may not revise the total budget amounts by fund level without the approval of County Council. Although not legally obligated to do so, for management control purposes, County Council reviews and approves interdepartmental budget transfers. Budgetary transfers and/or additional appropriations from additional revenues received or from unexpended funds appropriated, but not spent in prior years, must be approved by County Council. All appropriations lapse at the end of the year.

Budgets are prepared on a modified accrual basis and are adopted for the General Fund and the Liquid Fuels Nonmajor Special Revenue Fund.

Cash Equivalents

For purposes of the statement of cash flows, the County considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash restricted for closure costs are not considered cash equivalents. 46 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Investments

Investments of the Pension Trust Fund are stated at fair value for both reporting and actuarial purposes. Investment purchases are recorded as of the trade date. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Investments that do not have an established market are generally reported at cost, which is not expected to be materially different from fair value. The calculation of realized gains and losses is independent of the calculation of the net change in the fair value of pension plan investments. Realized gains and losses on investments that had been held in more than one reporting period and sold in the current period were included as a change in the fair value reported in the prior period(s) and the current period.

Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of interfund loans).

All trade and property tax receivables are shown net of an allowance for uncollectibles. The property tax receivable allowance is calculated based on collection history and was $942,909 at December 31, 2014.

Interfund Transactions

As a result of its operations, the County affects a variety of transactions between funds to finance operations. Accordingly, to the extent that certain interfund transactions have not been paid or received as of December 31, 2014, appropriate interfund receivables or payables have been established.

Restricted Assets

Restricted assets represent resources deposited in financial institutions for liquidation of specific obligations.

Capital Assets

All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets are valued at their estimated fair value on the date donated.

General infrastructure assets acquired prior to December 31, 2001 consist of bridges and are reported at estimated historical cost using deflated replacement cost. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized.

47 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Capital outlay greater than $5,000 are capitalized and depreciated. Capital assets are depreciated using the straight-line method over the following estimated useful lives:

Estimated Useful Lives

Infrastructure 100 years Land improvements 20 years Buildings and improvements 45 years Equipment 5 - 20 years

Compensated Absences

County employees are granted vacation and sick leave in varying amounts based on their length of employment. Vacation leave is earned by employees on a monthly basis each year. All vacation leave earned must be used by February 15, following the year earned. Sick leave is earned by employees on a monthly basis and may be accumulated up to a maximum of 180 days. In the event of termination, an employee is compensated for all earned and unused vacation leave. Employees are not compensated for earned and unused sick leave.

Unearned Revenue

Unearned revenues arise when assets are recognized before revenue recognition criteria have been satisfied.

Grants and entitlements received before the eligibility requirements are met, and delinquent property taxes due at December 31, 2014, are recorded as unearned revenue on the governmental fund financial statements.

Deferred Outflows/Inflows of Resources

In addition to assets, the County will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until then. The County does not have any items that qualify for reporting this category.

In addition to liabilities, the County will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The County has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes which are deferred and recognized as an inflow of resources in the period that the amounts become available.

48 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Long-Term Obligations

In the government-wide financial statements, long-term obligations are reported as liabilities in the governmental activities statement of net position, where applicable, bond and note premiums and discounts, are deferred and amortized over the life of the bonds and notes using the effective interest method.

In the fund financial statements, governmental fund types recognize bond and note premiums and discounts, as well as bond and note issuance costs as expense, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Fund Balances

Governmental fund balance classifications are hierarchical and are based primarily on the extent to which the County is bound to honor constraints on the specific purposes for which amounts in the funds may be spent. The County’s accounting and finance policies are used to interpret the nature and/or requirements of the funds and their corresponding assignment of restricted, committed, assigned, or unassigned.

The County reports the following classifications for governmental fund balances:

Nonspendable Fund Balance - Nonspendable fund balances are amounts that cannot be spent because they are either (a) not in spendable form, such as inventory or prepaid expenses or (b) legally or contractually required to be maintained intact, such as a trust that must be retained in perpetuity. Specifically included in this category are prepaid expenses and long-term receivables.

Restricted Fund Balance - Restricted fund balances are restricted when constraints placed on the use of resources are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation. Specifically included in this category are amounts restricted for highways and streets, infrastructure, library, community development, the Title IV D program and capital projects.

Committed Fund Balance - Committed fund balances are amounts that can only be used for specific purposes as a result of constraints imposed by County Council by passing a resolution. Committed amounts cannot be used for any other purpose unless County Council removes those constraints by taking the same action. There are no fund balances meeting this category definition.

Assigned Fund Balance - Assigned fund balances are amounts that are constrained by the County’s intent to be used for specific purposes, but are neither restricted nor committed. Intent is expressed by County Council or official to which County Council has delegated the authority to assign fund balances. County Council has delegated this authority to the Executive Director of the County as approved by the County fund balance policy. Specifically included in this category are amounts assigned for capital projects, the county geriatric center, and increases employee healthcare costs.

49 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Assigned fund balance includes (a) all remaining amounts that are reported in governmental funds (other than the General Fund) that are not classified as nonspendable, restricted, or committed, and (b) amounts in the General Fund that are intended to be used for specific purpose. Specific amounts that are not restricted or committed in a special revenue or capital projects fund, are assigned for purposes in accordance with the nature of their fund type. Assignment within the General Fund conveys that the intended use of those amounts is for a specific purpose that is narrower than the general purposes of the County itself.

Unassigned Fund Balance - Unassigned fund balance is the residual classification for the General Fund. This classification represents General Fund balance that has not been assigned to other funds, and that has not been restricted, committed, or assigned to specific purposes within the General Fund.

In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is depleted in the order of restricted, committed, assigned, and unassigned.

Net Position

In the government-wide financial statements, net position is classified in the following categories.

Net Investment in Capital Assets - This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt attributable to the acquisition, construction, or improvement of the assets.

Restricted Net Position - This amount is restricted by external creditors, grantors, contributors, laws or regulations or other governments, enabling legislation.

Unrestricted Net Position - This amount is all net position amounts that do not meet the definition of invested in capital assets, net of related debt or restricted net position.

The County applies restricted resources first when an expense is incurred for purposes for which both restricted and unrestricted net position is available.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

50 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Accounting Standards Update

In June 2012, the GASB issued Statement No. 67 - Financial Reporting for Pension Plans - an amendment of GASB Statement No. 25. This statement establishes accounting and financial reporting standards for the activities of pension plans that are administered through trusts and meet certain criteria. This statement replaces the requirements of Statements No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans, and No. 50, Pension Disclosures, as they relate to pension plans that are administered through trusts or equivalent arrangements that meet certain requirements. The effect of this adoption expanded pension fund note disclosures and the related required supplementary information tables.

In January 2013, the GASB issued Statement No. 69, Government Combinations and Disposals of Government Operations. This statement establishes accounting and financial reporting standards related to government combinations and disposals of government operations. The adoption of this standard did not have an impact on the County’s December 31, 2014 financial statements.

On April 2013, the GASB issued Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees. This statement requires a government that extends a nonexchange financial guarantee to recognize a liability when qualitative factors and historical data, if any, indicate that it is more likely than not that the government will be required to make a payment on the guarantee. The adoption of this standard did not have a material impact on the County’s December 31, 2014 financial statements.

2. Reporting Entity

The County has determined that the Delaware County Solid Waste Authority (“DCSWA”), the Economic Development Oversight Board (“EDOB”), the Redevelopment Authority of the County of Delaware (“RDA”) and the Delaware County Chester Waterfront Industrial Development Authority (“IDA”) are separate legal entities for which the County has oversight responsibility and should be included in the County’s financial statements as aggregate discretely presented component units. A component unit is a legally separate organization with which the primary government has a significant operational or financial relationship.

Discretely Presented Component Units

The Delaware County Solid Waste Authority, an entity legally separate from the County, is governed by a board appointed by County Council and County Council has the ability to impose its will on the DCSWA. Additionally, a member of County Council sits on the board of the DCSWA and the DCSWA is financially dependent on the County. Its purpose is to provide waste disposal almost entirely for citizens of the County.

The Economic Development Oversight Board, an entity legally separate from the County, is governed by a board appointed by County Council. County Council has the ability to impose its will and is financially responsible for the EDOB. Its purpose is to encourage economic development in Delaware County by facilitating the retention of existing business, the formation of new business and the vitality of all business within the County of Delaware.

51 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

The Redevelopment Authority of the County of Delaware, an entity legally separate from the County, is governed by a board appointed by County Council. County Council has the ability to impose its will on the RDA. The RDA was created by the County for the delivery of services to County residents, pursuant to the Urban Redevelopment Law, Act of 1945. The RDA acts as the vehicle for condemnation and development within the County.

The Delaware County Chester Waterfront Industrial Development Authority, an entity legally separate from the County, is governed by a board whose voting majority is appointed by County Council. County Council has the ability to impose its will and is financially responsible for the IDA. The IDA is an industrial development authority incorporated in the Commonwealth of Pennsylvania on July 3, 2008. IDA was formed pursuant to the Economic Development Financing Law (73 P.S. Section 371) for the purpose of acquiring, constructing, financing, improving and maintaining industrial and commercial development projects and public facilities in certain geographic regions within the City of Chester.

Complete financial statements for the individual component units can be obtained from their respective administrative offices as follows:

 Delaware County Solid Waste Authority Rose Tree Park Hunt Club 1521 North Providence Road Media, Pennsylvania 19063  Economic Development Oversight Board 100 West 6th Street, Suite 100 Media, Pennsylvania 19063  Redevelopment Authority of the County of Delaware 100 West 6th Street, Suite 100 Media, Pennsylvania 19063  Delaware County Chester Waterfront Industrial Development Authority 100 West 6th Street, Suite 100 Media, Pennsylvania 19063

52 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

The following presents the condensed financial statements for each of the discretely presented component units.

Condensed Statement of Net Position December 31, 2014 Economic Waterfront Development Redevelop- Industrial Oversight Solid Waste ment Development Board Authority Authority Authority Totals

Assets: Current assets $ 923,186 $ 16,419,064 $ 4,426,846 $ 61,480 $ 21,830,576 Long-term assets 299,931 13,028,805 - - 13,328,736 Capital assets, net - 41,188,894 1,024,199 25,320,118 67,533,211

Total $ 1,223,117 $ 70,636,763 $ 5,451,045 $ 25,381,598 $ 102,692,523

Liabilities: Current liabilities $ 87,422 $ 5,393,299 $ 209,383 $ - $ 5,690,104 Long-term liabilities - 25,675,911 - - 25,675,911 Due to primary government - 7,475,000 - - 7,475,000

Total liabilities 87,422 38,544,210 209,383 - 38,841,015

Net position: Net investment in capital assets - 29,783,894 1,024,199 25,320,118 56,128,211 Restricted 426,638 5,000,000 - - 5,426,638 Unrestricted 709,057 (2,691,341) 4,217,463 61,480 2,296,659

Total net position 1,135,695 32,092,553 5,241,662 25,381,598 63,851,508

Total $ 1,223,117 $ 70,636,763 $ 5,451,045 $ 25,381,598 $ 102,692,523

53 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Condensed Statement of Activities For the Year Ended December 31, 2014 Economic Waterfront Development Redevelop- Industrial Oversight Solid Waste ment Development Board Authority Authority Authority Totals

Program revenues: Charges for services $ 97,813 $ 34,822,563 $ 2,000 $ - $ 34,922,376 Operating grants and contributions 547,838 171,038 11,370,185 - 12,089,061

Total 645,651 34,993,601 11,372,185 - 47,011,437

Expenses: Operating expenses 697,539 34,496,049 11,657,654 - 46,851,242 Depreciation and depletion - 4,054,407 - 978,834 5,033,241

Total 697,539 38,550,456 11,657,654 978,834 51,884,483

Net expense ($51,888) ($3,556,855) ($285,469) ($978,834) (4,873,046)

General revenues 5,825 22,999 265 7 29,096

Change in net position (46,063) (3,533,856) (285,204) (978,827) (4,843,950)

Net position, beginning 1,181,758 35,626,409 5,526,866 26,360,425 68,695,458

Net position, ending $ 1,135,695 $ 32,092,553 $ 5,241,662 $ 25,381,598 $ 63,851,508

Related Organizations

The following organizations are considered to be related organizations of the County because of their relationship and mutual interest. Although the County appoints a voting majority of the organizations’ governing boards in most instances, the County has determined that these organizations are not component units. These related organizations are as follows:

 Delaware County Housing Authority  Delaware County Housing Development Corporation  Delaware County Regional Water Quality Control Authority  Delaware County Industrial Development Authority  Community Transit of Delaware County, Inc.  Community Action Agency of Delaware County  Delaware County Authority  Delaware Valley Regional Finance Authority (“DVRFA”)

54 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

3. Component Units - Summary of Significant Accounting Policies

Solid Waste Authority

Basis of Accounting

The management focus is on the flow of economic resources and the accrual basis of accounting, whereby, revenues are recognized when earned and expenses are recorded when incurred.

Landfill Site/Depletion

The estimated value of the landfill at acquisition and additional purchases for expanding capacity is being depleted over the projected life of the landfill. Depletion is charged annually against income in a manner consistent with the physical usage of the site based upon the site’s estimated capacity. The estimated remaining landfill life is approximately sixteen years.

Closure and Post Closure Costs

The capacity of the landfill is 22,289,000 cubic yards. 15,355,425 cubic yards of capacity has been utilized through December 31, 2014. Approximately 69% of existing landfill capacity has been utilized to date. Depletion charge for the year ended December 31, 2014 was $346,338.

Municipal landfill owners and operators are required to incur costs to provide for protection of the environment both during the period of the landfill operation and during the post closure period. These costs are estimated annually and current cost is adjusted for changes in landfill capacity, operating conditions and increases or decreases in estimated costs. Closure and post closure costs include equipment installed and facilities constructed near or after the date of acceptance of solid waste, cost of the final capping, and the cost of monitoring and maintaining the area during the post closure period. The DCSWA has established an account to accumulate the anticipated cost of closure and post closure based on usage of the landfill. An amount is charged annually to operations to recognize the current cost and resultant liability based on landfill capacity used to date. The estimate of closure and post closure costs were determined taking into account capping, revegitation, maintenance, leachate treatment, water quality monitoring, and gas control. In determining the closure and post closure costs, an inflation rate was utilized at the rate of 3.396%, plus administrative fees of 10% and $1,228,816 contingency charge that would anticipate covering unexpected changes in technology, inflation, or applicable laws and regulations.

Pursuant to the Municipal Waste Planning, Recycling, and Waste Reduction Act of the Commonwealth of Pennsylvania, Act No. 101 of July 28, 1988, P.L. 556, DCSWA is required to pay to a trust, on a quarterly basis, $0.25 per ton of weighed waste to be used for remedial measures and emergency actions necessary to prevent or abate adverse effects on the environment subsequent to landfill closure. Any funds remaining in the trust subsequent to the final closure are divided between the host county and host municipality.

55 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

The DEP raised the bonding requirement to the amount of $20,714,788 which was met and is being maintained. DCSWA met the total bonding requirement with cash on hand and a letter of credit in the amount of $3,410,000. In 2014 the DEP released restricted assets and the letter of credit in exchange for DCSWA obtaining a surety bond amounting to $20,390,083 for post closure costs. Terms of the surety bond require DCSWA to deposit $5,000,000 in cash collateral to be held in an interest bearing account by the Surety Company. As of December 31, 2014 the letter of credit was still in place.

Accrued closure and post closure costs, as reflected on the statement of net position, are $14,270,911 and $1,158,212 was charged against income in 2014. The estimated closure and post closure costs total $20,714,788, comprised of $4,869,201 of closure costs and $15,845,587 of post closure costs. At December 31, 2014, there remains $6,443,877 in closure and post closure costs to be recognized in excess of the Act 101 requirements previously mentioned.

Inventory

The DCSWA maintains an inventory of purchased goods used in construction and capping activities which are stated at cost.

Restricted Net Position

Restricted net position of the DCSWA represent funds set aside for use during the post- closure phase of the landfill’s life.

Capital Assets

Capital assets are recorded at historical cost. For those assets considered by management to be obsolete, a change in accounting estimate was made to reflect proper depreciation amounts. Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets, which range from two to thirty-seven years. No depreciation is taken beyond the anticipated life of the landfill. The DCSWA capitalizes assets in excess of $2,000.

Letter of Credit

DCSWA has an automatically renewing open standby letter of credit with the bank for the benefit of Pennsylvania Department of Environmental Protection (the “DEP”). This letter of credit is in the amount of $3,410,000 to adhere to DEP requirements.

Convanta Delaware Valley, LP - Revenue and Expense

The DCSWA has assumed from the County, the right, title, and interest in a service agreement with Covanta Delaware Valley, LP (“Covanta”). The County, through DCSWA, is obligated to deliver County waste to the Covanta facility for each billing year of twelve consecutive months guaranteed tonnage of 303,375 tons. Covanta is required, in turn, to pay the DCSWA, landfill host community fees for process residue resulting from the processing of the 303,375 tons of County waste at its facility. Further, Covanta pays to the DCSWA disposal fees for non-County waste. During 2014, DCSWA paid to Covanta $11,645,012, which included insurance costs, for its County waste deliveries. Covanta paid to the Authority $6,125,521 in residue charges. 56 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Concentrations

The DCSWA derived 18% of its operating revenue from Covanta.

Waterfront Industrial Development Authority

Property

Capital assets shown on these financial statements have been primarily financed by grants from both the County and the RDA. Depreciation is provided over the assets’ useful lives using the straight-line method of depreciation.

Lease and Development Agreement

The IDA entered into a lease and development with F.C. Pennsylvania Stadium LLC, as tenant of the stadium property to acquire, construct, furnish and equip a new stadium with related improvements and amenities. Further, the tenant will occupy the stadium premises during the terms of the lease as the tenant’s exclusive forum and location for playing and exhibition. The IDA retains legal ownership of and legal title to the stadium premises. However, during the term of the agreement, the tenant has legal and beneficial ownership of and legal title to leasehold interest in and to the Stadium facility.

4. Deposits and Investments

The County’s investments are included primarily in the Pension Trust Fund and are invested in accordance with the appointed Employee’s Retirement Board’s (the “Board”) investment policy. The policy authorizes the County to invest in cash equivalents which consist of treasury bills, money market funds, commercial paper, certificates of deposit, common trust funds, mutual funds, and fixed income securities which consist of U.S. government and agency securities, collateralized mortgage obligations, mortgage-backed pass-throughs, nontaxable corporate bonds, asset-backed securities, and GNMA pass-through securities.

In defining the objectives of the Retirement Fund, the Board has carefully reviewed its current and projected financial obligations as well as the risk and return relationships included in various asset allocation strategies. Based on these considerations, the Fund objectives are:

1. To invest assets of the Retirement Fund in a manner consistent with the fiduciary standards of Act 96, namely: (a) all transactions undertaken must be for the sole interest of Fund participants and their beneficiaries and to provide maximum benefits and defray reasonable expenses in a prudent manner, and (b) assets are to be diversified in order to minimize the impact of large losses in individual investments. 2. To provide for the funding and anticipated withdrawals on a continuing basis. 3. To conserve and enhance the capital value of the Retirement Fund in real terms through asset appreciation and income generation, while maintaining a moderate investment risk profile. 4. To minimize principal fluctuations over the investment cycle (three to five years). 5. To achieve a long-term level of return commensurate with contemporary economic conditions and equal to or exceeding the investment objective set forth in the policy of the Board. 57 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Equity funds invested in common stock, preferred stocks, and publicly traded real estate investment trusts shall be restricted to the high quality, readily marketable securities of corporations that are actively traded on a major exchange.

Not more than 5% of the total stock portfolio valued at market may be invested in the common stock of any one corporation. Ownership of the shares of one company shall not exceed 2% of those outstanding. Not more than 25% of stock valued at market may be held in any one industry category. Other than these constraints, there are no qualitative guidelines suggested as to issues, industry, or individual security diversification.

In order to maintain an effective money management structure that is style neutral, the large capitalization growth equity portion of the investment portfolio shall not exceed the large capitalization value equity portion of the portfolio by more than a two-to-one ratio. Conversely, value shall not exceed growth by the same ratio. This same relationship should be followed for the portfolio’s small capitalization equity money managers as well.

With regards to fixed income investments, all investments shall be high quality, marketable securities with a preponderance of the investments in (1) U.S. Treasury, federal agencies, and U.S. government-guaranteed obligations, and (2) investment grade municipal or corporate issues including convertibles.

Credit Risk

Concentration of credit risk is the risk of loss attributed to magnitude of the County’s investment in a single issuer. Fixed income securities of any one issuer shall not exceed 5% of the total bond portfolio at time of purchase. This does not apply to issues of the U.S. Treasury or other federal agencies.

Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized rating organization. The overall rating of the fixed income assets shall be at least “A,” according to either Moody’s or Standard & Poor’s rating system. In cases where the yield spread adequately compensates for additional risk, Baa or BBB ratings can be purchased up to a maximum of 15% of total market value of fixed income securities. If the credit quality of any one issue should drop below Baa or BBB, the investment manager should notify the Board and the investment consultant immediately, detailing their plan of action regarding the security.

Active bond management is encouraged and may require transactions that will temporarily lower the return or change the maturity of the portfolio in anticipation of market changes. Holdings of individual securities should be liquid so as not to incur unnecessary transaction costs.

58 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

The following securities and transactions are not authorized and shall not be purchased: letter stock and other unregistered securities, commodities of commodity contracts, short sales, margin transactions, private placements (with exception of Rule 144A securities); derivatives, options of futures for the purpose of portfolio leveraging are also prohibited, issues of or by instrumentalities deemed to be in violation of the Prohibited Transactions Standards of Act 96. Neither real estate equity nor natural resource properties such as oil, gas, or timber may be held except by purchase of publicly traded securities, except for existing real estate holdings. The purchase of collectibles is also prohibited.

All securities shall be held by a custodian appointed by the Board for safekeeping. The custodian shall produce statements at least quarterly listing the name and value of all assets held, and the dates and nature of all transactions. Assets of the Fund held as liquidity of investment reserves shall, at all times, be invested in interest-bearing accounts.

Deposits are comprised of demand deposit accounts with financial institutions. At December 31, 2014, cash on hand was $6,249. At December 31, 2014, the carrying amount of deposits and the bank balance was $130,706,947 and $140,029,123, respectively. The differences were caused primarily by items in transit.

Custodial Credit Risk

Custodial credit risk is the risk that in the event of a bank failure, the County’s deposits may not be returned to it. The County does not have a deposit policy for custodial credit risk. Commonwealth of Pennsylvania Act 72 of 1971 (“Act 72”), as amended, allows banking institutions to satisfy the collateralization requirement by pooling eligible investments to cover total public funds on deposit in excess of federal insurance. Such pooled collateral is pledged with the financial institutions’ trust departments. At December 31, 2014, $750,000 of the County’s bank balance was insured by the Federal Deposit Insurance Corporation (“FDIC”). The remaining balance of $139,279,123 is fully collateralized by securities pledged and held by the financial institution in accordance with Act 72, as indicated above. At December 31, 2014 the County’s bank balance was exposed to custodial credit risk as follows:

Uninsured and collateral held by pledging bank’s trust department not in the County’s name $ 139,279,123

Custodial credit risk is the risk that in the event of a failure of the counterparty (trustee) to a transaction, the County will not be able to recover the value of its investment. The Board does not have a formal policy for custodial credit risk. As of December 31, 2014, the County’s total investments of $452,561,528 were exposed to custodial credit risk, since the investments were uninsured securities held by its custodian, but not in the County’s name.

Interest Rate Risk

Interest rate risk is the risk that changes in market rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater sensitivity of its fair value to changes in market interest rates. The Board’s investment guidelines have no formal policy that limits investment maturities as a means of managing its exposure to interest rate risk. The Board has adopted a long-term investment horizon such that the chances and duration of investment losses are carefully weighed against the long-term potential for appreciation of assets.

59 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Foreign Currency Risk

Foreign currency risk is the risk that changes in the foreign exchange rates will adversely affect the fair value of an investment. The Board’s policy allows 20 percent of the portfolio be invested in developed international markets. On December 31, 2014, the international equity fund represented approximately 17.4% of the total portfolio.

The following is the carrying value (fair value) of deposits and investments at December 31, 2014:

S&P Duration Rating (Range) (1)(2) (1) Fair Value

Cash and cash equivalents N/A N/A $ 130,713,196

Investments: Stocks N/A N/A 333,057,602 Guaranteed investment contracts N/A N/A 24,530,196 Annuity N/A N/A 3,350,380 U.S. government and agencies AA+ 12.0-18.15 39,269,250 Mortgage obligations AA+ 0.50-3.10 655,479 Mortgage-backed pass-throughs AA+ 0.73-3.57 5,630,952 Corporate bonds A- 0.26-8.26 10,739,157 AA- 0.30-5.94 2,081,758 A 0.87-7.29 5,836,599 BBB+ 0.15-6.99 4,086,347 A+ 1.71-15.86 3,397,328 BBB 0.40-5.78 6,085,442 AAA 2.60-8.34 959,979 AA 1.60-16.18 2,059,311 AA+ 0.85-8.32 5,123,835 BBB- 0.32-6.54 1,838,485 NR 2.07-3.70 495,852 Asset-backed securities AAA 0.03 167,696 Municipal bonds A+ 2.10-3.01 341,325 AA 0.80-4.50 790,151 AA- 0.30-5.40 1,293,149 AA+ 0.50-16.71 229,967 AAA 1.50-1.60 208,869 NR 0.50-1.50 132,721 N/A 2.90 199,698

452,561,528 Total investments $ 583,274,724 Total

(1) N/A - not applicable (2) N/R - not rated

60 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

5. Component Units - Deposits and Investments

Economic Development Oversight Board

On December 31, 2014, the total carrying amount of EDOB’s checking and savings deposits was $540,872 and the corresponding bank balance was $549,527.

Custodial credit risk is the risk that in the event of a bank failure, the EDOB’s deposits may not be returned to it. The EDOB’s policy is to place deposits only in FDIC insured institutions. Deposits in excess of the FDIC limit are collateralized pursuant to Commonwealth of Pennsylvania Public Law 72 of 1971, which allows depositories to satisfy collateralization requirements by pooling eligible investments to cover total public funds on deposit in excess of federal insurance. In the normal course of business, EDOB may have deposits that exceed insured balances.

Solid Waste Authority

On December 31, 2014, the DCSWA held $10,307,915 in cash and cash equivalents.

Custodial credit risk is the risk that in the event of a bank failure, the DCSWA’s deposits may not be returned to it. The DCSWA’s policy is to place deposits only in FDIC insured institutions. Deposits in excess of the FDIC limit are collateralized pursuant to Commonwealth of Pennsylvania Public Law 72 of 1971, which allows depositories to satisfy collateralization requirements by pooling eligible investments to cover total public funds on deposit in excess of federal insurance.

DCSWA holds a surety bond. The bond requires a cash collateral deposit of $5,000,000 which is included in restricted cash as of December 31, 2014. Per terms of the surety bond, the collateral deposit is protected from custodial credit risk.

Redevelopment Authority

On December 31, 2014, the total carrying amount of RDA’s checking, savings and escrow deposits was $4,059,995 and the corresponding bank balance was $4,060,495.

Custodial credit risk is the risk that in the event of a bank failure, the RDA’s deposits may not be returned to it. The RDA does not have a policy for custodial credit risk. In the normal course of business, the RDA may have deposits that exceed insured balances.

Chester Waterfront Industrial Development Authority

On December 31, 2014, the IDA held $61,480 in cash and cash equivalents and a corresponding bank balance of $61,480.

Custodial credit risk is the risk that in the event of a bank failure, the IDA’s deposits may not be returned to it. The IDA does not have a written policy for custodial credit risk. The bank balances are covered by federal depository insurance.

61 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

6. Property Taxes

Real Estate Property Taxes

Real estate property taxes attach as an enforceable lien on property on January 1. Taxes are levied on February 1, payable on the following terms: 2% discount February 1 through April 1; face amount April 2 through June 1; and 10% penalty after June 2. The County bills and collects its own property taxes and revenues are recognized in the period in which they become susceptible to accrual, which is when they become both measurable and available. Real estate taxes receivable are recorded net of an allowance for uncollectibles totaling $942,909 as of December 31, 2014 on the statement of net position.

The County is permitted by law to levy taxes of an unlimited rate of mills on every dollar of assessed value of real property for general governmental services. At December 31, 2014, the millage rate was 5.604.

7. Other Receivables

Other receivables of $6,579,975 in the governmental activities consist of amounts due from the City of Chester of $6,447,065 (Note 26) and various other receivables of $132,910.

8. Accounts Receivable, Net

Accounts receivable, net of $15,968,614 in the business-type activity consists of amounts due from the Commonwealth of Pennsylvania Department of Public Welfare Medical Assistance of $11,039,185; Private Pay Patients of $5,469,369; Medicare Part A and B of $1,113,015 and other patient-related receivables of $1,283,213. The accounts receivable allowance for uncollectibles is calculated based on historical data and currently known facts and was $2,936,168 at December 31, 2014.

Accounts receivable, net of $2,601,474 in the governmental activities consists of amounts due from the Commonwealth of Pennsylvania and Harrah’s Chester for gaming revenue of $1,699,650 and various miscellaneous receivables of $901,824.

9. Component Units - Accounts Receivable, Net

The DCSWA manages the County owned transfer stations and is responsible for the receipt and transfer of solid waste materials as provided by commercial or private haulers. Beginning in January 1995, it was determined by agreement between the DCSWA and the County that the fees and permits collected from commercial or private haulers would remain with the DCSWA and represent income. Fees that were due relative to the receipt of solid waste at December 31, 2014 are represented by receivables in the amount of $3,217,920, net of an allowance for doubtful accounts of $75,072.

Commercial and private haulers that deposit waste at the landfill are charged hauling fees that are reflected in the DCSWA’s income. Receivables representing hauler fees at December 31, 2014 totaled $1,283,693. No allowance has been established for the landfill hauler fees since all were anticipated to have been collected.

62 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

10. Restricted Assets

Assets whose use is limited to a specific purpose have been classified as “restricted” cash and cash equivalents in the statement of net position. As of December 31, 2014, restricted cash and cash equivalents are held for the following:

Primary government: District Attorney Escrow Funds representing monies confiscated from arrested individuals, who ultimately will be distributed based upon court order. The aggregate amount has been classified as other restricted assets on the General Fund balance sheet $ 261,693 Marcellus Shale Funds are restricted pursuant to PA Act 13, for replacement or repair of locally owned at-risk deteriorated bridges and the planning acquisition, development rehabilitation and repair of greenways, recreational trails, open space, natural areas, community conservation and beautification projects, community and heritage parks and water resources management 3,794,867 Workers’ Compensation Escrow Funds are to be utilized for payment of major workers’ compensation claims 2,074,800 Emergency Communications Escrow Funds to be utilized for payment of maintenance agreements related to 911 global positioning system equipment in the capital project fund 1,383 Capital Project Funds to be utilized for various capital improvement projects as defined in the corresponding note agreements 21,955,763 Capital Project Funds to be utilized for Help America Vote Act Program 17,579 Health and Human Service Funds to be utilized for Health Choices reinvestment plans 5,197,494 Residents Special Aid and Entertainment Escrow Funds are to be utilized for entertainment of the Geriatric Center’s residents and are distributed by a resident’s council; they are classified as other restricted assets on the proprietary funds statement of net position 804,882

Total $ 34,108,461

Component units: Delaware County Solid Waste Authority deposited funds with an escrow agent to be used for the payment of closure and post closure care costs $ 5,000,000 Delaware County Economic Development Oversight Board maintains restricted cash related to Community Development Block Grant revolving loan fund requirements 299,931

Total $ 5,299,931

63 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

11. Capital Assets

A summary of changes in capital assets follows:

Reclassifi- January 1, cations/ December 31, 2014 Additions Disposals 2014

Governmental activities: Capital assets not being depreciated: Land $ 5,648,759 $ 10,000 $ - $ 5,658,759 Construction in progress 9,012,202 402,203 (615,321) 8,799,084

Total capital assets not being depreciated 14,660,961 412,203 (615,321) 14,457,843

Capital assets being depreciated: Land improvements 14,607,959 463,265 - 15,071,224 Buildings and improvements 224,484,492 4,272,847 - 228,757,339 Equipment 92,208,614 4,465,782 (618,969) 96,055,427 Infrastructure 8,041,992 754,871 - 8,796,863

Total capital assets being depreciated 339,343,057 9,956,765 (618,969) 348,680,853

Less accumulated depreciation for: Land improvements 9,485,835 669,108 - 10,154,943 Buildings and improvements 102,715,588 4,836,738 - 107,552,326 Equipment 68,580,847 3,618,106 (618,969) 71,579,984 Infrastructure 4,058,302 83,586 - 4,141,888

Total accumulated depreciation 184,840,572 9,207,538 (618,969) 193,429,141

Total capital assets being depreciated, net 154,502,485 749,227 - 155,251,712

Governmental activities, capital assets, net $ 169,163,446 $ 1,161,430 $ (615,321) $ 169,709,555

64 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Reclassifi- January 1, cations/ December 31, 2014 Additions Disposals 2014

Business-type activity, Geriatric Center: Capital assets being depreciated: Buildings and improvements $ 50,340,127 $ 1,281,967 $ - $ 51,622,094 Equipment 37,675,397 - - 37,675,397

Total capital assets being depreciated 88,015,524 1,281,967 - 89,297,491

Less accumulated depreciation for: Buildings and improvements 41,872,740 1,031,726 - 42,904,466 Equipment 34,260,715 935,639 - 35,196,354

Total accumulated depreciation 76,133,455 1,967,365 - 78,100,820

Total capital assets being depreciated, net 11,882,069 (685,398) - 11,196,671

Business-type activity, capital assets, net $ 11,882,069 $ (685,398) $ - $ 11,196,671

Depreciation expense was charged to governmental activities as follows:

General government $ 6,060,143 Corrections 2,453,517 Public ways and facilities, including depreciation of general infrastructure assets 83,586 Health and human service 312,007 Recreation 294,305 Other 3,980

Total $ 9,207,538

The following is a summary of capital assets by source:

December 31, 1983 and prior $ 69,756,116 General obligation bonds 270,160,900 General fund 4,094,987 State grants 17,855,652 Restricted 911 special revenue 1,271,041

Total $ 363,138,696

65 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

12. Component Units - Capital Assets

The capital asset activity for the DCSWA for the year ended December 31, 2014 was as follows:

Reclassifi- January 1, cations/ December 31, 2014 Additions Disposals 2014

Capital assets not being depreciated, Land $ 7,000,000 $ $ - $ 7,000,000 Construction in progress 1,008,163 631,092 - 1,639,255

Total capital assets not being depreciated 8,008,163 631,092 - 8,639,255

Capital assets being depreciated or depleted: Landfill 51,032,359 103,630 - 51,135,989 Machinery and equipment 9,790,245 508,355 - 10,298,600 Buildings and structures 13,440,028 - - 13,440,028 Pad construction 71,125,483 29,827 - 71,155,310

Total capital assets being depreciated 145,388,115 $641,812 - 146,029,927

Less accumulated depreciation and depletion for: Landfill 47,240,321 346,338 - 47,586,659 Machinery and equipment 9,331,154 208,198 - 9,539,352 Buildings and structures 9,733,600 579,528 - 10,313,128 Pad construction 43,120,807 2,920,344 - 46,041,151

Total accumulated depreciation and depletion 109,425,882 4,054,408 - 113,480,290

Total capital assets being depreciated or depleted, net 35,962,233 (3,412,596) - 32,549,637

Capital assets, net $ 43,970,396 $ (2,781,504) $ - $ 41,188,892

66 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

The capital asset activity for the IDA for the year ended December 31, 2014 was as follows:

Reclassifi- January 1, cations/ December 31, 2014 Additions Disposals 2014

Capital assets not being depreciated, Land $ 849,286 $ - $ - $ 849,286

Capital assets being depreciated, Property 29,365,000 - - 29,365,000

Less accumulated depreciation for, Property 3,915,334 978,834 - 4,894,168

Total capital assets being depreciated, net 25,449,666 (978,834) - 24,470,832

Capital assets, net $ 26,298,952 $ (978,834) $ - $ 25,320,118

13. Employees’ Retirement Plan

Plan Description and Administration

The Delaware County Employees’ Pension Plan (the “Plan”) is a single-employer defined benefit pension plan that covers all employees of the County. The plan is included in the accompanying financial statements of the County as a pension trust fund and does not issue a separate plan financial statement.

The plan is governed by the Delaware County Employees’ Retirement System Trust, Amended and Restated Effective January 1, 2011 plan document. The retirement trust is administered in good-faith compliance with the applicable provisions of the Internal Revenue Code and consistent with Commonwealth of Pennsylvania’s Act 96 of 1971, as amended, commonly referred to as the County Pension Law. The plan is managed by the Delaware County Retirement Board which consists of five members - three elected County Commissioners, the County Controller and the County Treasurer.

At January 1, 2014, the measurement date, members of the plan was as follows:

Inactive plan members currently receiving benefits 1,449 Inactive plan members entitled to benefits but not yet receiving them 208 Current employees 3,215

Total membership 4,872

Number of participating employers 1

67 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Benefits Provided

The Plan provides retirement, disability, and death benefits. Retirement benefits for plan members are calculated as a percent of the member’s highest 3-year average salary times the number’s years of service depending on class basis. Plan members with 20 years of service are eligible to retire at age 55. Plan members that have attained age 60 are eligible to retire. All plan members are eligible for disability benefits after 5 years of service if disabled while in service and unable to continue as a County employee. Disability retirement benefits are equal to 25% of the highest average salary at time of retirement. Death benefits for a member who dies with 10 years of service prior to retirement is the total present value of member’s retirement paid in a lump sum. A plan member who leaves County service with less than 5 years of service may withdraw his or her contributions, plus any accumulated interest. On an ad hoc basis, cost-of-living adjustments to each member’s retirement allowance shall be reviewed at least once in every three years subsequent to the member’s retirement date. The adjustment, should the County elect to give one, is a percentage of the change in the Consumer Price Index. Benefits are determined by the plan document which is in accordance with the Commonwealth of Pennsylvania’s Act 96 of 1971, as amended, commonly referred to as the County Pension Law.

Funding Policy and Contributions

Employees are required to contribute a portion of their salaries (7% of earnings in 2014) to the Plan and employees can elect to contribute up to 17% of their salaries. Per Act 96 of 1971, contribution requirements of the plan members and the County may be amended by the General Assembly of the Commonwealth of Pennsylvania. Interest is credited each year in an amount allowed by the County Retirement Board to each member’s account. Administrative costs of the Plan are financed through investment earnings.

The Plan’s funding policy provides for periodic employer contributions at actuarially determined rates. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by plan members during the year, with an additional amount to finance any unfunded accrued liability. Level percentages of payroll employer contribution rates are determined using the entry age normal actuarial cost funding method.

For 2014, the annual contribution by the County was $4,159,063 based on the January 1, 2014 actuarial valuation using the entry age normal cost method. The actuarial assumptions included (a) 7.5% investment rate of return (net of administrative expenses) compounded annually, (b) projected salary increases of 3.5% per year, and (c) cost-of-living adjustments provided at the discretion of the Delaware County Employees’ Retirement Board. Both (a) and (b) included an inflation component of 3%. The greater of the market value of assets as of the valuation date and the actuarial value of assets as of the prior valuation date plus contributions and other deposits except investment income minus benefit payments and administrative expenses or other payments plus credited interest at 1% less than the plans’ assumed rate to the valuation date. The actuarial value of assets will be limited to a maximum of 120% and a minimum of 80% of the market value of assets as of the valuation date.

68 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

The County’s annual pension cost and net pension obligation for the current year were calculated as follows:

Annual required contribution $ 4,159,063 Interest on net pension obligation (357,597) Adjustment to annual required contribution 966,496

Annual pension cost 4,767,962 Contributions made (4,159,063)

Change in net pension obligation (asset) 608,899 Net pension obligation (asset), beginning of year (1,766)

Net pension obligation (asset), end of year $ 607,133

The County’s annual required contribution for 2014 was determined as part of the January 1, 2014 actuarial valuation. The County’s annual pension costs, annual required contributions and net pension benefit obligation to the plan are as follows for 2014, 2013 and 2012:

Annual Pension Cost-Three Year Trend Information Percentage of Annual Net Pension Annual Pension Cost Obligation Years Ended December 31 Pension Cost Contributed (Asset)

2014 $ 4,767,962 87.23 % $ 607,133 2013 7,146,641 99.99 (1,766) 2012 7,142,276 99.99 (1,879)

Schedule of Contributions from the Employer Three-Year Trend Contributions Percentage of Annual Annual Required Required Years Ended December 31 Contribution Contribution

2014 $ 4,159,063 100.00 % 2013 7,146,641 100.00 2012 7,142,276 100.00

69 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

The funded status of the Plan as of January 1, 2014, the most recent actuarial valuation date, was as follows:

Ratio of Total Unfunded Unfunded Liability to Actuarial Actuarial Actuarial Annual Annual Value of Plan Accrued Liability Funded Covered Covered Assets Liability (Asset) Ratio Payroll Payroll (a) (b) (c) (a)/(b) (d) ((b-a)/d)

Delaware County Employees’ Retirement System $ 447,902,076 $ 436,487,382 $ (11,414,694) 102.6 % $ 134,056,126 (8.5) %

The schedule of funding progress, presented as required supplementary information (“RSI”) following the notes to the financial statements, presents multiyear trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the Actuarial Accrued Liability for benefits.

Deposits and Investments

The Plan allows funds to be invested pursuing a strategy that reduces risk through the prudent diversification of the portfolio across a broad selection of distinct asset classes. The following was the Board’s asset allocation policy for the 2014 measurement period.

Long-Term Expected Real Rate of Asset Class Target Return

Domestic equity 40-50 % 5.4-6.4 % International equity 15-20 5.5-6.5 Fixed income 30-40 1.3-3.3 Real estate 0-5 4.5-5.5 Cash and cash equivalents 0-2 0.0-1.0

The long-term expected rate of return on pension plan investments was determined using a building-block method which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation for the 2014 measurement period are summarized in the above table.

Rate of Return

For the year ended December 31, 2014, the annual money-weighted rate of return on pension plan investments, net of Pension Fund investment expense, was 6.5 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

70 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Pension Liability of the Plan

Net Pension Liability

The components of the net pension liability of the Plan as of December 31, 2014 were as follows:

Total pension liability $ 448,152,742 Plan fiduciary net position 463,376,325

Plan net pension liability $ (15,223,583)

Plan fiduciary net position as a percentage of total pension liability 103.40%

Actuarial Assumptions

The total pension liability above was determined by an actuarial valuation performed as of December 31, 2014 using the following actuarial methods and assumptions:

Actuarial valuation date December 31, 2014 Actuarial cost method Entry-age normal Actuarial assumptions: Projected salary increases 3.5% Inflation 3.0% Interest rate 7.5% Cost-of-living adjustments 0.0% Asset valuation method Market

Mortality rates were based on the RP-2013 Annuitant and Non-Annuitant Mortality Tables for Males and Females with no projected improvement. The actuarial assumptions used in the valuation for the 2014 measurement period were based on past experience under the plan and reasonable future expectations which represent the actuary’s best estimate of anticipated experience under the plan.

Discount Rate

The discount rate used to measure the total pension liability for the Plan was 7.5%. The projection of cash flows used to determine the discount rate assumed that member contributions will be made at the current contribution rate and that County contributions will be made at rates equal to actuarially determined contribution rates. Based on those assumptions, the Pension Fund’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

71 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Discount Rate Sensitivity

The following is a sensitivity analysis of the net pension asset to changes in the discount rate. The table below presents the pension (asset) liability of the $15,223,583 calculated using the discount rate of 7.5% as well as what the net pension liability would be if it were to be calculated using a discount rate that is 1 percentage point lower (6.5%) or 1 percentage point higher (8.5%) than the current rate:

1% Decrease Current 1% Increase (6.5%) Discount Rate (8.5%)

Net pension liability (asset) $ 19,447,836 $ (15,223,583) $ (44,135,357)

14. Long-Term Liabilities

Primary Government

The following is a summary of changes in noncurrent liabilities of the County for the year ended December 31, 2014:

Beginning Ending Due within Balance Additions Reductions Balance One Year

Governmental activities: Liability for claims payable $ 8,214,151 $ 46,443,769 $ (49,284,588) $ 5,373,332 $ 4,617,147 Liability for early retirement incentive 750,820 722,828 (451,724) 1,021,924 451,724 Liability for general obligation debt 312,386,052 38,726,057 (57,496,210) 293,615,899 15,286,773 Liability for OPEB obligation 118,841,000 31,576,000 (11,749,000) 138,668,000 12,000,000

Governmental activity, Long-term liabilities $ 440,192,023 $ 117,468,654 $ (118,981,522) $ 438,679,155 $ 32,355,644

Business-type activity, Liability for general obligation debt $ 33,095,319 $ 7,721,910 $ (9,026,178) $ 31,791,051 $ 2,231,227

The long-term liabilities are generally liquidated by the fund to which they relate. The significant funds to which they relate are the General, Health and Human Services, and Geriatric Care Fund.

72 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Component Unit

The following is a summary of changes in noncurrent liabilities of the DCSWA for the year ended December 31, 2014:

Beginning Ending Due within Balance Additions Reductions Balance One Year

Liability for accrued closure costs $ 13,048,897 $ 1,222,014 $ - $ 14,270,911 $ - Liability for note payable 2,100,000 - 500,000 1,600,000 500,000 Liability for revenue notes payable 10,248,000 - 443,000 9,805,000 457,000

Long-term liabilities $ 25,396,897 $ 1,222,014 $ 943,000 $ 25,675,911 $ 957,000

15. General Obligation Debt

The following are summaries of changes in general obligation debt, by type, for the year ended December 31, 2014:

Governmental Business-Type Activities Activity Total

Outstanding at the beginning of the year $ 312,386,052 $ 33,095,319 $ 345,481,371 Issuance of note 38,726,057 6,439,943 45,166,000 Accretion of bond premiums (837,421) - (837,421) Refinancing of note and series bond (38,515,528) (6,421,472) (44,937,000) Allocation of debt for capital assets (1,281,967) 1,281,967 - Retirements and repayments (16,861,294) (2,604,706) (19,466,000)

Outstanding at end of year $ 293,615,899 $ 31,791,051 $ 325,406,950

Total balance includes the premiums of $5,807,950. Actual debt outstanding was $319,599,000 at December 31, 2014.

The outstanding balance at December 31, 2014 related to governmental activities of $293,615,899 includes $6,230,679 of debt used to fund the capital assets of SEPTA. The following summarizes general obligation debt, by type, outstanding at December 31, 2014:

Governmental Business-Type Activities Activity Total

Serial bonds and notes $ 287,807,949 $ 31,791,051 $ 319,599,000

73 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

A summary of general obligation debt outstanding at December 31, 2014 is as follows:

Year of Issue/ Outstanding at Final Amount of December 31, Current Maturity Original Issue Purpose 2014 Portion

Fund SEPTA projects, building and park improvements, construction of a prison, and 1997/2022 $ 50,000,000 various other County projects $ 23,069,000 $ 10,000

Refinance the 1999 notes used to fund SEPTA 2002/2022 61,524,000 projects and various other County projects 13,790,000 1,570,000

Refinance the 1995 bonds used to refund the 1990 and 1992 bonds and advance refund the Delaware County Authority’s 1976 Revenue Bonds; refinance the 2001 note used to fund SEPTA projects and various other County projects; refinance the 2002A note used to fund SEPTA projects and 2005/2021 69,425,000 various other County projects 59,030,000 3,250,000

Fund voting machine project and various other 2005/2019 10,000,000 County projects 2,244,000 449,000

Refinance the 2004 Note and to refinance a 2007/2027 26,720,000 portion of the 2002 Note 18,960,000 2,235,000

Refund the 1997 bond to reduce total debt 2007/2016 15,584,000 service 4,338,000 2,139,000

Refund the 2002 bond and refinance a portion of the 2002 Note and portions of the 2007 2008/2017 9,537,000 Notes 3,320,000 1,071,000

Provide funds in the form of a Grant to the Delaware County Chester Waterfront Industrial Development Authority, which will be used to acquire, construct, and equip a new soccer stadium in the City of Chester, 2009/2039 28,595,000 Delaware County 25,735,000 625,000

Refund the 1999 General Obligation Note to 2009/2019 54,750,000 reduce total debt service 33,785,000 6,160,000

Refund the 2008 General Obligation Note and for various other capital projects at the 2010/2028 45,180,000 County 45,165,000 5,000

Fund SEPTA projects, construction and renovations of County buildings and various 2012/2032 20,000,000 other County projects 19,998,000 1,000

Fund SEPTA projects, construction and renovations of County buildings and various 2013/2033 25,000,000 other County projects 24,999,000 1,000

Partially refund the 1997 and 2002 notes 2014/2025 45,166,000 payable to level debt service payments 45,166,000 2,000

Total $ 319,599,000 $ 17,518,000 74 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

Interest rates on the above obligations range from 1% to a maximum potential variable rate of 15%.

There are a number of limitations and restrictions contained in the various bond indentures.

Amounts due by governmental funds are expected to be repaid from the General Fund. A summary of principal and interest maturities on general obligation serial bonds and notes outstanding at December 31, 2014 is presented below:

Total Principal Principal Interest and Interest Maturity Maturity (1) Maturities

Years: 2015 $ 17,518,000 $ 9,637,756 $ 27,155,756 2016 20,308,000 8,918,658 29,226,658 2017 20,909,000 8,326,580 29,235,580 2018 21,512,000 7,734,350 29,246,350 2019 22,123,000 7,133,626 29,256,626 2020-2024 120,981,000 25,804,147 146,785,147 2025-2029 65,990,000 9,920,894 75,910,894 2030-2034 22,593,000 3,761,554 26,354,554 2035-2039 7,665,000 1,217,444 8,882,444

Total $ 319,599,000 $ 82,455,009 $ 402,054,009

(1) Includes interest at year-end rates for variable rate notes. Interest on the variable rate notes is paid and adjusted monthly based on certain factors. Actual interest expense on all long- term debt totaled $8,123,157 for the year ended December 31, 2014.

During 2014 the County completed a partial refunding of the 1997 and 2002 debt to level debt service payments. The transaction resulted in additional cash flow requirements of approximately $4,600,000 for interest and an economic loss of approximately $31,000.

In September 2014, the Loan Agreements (Agreements) between the County and the Delaware Valley Regional Finance Authority (“DVRFA”) for the 1997 Note, the 2002 Note, the 2005 B Note, the 2007 A Note, the 2007 B Note, the 2008 A Series, the 2010 Bonds, the 2012 Notes and the 2013 Series were collectively amended to provide a cure period of 180 days for any events of default that would trigger an acceleration under the respective Agreements. The 180 day cure period is also included under the County/DVRFA Agreement for the 2014 Bonds.

75 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

DVRFA was formed for the purpose of establishing a pooled loan program for the benefit of local governmental units in the Delaware Valley region. The County has entered into general obligation notes with DVRFA of which $201,049,000 is outstanding at December 31, 2014.

DVRFA has entered into interest rate swap agreements with third party financial institution counterparties related to the bonds DVRFA issued, the proceeds of which fund the pooled loan program. If the swap agreements were terminated, DVRFA would receive or be obligated to pay the market value of the swap agreements at the termination date. If DVRFA were obligated to make a payment and sufficient funds were not available each borrower would be assessed its allocable share of the termination payment, borrowers are not entitled to any payments DVRFA would receive from a counterparty as a result of a termination. A related interest rate swap agreement may be terminated under the following circumstances: 1) DVRFA and the counterparty mutually consent to the termination, 2) the borrower defaults on its loan, or 3) DVRFA or the counterparty default or their financial conditions deteriorate to make a default imminent. DVRFA would seek to replace the terminated underlying swap agreement with a new agreement with similar terms and conditions upon termination.

DVRFA enters into interest rate swap agreements to provide fixed interest rates to borrowers. The agreement would normally only be terminated if the borrower requested it, including prepayment of the outstanding note, or if the borrower defaulted on its loan. The borrower would be responsible for any termination payment. The borrower is not entitled to receive any payments DVRFA would receive from the counterparty as a result of a termination.

As of December 31, 2014, the market value of interest rate swap agreements related to outstanding general obligation notes outstanding are as follows:

Market Value of Related Market Value of Allocable Related Balance Interest Rate Fixed Rate General Obligation Note Year of Issue Outstanding Swap Loan Swap

1997 $ 23,069,000 $ 1,884,547 $ - 2002 13,790,000 1,347,668 737,581 2005 2,244,000 183,315 176,754 2007 23,289,000 1,903,254 2,680,606 2008 3,320,000 271,206 146,761 2010 45,165,000 3,689,606 3,240,829 2012 19,998,000 1,633,671 3,360,388 2013 24,999,000 2,042,211 3,027,940 2014 45,166,000 - -

76 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

16. Component Unit - Notes Payable

Note Payable

The DCSWA acquired the right and title to Shenkel Road from Earl Township (the “Township”) in 1998 for $7,000,000. For the consideration of the option to acquire Shenkel Road, the Authority had previously paid $100,000 to the Township. The remaining $6,900,000 was to be paid to the Township over twenty years upon notification of the permit expansion approval. The note payable bears no interest and is to be repaid as follows:

Years ending December 31: 2015 $ 500,000 2016 500,000 2017 600,000

Total $ 1,600,000

Revenue Notes Payable

On March 25, 2009, the DCSWA authorized the issuance of Guaranteed Revenue Notes, 2009 Series (the “Notes”) totaling $7,200,000. The 2009 Notes will be used for certain capital projects consisting of a) the construction of leachate collection and treatment facilities, b) the acquisition of vehicles and equipment, c) the construction of and improvements to the Rolling Hills Landfill, d) the rehabilitation of wells, and e) the payment of the costs of issuance of the 2009 Notes. The 2009 Notes will be issued over a two year period.

On March 25, 2009, the Delaware Valley Regional Finance Authority issued on behalf of the DCSWA, Guaranteed Revenue Notes, 2009 A Series (the “2009 A Notes”) in the amount of $2,400,000.

On March 25, 2010, the Delaware Valley Regional Finance Authority issued on behalf of the Authority, Guaranteed Revenue Notes, 2010 B Series (the “2010 B Notes”) in the amount of $2,400,000.

On March 25, 2010, the Delaware Valley Regional Finance Authority issued on behalf of the DCSWA, Guaranteed Revenue Notes, 2010 C Series (the “2010 C Notes”) in the amount of $2,400,000.

Principal is payable annually on March 25 beginning March 25, 2010. Interest is payable monthly at a rate of 3.38% for Series A, 3.23% for Series B and 3.39% for Series C as per the Notice of Fixed Rate Conversion.

On March 26, 2012, the DCSWA authorized the issuance of Guaranteed Revenue Notes, 2012 Series (the “2012 Notes”) totaling $4,000,000. The 2012 Notes will be used for certain capital projects consisting of a) the construction of leachate collection and treatment facilities, b) the acquisition of vehicles and equipment, c) the construction of and improvements to the Rollings Hills Landfill, d) the rehabilitation of wells, and e) the payment of the costs of issuance of the Notes.

77 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

On March 26, 2012, the Delaware Valley Regional Finance Authority issued on behalf of the DCSWA, Guaranteed Revenue Notes, 2012 A Series (the “2012 A Notes”) in the amount of $4,000,000. Principal is payable annually on June 25 beginning June 25, 2013. Interest is payable monthly at a rate of 2.485% as per the Notice of Fixed Rate Conversion.

The County has guaranteed the 2009 and 2012 loan agreements listed above between the DCSWA (component unit) and DVRFA in accordance with the laws of Commonwealth of Pennsylvania. In the event that the DCSWA is unable to make payment, the County will be required to make payment. The guarantees are for the term and amount of the debt disclosed below. There are no arrangements for recovery of payments.

The aggregate annual principal and interest payments for each of the following years ending December 31 are as follows:

Principal Interest

Years ending: 2015 $ 457,000 $ 288,306 2016 471,000 274,223 2017 486,000 259,681 2018 501,000 244,674 2019 518,000 235,744 2020-2033 7,372,000 1,360,999

Total $ 9,805,000 $ 2,663,627

For the year ended December 31, 2014, interest expense amounted to $339,457.

17. Interfund Receivables and Payables

Interfund receivable and payable balances as of December 31, 2014 are as follows:

Due from Other Due to Other Funds Funds

General Fund $ 22,453,923 $ 26,224,826 Health and Human Service Fund 18,492,767 11,726,217 Capital Projects Fund - 13,957,325 Other Governmental Funds 8,441,163 3,185,783 Enterprise Fund 6,221,597 - Internal Service Funds 4,145,933 4,661,232

Total $ 59,755,383 $ 59,755,383

These balances resulted from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, and (2) transactions are recorded in the accounting system and payments between the funds are made.

78 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

18. Amounts Due To/From Component Units

The following is a summary of amounts due to/from component units (the DCSWA and RDA) at December 31, 2013, activity for 2014, and amounts due at December 31, 2014:

Capital Projects General Fund Fund Total

Balance, December 31, 2013 $ 2,000,000 $ 5,475,000 $ 7,475,000 Additions - - - Repayments - - -

Balance, December 31, 2014 $ 2,000,000 $ 5,475,000 $ 7,475,000

The County has made advances to the DCSWA from time to time for operations and or capital purchases and improvements. The DCSWA did not repay any amounts during 2014 on these advances. The amount due from the DCSWA to the County’s Capital Project fund of $5,475,000 reflects a pledged investment which is not expected to be liquidated within the current operating cycle.

19. Interfund Transfers

Interfund transfers for the year ended December 31, 2014 are as follows:

Transfers In Transfers Out

General Fund $ 1,060,000 $ 15,598,829 Health and Human Service Fund 13,011,484 6,588,485 Enterprise Fund 2,072,334 - Other Governmental Funds 7,103,496 1,060,000

Total $ 23,247,314 $ 23,247,314

Transfers from the general fund to the health and human service fund and the other governmental funds are unrestricted revenue collected in the general fund used for the County’s match for various grant agreements. Transfers from the general fund to the enterprise fund are unrestricted revenues collected in the general fund used to subsidize operating shortfalls in the proprietary fund.

20. Other Revenues

Other revenues of approximately $9,932,000 in the governmental funds consist of funds received related to gaming proceeds for economic development of approximately $1,442,000; revenue from the City of Chester of approximately $441,000; rental income of approximately $670,000; funds received from the state equalization board of approximately $472,000; payments in lieu of taxes of approximately $278,000 and various other revenues of $6,629,000.

79 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

21. Unearned Revenues

Unearned revenues are those where asset recognition criteria have been met, but for which revenue recognition criteria have not been met. On the statement of net position, governmental activities unearned revenue of $39,985,217 consists of the General Fund of $2,513,661 representing grants and other fees, Health and Human Service of $26,105,596 and Other Governmental Funds of $11,365,960 representing grants received which were not earned at December 31, 2014.

22. Commitments and Contingencies

Commitments

The County leases office space under a number of operating leases with expiration dates through 2030.

Future minimum lease payments for each of the five years subsequent to December 31, 2014 under the various leases are as follows:

Years ending December 31: 2015 $ 3,306,936 2016 3,203,715 2017 2,997,942 2018 2,379,532 2019 2,110,902 2020-2024 2,215,221 2025-2029 259,957 2030 29,172

Total $ 16,503,377

Total rental expense for these leases during 2014 was $3,187,346.

Contingencies

The use of grant monies received is subject to compliance audits by the disbursing governmental agency. The County believes it is in compliance with all significant grant requirements.

The County is involved in various litigation matters arising in the normal course of business which are still pending. The ultimate outcome of these cases or the County’s exposure to liability, if any, cannot be determined at this time. Consequently, no provision has been made in these financial statements for this uncertainty. It is the opinion on management that the amount of potential claims not covered by insurance resulting from claims against the County would not materially affect the financial position of the County at December 31, 2014.

The DCSWA is involved in various litigation. It is the opinion of DCSWA management that the outcome of these matters will not have a material adverse effect on the financial position of the DCSWA.

80 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

23. Other Post-Employment Benefits

Plan Description

The County’s Retiree Health Plan is single-employer plan administered by the County. The Plan provides postretirement medical, dental, and life insurance benefits to eligible retirees. The County pays premiums for medical, dental, and life insurance on behalf of eligible retirees. The Plan is unfunded and no financial report is prepared. The Plan is authorized and under the control, maintenance and operation of County Council.

Funding Policy

Plan members do not contribute to the plan; the County pays 100% of the cost of coverage for retired covered employees. The required contribution is based on pay-as-you-go financing requirements. County Council has the authority to amend the Plan including changing the obligations of the plan members and the County to contribute to the Plan.

Annual OPEB Cost and Net OPEB Obligation

The County’s annual other postemployment benefit (“OPEB”) cost (expense) is calculated based on the annual required contribution of the employer (“ARC”), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC is equal to the normal cost and the amortization of the Unfunded Actuarial Accrued Liability plus interest. The following show the components of the County’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the County’s net OPEB obligation:

Annual required contribution $ 30,766,000 Interest on net OPEB obligation 5,348,000 Adjustment to annual required contribution (4,538,000)

Annual OPEB cost (expense) 31,576,000

Contributions made (11,749,000)

Increase in net OPEB obligation 19,827,000

Net OPEB obligation at January 1, 2014 118,841,000

Net OPEB obligation at December 31, 2014 $ 138,668,000

81 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for December 31, 2014 were as follows:

Percentage of Annual Annual OPEB OPEB Cost Net OPEB Cost Contributed Obligation

Years ended December 31: 2014 $ 31,576,000 37% $ 138,668,000 2013 19,581,000 34% 118,841,000 2012 27,843,000 42% 99,286,000

Funded Status and Funding Progress

The funded status of the plan as of January 1, 2014, the most recent actuarial valuation date, was as follows:

Actuarial accrued liability (“AAL”) $ 312,524,000 Actuarial value of plan assets -

Unfunded actuarial accrued liability (“UAAL”) $ 312,524,000

Funded ratio (actuarial value of plan assets/AAL) 0%

Covered payroll (active plan members) $ 148,593,000

UAAL as percentage of covered payroll 210.3%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the health care cost trend. Actuarial amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.

Actuarial Methods and Assumptions

The calculations are based on the types of benefits provided under the terms of the substantive plan at the time of the valuation and on the pattern of cost sharing between the employer and plan members. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the employer and plan members in the future. The actuarial methods and assumptions used include techniques that are designed to reduce the efforts of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

82 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

In the January 1, 2013, actuarial valuation, the projected unit credit method was used. The actuarial assumptions included a 4.5% investment rate of return (net of administrative expenses), which is the expected long term investment return of the County’s investments and deposits used to pay plan benefits, an annual health care costs trend rate of 9%, 7% for post 65 and Medicare eligible retirees, initially, reduced by decrements to an ultimate rate of 5%, an inflation rate of 3.5% and a projected salary increase of 3.5%. The UAAL is being amortized using the level percentage of projected payroll on an open basis. The amortization of UAAL is done over a period of 30 years.

24. Self-Insurance Program

Effective January 1, 1987, the County elected to self-insure potential obligations applicable to workers’ compensation, casualty/liability and health insurance. By doing so, the County is exposed to certain risks of losses associated with these types of transactions. These programs are contractually administered by private agencies. Three separate internal service funds were established to account for all transactions associated with self insurance.

The County purchased reinsurance coverage to limit its liability per incident to a maximum of:

1988 to 1992 1993 to 1999 2000 to 2001

Workers’ compensation $ 300,000 $ 300,000 $ 250,000 Casualty/liability (excluding vehicles) - 100,000 100,000 Health benefits 75,000 75,000 75,000 Vehicles 100,000 100,000 100,000

2002 to 2006 2007 to 2013 2014

Workers’ compensation $ 325,000 $ 500,000 $ 650,000 Casualty/liability (excluding vehicles) 250,000 250,000 250,000 Health benefits 90,000 200,000 210,000* Vehicles 100,000 100,000 100,000

*includes a $365,000 corridor deductible

The County’s reinsurance policy has provided sufficient coverage to the County such that no settlements within the past three years have exceeded the reinsurance coverage. The cost of providing this coverage is charged directly to the County fund which benefits from the coverage. Such charges are reflected as operating revenues into the self-insurance funds. Costs of the self-insurance program charged to the current year expenses were $46,443,769, which includes insurance claims of $46,293,550 and administrative costs of $150,219. Expenditures and claims are recognized when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. In determining claims, events that might create claims, but for which none have been reported, are considered.

83 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

An analysis of the claims activity is presented as follows:

2014 Current Year Balance at Claims and Actual Balance at Beginning Changes in Claim End of of Year Estimate Payments Year

Self-Insured Health Insurance Fund $ 5,893,559 $ 39,643,038 $ 40,919,450 $ 4,617,147 Self-Insured Workers’ Compensation Fund 1,401,031 1,779,615 2,889,524 291,122 Self-Insured Casualty/Liability Fund 919,561 5,021,116 5,475,614 465,063

Total $ 8,214,151 $ 46,443,769 $ 49,284,588 $ 5,373,332

2013 Current Year Balance at Claims and Actual Balance at Beginning Changes in Claim End of of Year Estimate Payments Year

Self-Insured Health Insurance Fund $ 3,055,022 $ 39,785,190 $ 36,946,653 $ 5,893,559 Self-Insured Workers’ Compensation Fund 1,355,457 2,125,094 2,079,520 1,401,031 Self-Insured Casualty/Liability Fund 919,561 5,077,236 5,077,236 919,561

Total $ 5,330,040 $ 46,987,520 $ 44,103,409 $ 8,214,151

25. Investment in Joint Venture

Southeastern Pennsylvania Transportation Authority (“SEPTA”) runs a multi-modal system of vehicles and route services in Delaware County along with other areas such as Chester, Montgomery, Philadelphia and selected areas in New Jersey and Delaware. SEPTA has five participants-Delaware, Chester, Bucks, Montgomery and Philadelphia Counties each of which appoints two members to the Governing Board. Four members are appointed by the Pennsylvania State House and Senate. The fifteenth member is appointed by the Governor’s office. Delaware County has an ongoing financial responsibility as it is obligated for the Transportation Bonds of SEPTA and the continued existence of SEPTA depends on continued funding by the County and the other four participants.

Under state law, the County is required to subsidize SEPTA’s operating and capital budget annually. During 2014, the County’s budget contribution was $7,292,218. Included on the statement of net position is an investment in a joint venture totaling $182,246,603 at December 31, 2014.

Complete financial statements for SEPTA can be obtained from the administrative offices of SEPTA.

84 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

26. Grant to the Delaware County Chester Waterfront Industrial Development Authority

The IDA was formed for the purpose of acquiring, constructing, financing, improving and maintaining industrial and commercial development projects within the City of Chester and is a discretely presented component unit of the County (Note 2). On February 15, 2009 the County and the IDA executed a grant agreement which states that the County will grant funds in an amount up to $30,000,000 for eligible costs as defined for the construction of a stadium project. The County financed the grant through the issuance of its General Obligation Bonds, Series of 2009 (“2009 Bonds”) (Note 15). Upon issuance of the 2009 Bonds the proceeds were placed in a Trust, as eligible costs are expended by the IDA funds are released from the Trust on a reimbursement basis.

On February 15, 2009, the County and the City of Chester (the “City”) executed a contribution agreement whereby the City unconditionally agreed to pay the County $13,445,635 through May 31, 2039 in semi-annual payments to fund a portion of the capital grant to the IDA. During 2014, the City made scheduled payments to the County for approximately $441,477. The present value of this asset amounting to approximately $6,446,559 has been recorded in other receivables on the government-wide statement of net position at December 31, 2014 (Note 7).

27. Early Retirement Incentive

During 2010, the County offered an Early Retirement Incentive Plan (the “2010 Plan”) which allowed employees and eligible spouses and dependents to retain their existing health care coverage for a period of 5 years. The 2010 Plan was a one-time voluntary incentive retirement program for full-time employees who were at least 60 or who were at least age 55 with at least 20 full years of full-time employment with the County as of their retirement date. The 2010 Plan included a life-time waiver of the contribution for spousal and dependent coverage. In addition, eligible employees received a medical benefit subsidy payment based off years of service calculated at $300 per year of service. The amount payable pursuant to this program was $338,200 at December 31, 2014, all of which is included in current liabilities in the statement of net position.

During 2014, the County offered an Early Retirement Incentive Plan (the "2014 Plan") which allowed employees and eligible spouses and dependents to retain their existing health care coverage for a period of 5 years through June 30, 2019. The employees were required to retire between February 20, 2014 and June 30, 2014. The 2014 Plan was a one-time voluntary incentive retirement program for full•time employees who were at least 60 with 3 full-time years of service or were at least 55 with at least 20 full-time years of service with the County as of their retirement date. The 2014 Plan included a life-time waiver of the contribution for spousal and dependant coverage. In addition, eligible employees can receive Medicare Part B premium reimbursement through June 30, 2019. The amount payable pursuant to this program was $683,724 at December 31, 2014, which is included in both current and noncurrent liabilities in the statement of net position. The amounts payable are calculated at the discounted present value of future benefit payments.

85 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

28. New Accounting Pronouncements

In June 2012, GASB issued Statement No. 68, Accounting and Financial Reporting for Pensions - an Amendment of GASB Statement No. 27 ("GASB 68"). The objective of this Statement is to improve financial reporting by state and local governmental pension plans. It also improves information provided by state and local governmental employers about financial support for pensions that is provided by other entities. GASB 68 establishes standards for measuring and recognizing liabilities, deferred outflows of resources, and deferred inflows of resources, and expense/expenditures. For defined benefit pensions, this standard identifies the methods and assumptions that should be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. Note disclosure and required supplementary information requirements about pensions also are addressed. The County is required to adopt Statement No. 68 for its calendar 2015 financial statements.

In January 2013, the GASB issued Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. The objective of this Statement is to improve accounting and financial reporting by addressing an issue in Statement No. 68, Accounting and Financial Reporting for Pensions, concerning transition provisions related to certain pension contributions made to defined benefit pensions plans prior to implementation of that Statement by employers and non-employer contributing entities. The County is required to adopt Statement No. 71 for its calendar 2015 financial statements.

In February of 2015, the GASB issued Statement No. 72, Fair Value Measurement and Application. The objective of the statement is to address accounting and financial reporting issues related to fair value measurements and to provide guidance for applying fair value to certain investments and disclosures related to all fair value measurements. The County is required to adopt Statement No. 72 for its calendar 2016 financial statements.

In June of 2015, the GASB issued Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. This standard completes the suite of pension standards. Statement 73 establishes requirements for those pensions and pension plans that are not administered through a trust meeting specified criteria (in other words, those not covered by Statements 67 and 68). The requirements in Statement 73 for reporting pensions generally are the same as in Statement 68. However, the lack of a pension plan that is administered through a trust that meets specified criteria is reflected in the measurements. The County is required to adopt Statement No. 73 for its calendar 2016 financial statements.

86 County of Delaware, Pennsylvania Notes to Financial Statements December 31, 2014

In June of 2015, the GASB issued Statement 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, which replaces GASB Statement No. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. Statement 74 addresses the financial reports of defined benefit OPEB plans that are administered through trusts that meet specified criteria. The Statement follows the framework for financial reporting of defined benefit OPEB plans in Statement 45 by requiring a statement of fiduciary net position and a statement of changes in fiduciary net position. The Statement requires more extensive note disclosures and RSI related to the measurement of the OPEB liabilities for which assets have been accumulated, including information about the annual money-weighted rates of return on plan investments. Statement 74 also sets forth note disclosure requirements for defined contribution OPEB plans. The County is required to adopt Statement No. 74 for its calendar 2017 financial statements.

In June of 2015, the GASB issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions which replaces the requirements of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. Statement 75 requires governments to report a liability on the face of the financial statements for the OPEB that they provide: Governments that are responsible only for OPEB liabilities related to their own employees and that provide OPEB through a defined benefit OPEB plan administered through a trust that meets specified criteria will report a net OPEB liability—the difference between the total OPEB liability and assets accumulated in the trust and restricted to making benefit payments. Governments that participate in a cost-sharing OPEB plan that is administered through a trust that meets the specified criteria will report a liability equal to their proportionate share of the collective OPEB liability for all entities participating in the cost-sharing plan. Governments that do not provide OPEB through a trust that meets specified criteria will report the total OPEB liability related to their employees.

Statement 75 requires governments in all types of OPEB plans to present more extensive note disclosures and required supplementary information (RSI) about their OPEB liabilities. Among the new note disclosures is a description of the effect on the reported OPEB liability of using a discount rate and a healthcare cost trend rate that are one percentage point higher and one percentage point lower than assumed by the government. The new RSI includes a schedule showing the causes of increases and decreases in the OPEB liability and a schedule comparing a government’s actual OPEB contributions to its contribution requirements. The County is required to adopt Statement No. 75 for its calendar 2018 financial statements.

County management is in the process of evaluating, but has not yet determined how the adoption of the above GASB guidance will impact the County’s financial statements.

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

Required Supplementary Information

County of Delaware, Pennsylvania Required Supplementary Information Schedule of Funding Progress for the Retirement Health Plan (OPEB) and OPEB Plan Schedule of Employer Cost Year Ended December 31, 2014 (Unaudited)

Schedule of Funding Progress for the Retirement Health Plan (OPEB) (In Thousands) Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Value of Liability AAL Covered of Covered Assets (AAL) (UAAL) Funded Ratio Payroll Payroll Actuarial Valuation Date (a) (b) (b-a) (a/b) (c) ([b-a]/c)

January 1, 2014 $ - $ 312,524 $ 312,524 - % $ 148,593 210.3 % January 1, 2013 - 292,385 292,385 - 148,593 196.8 % January 1, 2012 - 291,875 291,875 - 134,154 217.6 % January 1, 2011 - 275,677 275,677 - 131,212 210.1 % January 1, 2010 - 308,751 308,751 - 127,960 241.3 % January 1, 2009 - 284,300 284,300 - 129,284 219.9 %

OPEB Plan Schedule of Employer Cost (In Thousands) Annual OPEB Percentage of Net OPEB Year Ended Cost (“AOC”) ARC Contributed Obligation

2014 $ 31,576 37% $ 138,668 2013 29,851 34% 118,841 2012 27,843 42% 99,286 2011 26,418 41% 83,021 2010 30,903 22% 67,524 2009 23,880 18% 43,276

88 County of Delaware, Pennsylvania Required Supplementary Information Schedule of Funding Progress for Employees’ Retirement Plan Year Ended December 31, 2014 (Unaudited)

Schedule of Funding Progress for the Employees’ Retirement Plan (In Thousands) Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Value of Liability AAL Funded Covered of Covered Assets (AAL) (UAAL) Ratio Payroll Payroll Actuarial Valuation Date (a) (b) (b-a) (a/b) (c) ([b-a]/c)

January 1, 2014 $ 447,902 $ 436,487 $ (11,415) 102.6 % $ 134,056 (8.5) % January 1, 2013 394,833 415,611 20,778 95.0 % 131,612 15.8 % January 1, 2012 376,064 401,198 25,134 93.7 % 126,634 19.8 % January 1, 2011 361,732 376,516 14,784 96.1 % 128,948 11.5 % January 1, 2010 341,664 361,787 20,123 94.4 % 132,733 15.2 % January 1, 2009 318,631 346,255 27,624 92.0 % 120,383 22.9 %

Note: The entry age normal actuarial cost method is used to determine the annual required contribution (“ARC”) for the Employee’s Retirement Plan. Prior to 2014, the aggregate method was used.

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

Combining Statements and Schedules Governmental Fund Types

County of Delaware, Pennsylvania Required Supplementary Information Schedule of Changes in the County's Net Pension Liability and Related Ratios Pension Trust Fund December 31, 2014

2014

Total Pension Liability Service cost $ 4,767,962 Interest changes of benefit terms 31,874,452 Changes of assumptions 4,147,176 Benefit payments, including refunds of member contributions (25,266,392)

Net change in total pension liability 15,523,198

Total pension liability - beginning 432,629,544

Total pension liability - ending (a) $ 448,152,742

Plan Fiduciary Net Position Employer contributions $ 4,159,063 Employee contributions 10,929,265 Net investment income 25,701,117 Benefit payments, including refunds of member contriutions (25,266,392) Administration (48,804) Other -

Net change in plan fiduciary net position 15,474,249

Plan Fiduciary Net Position, Beginning 447,902,076

Plan Fiduciary Net Position, Ending (b) $ 463,376,325

Plan net pension asset - ending (a) - (b) $ (15,223,583)

Plan Fiduciary Net Position as a Percentage of the Total Pension Asset 103.40%

Covered-Employee Payroll $ 134,056,126

County's Net Pension Asset as a Percentage of Covered- Employee Payroll (11.36)%

Notes to Schedule: The County implemented GASB Statement No. 67 in fiscal year 2014. Information prior to fiscal year 2014 is not available.

90 County of Delaware Required Supplementary Information Schedule of Employer Contributions Pension Trust Fund Last Ten Fiscal Years

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Actuarially Determined Contribution $ 924,026 $ 1,798,896 $ 1,922,699 $ 83,054 $ 7,487,851 $ 6,756,099 $ 5,944,506 $ 7,142,276 $ 7,146,641 $ 4,159,063

Contributions in Relation to the Actuarially Determined Contribution 924,026 1,798,896 1,922,699 85,455 7,487,851 6,756,099 5,944,506 7,142,276 7,146,641 4,159,063

Cotnribution Deficiency (Excess) $ - $ - $ - $ (2,401) $ - $ - $ - $ - $ - $ -

Covered-Employee Payroll $ - $ - $ - $ 118,649,000 $ 120,383,000 $ 132,733,000 $ 128,948,000 $ 126,634,000 $ 131,612,000 $ 134,056,000

Contributions as a Percentage of Covered- Employee Payroll 0.07% 6.22% 5.09% 4.61% 5.64% 5.43% 3.10%

Notes to Schedule: Covered-employee payroll information not available 2007 and prior.

Valuation date: January 1, 2014

Methods and assumptions used to determine contribution rates: Actuarial cost method Entry Age Amortization method Level dollar Remaining amortization period 30 years Asset valuation method Fair market value Inflation 3% Salary increases 3.5% average, including inflation Investment rate of return 7.5%, net of pension plan investment expense, including inflation Retirement age Age 60 or 55 with 20 years of service

Mortality 2013 RP Annuitant and Non-Annuitant Mortality Tables for males and females with no projected improvement

91 County of Delaware Required Supplementary Information Schedule of Investment Returns Pension Trust Fund December 31, 2014

2014

Annual Money-Weighted Rate of Return, Net of Investment Expense 6.5%

Notes to Schedule: The County implemented GASB Statement No. 67 in fiscal year 2014. Information prior to fiscal year 2014 is not available.

County of Delaware, Pennsylvania

General Fund Description of Fund For the Year Ended December 31, 2014

The General Fund is the general operating fund of the County. It is maintained to account for all financial resources except those required to be accounted for in another fund. The general tax revenues of the County as well as other resources received and not designated for a specific purpose are accounted for in the General Fund.

93 County of Delaware, Pennsylvania Schedule of Expenditures Compared to Budget (GAAP Basis) General Fund Year Ended December 31, 2014

Variances Final Positive Budget Actual (Negative)

Current General government: Administrative Services $ 342,500 $ 326,316 $ 16,184 Budget Management 194,000 176,035 17,965 Bureau of Elections 774,000 650,020 123,980 Central Purchasing 231,500 234,159 (2,659) Community Health 338,000 331,022 6,978 Constables 1,503,500 1,502,254 1,246 Consumer Affairs 281,000 270,876 10,124 Controller 815,000 725,537 89,463 County Buildings Maintenance 3,241,000 3,056,211 184,789 County Clerk 377,000 362,476 14,524 County Council 465,779 411,028 54,751 County Motor Vehicle Management 205,000 222,328 (17,328) Court House Police 1,172,000 1,044,674 127,326 Data Processing 2,583,000 2,417,670 165,330 Executive Director 966,000 886,492 79,508 Library Services 1,072,000 1,053,807 18,193 Parks and Recreation 1,707,000 1,657,747 49,253 Personnel 584,000 353,688 230,312 Planning 875,000 692,980 182,020 Public Works 195,000 176,190 18,810 Public Relations 250,000 234,446 15,554 Recorder of Deeds 738,000 503,587 234,413 Risk Management 27,000 4,007 22,993 Self -Tax Collection 237,000 207,599 29,401 Solicitor 1,315,000 1,318,243 (3,243) Tax Assessment 1,015,000 901,497 113,503 Tax Claim Office 1,113,000 1,111,135 1,865 Telecommunications 819,000 724,700 94,300 Treasurer 467,000 438,052 28,948 Veterans' Affairs 240,000 237,025 2,975 Voter Registration 403,000 374,150 28,850 Voting Machines 635,000 540,598 94,402

Total general government 25,181,279 23,146,549 2,034,730

(continued)

94 County of Delaware, Pennsylvania Schedule of Expenditures Compared to Budget (GAAP Basis) General Fund Year Ended December 31, 2014

Variances Final Positive Budget Actual (Negative)

Judicial: Adult Probation and Parole $ 4,458,000 $ 4,340,892 $ 117,108 Bail Agency 923,000 846,986 76,014 Court Administrator 2,129,000 1,780,919 348,081 Court Support and Services 6,293,000 5,599,485 693,515 Diagnostic Services 653,000 536,833 116,167 District Justice 7,634,000 6,857,091 776,909 Domestic Relations 6,463,000 5,540,071 922,929 Electronic Record System 892,000 871,273 20,727 Financial Services 263,000 221,792 41,208 Juvenile Court 10,655,000 9,498,217 1,156,783 Juvenile Detention 4,369,000 3,760,042 608,958 Juvenile Detention Kitchen 639,000 537,187 101,813 Legal Audio Visual 233,000 192,766 40,234 Maintenance of Juveniles 11,549,000 10,289,461 1,259,539

Total judicial 57,153,000 50,873,015 6,279,985

Corrections: Community Corrections 955,000 881,877 73,123 County Clerk Services 772,000 700,277 71,723 Criminal Investigations Dept. 3,193,000 3,069,307 123,693 District Attorney 5,418,000 5,255,364 162,636 Judicial Support 1,410,000 1,248,746 161,254 Medical Examiner 760,708 792,359 (31,651) Office of Support Enforcement 493,000 455,187 37,813 Prison 43,821,786 43,821,785 1 Public Defender 3,763,000 3,651,148 111,852 Register of Wills 591,000 503,905 87,095 Sheriff 3,898,000 3,703,385 194,615 Special Court 135,000 101,595 33,405

Total corrections 65,210,494 64,184,935 1,025,559

Transportation: Southeastern Pennsylvania Transportation Authority Subsidy 6,921,000 6,921,000 -

(continued)

95 County of Delaware, Pennsylvania Schedule of Expenditures Compared to Budget (GAAP Basis) General Fund For the Year Ended December 31, 2014

Variances Final Positive Budget Actual (Negative)

Other: Agricultural Extension Service $ 138,000 $ 137,455 $ 545 Civil Defense 616,000 532,470 83,530 Employee Benefits 35,317,000 33,430,898 1,886,102 Insurance 5,755,000 4,721,790 1,033,210 Other County Expenditures 1,474,000 1,472,619 1,381 Other Programs and Grants 6,447,227 6,440,430 6,797 Soil Conservation 223,000 216,565 6,435 Training Center 226,000 198,439 27,561

Total other 50,196,227 47,150,666 3,045,561

Debt service: Principal 16,865,000 16,861,294 3,706

Interest 7,450,000 7,446,237 3,763

Total expenditures $ 228,977,000 $ 216,583,696 $ 12,393,304

THIS PAGE INTENTIONALLY LEFT BLANK

County of Delaware, Pennsylvania

Health and Human Service Funds Description of Sub-Funds For the Year Ended December 31, 2014

Health and Human Service Funds are maintained to account for the proceeds of specific revenue sources that are legally or administratively restricted to expenditures for specified purposes.

The following Health and Human Service Sub-Funds are utilized by the County:

Special Grants Fund: To account for the operations and administration of the County Special Grant Programs. Financing is provided by state and federal grants.

Mental Health and Mental Retardation Funds (“MH/MR”) and Drug Abuse Funds: To account for operations and administration of County MH/MR and Drug and Alcohol Department. Financing is provided by state and federal grants with an appropriation from the County General Fund.

Day Care and Child Care Funds: To account for the operations and administration of the County Children and Youth Services Department. Financing is provided by state and federal grants with an appropriation from the County General Fund.

98 County of Delaware, Pennsylvania Combining Balance Sheet Schedule Health and Human Service Sub-funds December 31, 2014

Special Mental Mental Grants Health Retardation

Assets

Cash and cash equivalents $ 12,762,946 $ - $ - Restricted cash 5,197,494 - - Grants receivable 5,863,355 453,198 - Due from other funds 3,000,951 7,957,891 4,599,237 Other assets 1,943,166 - -

Total assets $ 28,767,912 $ 8,411,089 $ 4,599,237

Liabilities and Fund Balance

Liabilities Vouchers and accounts payable $ 1,896,371 $ 8,005,273 $ 1,948,509 Due to other funds 39,099 - - Unearned revenues 22,503,587 363,594 2,568,050 Other liabilities 4,328,855 42,222 82,678

Total liabilities 28,767,912 8,411,089 4,599,237

Fund Balance - - -

Total liabilities and fund balance $ 28,767,912 $ 8,411,089 $ 4,599,237

99 County of Delaware, Pennsylvania Combining Balance Sheet Schedule Health and Human Service Sub-funds December 31, 2014

Drug Child Day Abuse Care Care Total

$ - $ - $ - $ 12,762,946 - - - 5,197,494 1,699,750 15,990,846 32,214 24,039,363 - - 2,934,688 18,492,767 - 1,500 - 1,944,666

$ 1,699,750 $ 15,992,346 $ 2,966,902 $ 62,437,236

$ 851,649 $ 3,131,209 $ 6,991 $ 15,840,002 828,864 10,858,254 - 11,726,217 - 670,365 - 26,105,596 19,237 1,332,518 2,959,911 8,765,421

1,699,750 15,992,346 2,966,902 62,437,236

- - - -

$ 1,699,750 $ 15,992,346 $ 2,966,902 $ 62,437,236

100 County of Delaware, Pennsylvania Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance Health and Human Service Sub-funds Year Ended December 31, 2014

Special Mental Mental Grants Health Retardation

Revenues Health and human service grants $ 113,447,656 $ 36,207,482 $ 12,678,269

Expenditures Current, Health and human services 113,718,459 36,971,803 12,678,269

Deficiency of Revenues Over Expenditures (270,803) (764,321) -

Other Financing Sources (Uses) Transfers in 6,859,288 764,321 - Transfers out (6,588,485) - -

Total other financing sources, net 270,803 764,321 -

Net Change in Fund Balances - - -

Fund Balance, Beginning - - -

Fund Balance, Ending $ - $ - $ -

101 Drug Child Day Abuse Care Care Total

$ 6,530,130 $ 34,709,442 $ 41,340,302 $ 244,913,281

6,635,090 39,992,357 41,340,302 251,336,280

(104,960) (5,282,915) - (6,422,999)

104,960 5,282,915 - 13,011,484 - - - (6,588,485)

104,960 5,282,915 - 6,422,999

- - - -

$ - $ - $ - $ -

102

THIS PAGE INTENTIONALLY LEFT BLANK

103

County of Delaware, Pennsylvania

Nonmajor Governmental Funds Special Revenue Funds Description of Funds Year Ended December 31, 2014

Special Revenue Funds are maintained to account for the proceeds of specific revenue sources that are legally or administratively restricted to expenditures for specified purposes.

The following Special Revenue Funds are utilized by the County:

OET Fund and Other Grant Funds: To account for the operations and administration of the County’s employment and training program and other miscellaneous federal and state grants.

Library Fund: To account for the operations and administration of the County Library. Financing is provided by state and federal grants.

911 Fund: To account for the operations of the County’s emergency communication department.

Liquid Fuels Fund: To account for the maintenance of County bridges and allocations to local municipalities for street and road maintenance. Financing is provided by the County’s share of state gasoline taxes.

COSA Fund: To account for the operations and administration of the County Senior Citizens Department. Financing is provided by private contributions, state and federal grants and an appropriation from the County General Fund.

CDBG/Rehab Fund: To account for development and rehabilitation grants formerly administered by the Delaware County Redevelopment Authority (“DCRA”). Financing is provided principally from federal grants.

Marcellus Shale Fund: To account for Act 13 of 2012 impact fees from Marcellus Shale gas drilling activities. The monies are restricted to be spent on one of 13 categories named within the law.

104 County of Delaware, Pennsylvania Combining Balance Sheet Nonmajor Governmental Funds - Special Revenue Funds December 31, 2014

OET/Other 911 Library

Assets Cash and cash equivalents $ 816,394 $ 221,587 $ 2,644,587 Grants receivable 1,023,798 486,955 - Due from other funds 3,019,982 - - Notes receivable - - - Restricted assets - - - Other assets 53,728 - 13,918

Total $ 4,913,902 $ 708,542 $ 2,658,505

Liabilities and Fund Balance

Liabilities Vouchers and accounts payable $ 1,040,194 $ - $ 113,796 Due to other funds 12,280 378,357 1,935,037 Unearned revenues 3,693,165 - - Other liabilities 168,263 330,185 -

Total liabilities 4,913,902 708,542 2,048,833

Fund Balances Restricted for: Highways and streets - - - Infrastructure - - - Library - - 609,672 Community development - - -

Total fund balance - - 609,672

Total $ 4,913,902 $ 708,542 $ 2,658,505

105 Liquid CDBG/ Marcellus Fuels COSA Rehab Shale Total

$ 1,825,944 $ 250 $ 116,258 $ - $ 5,625,020 - 1,798,692 - - 3,309,445 497,305 4,786,813 137,063 - 8,441,163 - - 5,639,008 - 5,639,008 - - - 3,794,867 3,794,867 - - - - 67,646

$ 2,323,249 $ 6,585,755 $ 5,892,329 $ 3,794,867 $ 26,877,149

$ 892,793 $ 1,444,112 $ 1,880,378 $ 11,261 $ 5,382,534 - 530,789 27,226 302,094 3,185,783 - 4,229,641 - 3,443,154 11,365,960 - 381,213 23,086 - 902,747

892,793 6,585,755 1,930,690 3,756,509 20,837,024

1,430,456 - - - 1,430,456 - - - 38,358 38,358 - - - - 609,672 - - 3,961,639 - 3,961,639

1,430,456 - 3,961,639 38,358 6,040,125

$ 2,323,249 $ 6,585,755 $ 5,892,329 $ 3,794,867 $ 26,877,149

106 County of Delaware, Pennsylvania Combining Statement of Revenues, Expenditures, and Changes in Fund Balance Nonmajor Governmental Funds - Special Revenue Funds Year Ended December 31, 2014

OET/Other 911 Library

Revenues General grants $ 10,846,014 $ 8,598,346 $ 2,299,709

Expenditures Current: Highways, streets and bridges - - - Other 10,086,014 15,572,202 2,372,635

Total expenditures 10,086,014 15,572,202 2,372,635

Excess (Deficiency) of Revenues Over Expenditures 760,000 (6,973,856) (72,926)

Other Financing Sources Transfers in - 6,973,856 - Transfers out (760,000) - -

Net Change in Fund Balance - - (72,926)

Fund Balance, Beginning - - 682,598

Fund Balance, Ending $ - $ - $ 609,672

107 Liquid CDBG/ Marcellus Fuels COSA Rehab Shale Total

$ 1,209,264 $ 16,311,978 $ 5,522,744 $ 423,134 $ 45,211,189

1,555,907 - - - 1,555,907 - 16,432,978 5,358,762 93,416 49,916,007

1,555,907 16,432,978 5,358,762 93,416 51,471,914

(346,643) (121,000) 163,982 329,718 (6,260,725)

- 121,000 - 8,640 7,103,496 - - - (300,000) (1,060,000)

(346,643) - 163,982 38,358 (217,229)

1,777,099 - 3,797,657 - 6,257,354

$ 1,430,456 $ - $ 3,961,639 $ 38,358 $ 6,040,125

108 County of Delaware, Pennsylvania Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Liquid Fuels Fund Year Ended December 31, 2014 Variance with Final Budget - Budget Actual Positive Original Final Amounts (Negative)

Revenues, General grants $ 1,295,000 $ 1,604,000 $ 1,209,264 $ (394,736)

Expenditures, Current, Liquid Fuels 2,013,000 2,586,000 1,555,907 1,030,093

(Deficiency) Excess of Revenues Over Expenditures (718,000) (982,000) (346,643) 635,357

Fund Balance, Beginning 1,777,099 1,777,099 1,777,099 -

Fund Balance, Ending $ 1,059,099 $ 795,099 $ 1,430,456 $ 635,357

109

County of Delaware, Pennsylvania

Capital Projects Funds Description of Sub-Funds Year Ended December 31, 2014

Capital Projects Funds are maintained to account for the financial resources received and used to acquire assets of a relatively permanent nature. The following Capital Projects Sub-Funds are utilized by the County:

Food Services Facility Fund: The Food Services Facility Fund was established to account for the proceeds of a settlement awarded in a suit against the designers of the Food Service Facility. The County has assigned the proceeds for various capital projects.

General Capital Projects Fund: The General Capital Projects Fund was established to account for the proceeds and related investment income of the County’s General Obligation Bond issues. Projects financed by these issues include expansion of the County Prison, renovations of the emergency communications center, and major Court House renovations.

110 County of Delaware, Pennsylvania Combining Balance Sheet Schedule Capital Projects Sub-funds December 31, 2014

Food General Services Capital Facility Projects Fund Fund Total

Assets

Assets Cash and cash equivalents $ 430,785 $ 940,919 $ 1,371,704 Restricted cash and cash equivalents - 21,974,725 21,974,725 Due from PennDOT - - - Due from other funds - - - Due from Solid Waste Authority - 5,475,000 5,475,000

Total assets $ 430,785 $ 28,390,644 $ 28,821,429

Liabilities and Fund Balances

Liabilities Vouchers and accounts payable $ 6,761 $ 683,877 $ 690,638 Due to other funds - 13,957,325 13,957,325

Total liabilities 6,761 14,641,202 14,647,963

Fund Balances Nonspendable, Long term receivable - 5,475,000 5,475,000 Restricted for, Capital projects - 8,274,442 8,274,442 Assigned to, Capital projects 424,024 - 424,024

Total fund balances 424,024 13,749,442 14,173,466

Total liabilities and fund balance $ 430,785 $ 28,390,644 $ 28,821,429

111 County of Delaware, Pennsylvania Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances Capital Projects Sub-funds Year Ended December 31, 2014

Food General Services Capital Facility Projects Fund Fund Total

Revenues Investment earnings $ 1,797 $ 271,024 $ 272,821 General grants - 81,308 81,308

Total revenues 1,797 352,332 354,129

Expenditures Capital outlay 86,989 10,714,521 10,801,510 Debt service, principal - 38,515,528 38,515,528 Debt service, interest - 798,961 798,961 Debt issuance costs - 210,529 210,529

Total expenditures 86,989 50,239,539 50,326,528

Excess (Deficiency) of Revenues Over Expenditures (85,192) (49,887,207) (49,972,399)

Other Financing Sources (Uses) Issuance of refunding note - 38,726,057 38,726,057 Transfers out - - -

Total other financing sources - 38,726,057 38,726,057

Net Change in Fund Balance (85,192) (11,161,150) (11,246,342)

Fund Balance, Beginning 509,216 24,910,592 25,419,808

Fund Balance, Ending $ 424,024 $ 13,749,442 $ 14,173,466

112

Combining Statements and Schedules Internal Service Funds

County of Delaware, Pennsylvania

Internal Service Funds Description of Funds Year Ended December 31, 2014

The County maintains three Internal Service Funds. Internal Service Funds are maintained to account for the financing of goods or services provided by one department or agency to other departments or agencies of the governmental unit, on a cost-reimbursement basis. A description of the Internal Service Funds used by the County is as follows:

Self-Funded Health Insurance Fund: To account for the operations of the County’s health insurance program.

Self-Funded Workers’ Compensation Fund: To account for the operations of the County’s workers’ compensation insurance program.

Self-Funded Casualty/Liability Fund: To account for the operations of the County’s casualty/liability insurance program.

Financing for the County’s three Internal Service Funds is provided principally by transfers from other funds.

113 County of Delaware, Pennsylvania Combining Statement of Net Position Internal Service Funds December 31, 2014

Self-funded Self-funded Self-funded Health Workers' Casualty/ Insurance Compensation Liability Fund Fund Fund Total

Current Assets

Cash and cash equivalents $ 471,214 $ 995,632 $ 2,508,351 $ 3,975,197 Prepaid expenses - - 1,913,434 1,913,434 Due from other funds 4,145,933 - - 4,145,933

Total current assets $ 4,617,147 $ 995,632 $ 4,421,785 $ 10,034,564

Current Liabilities and Net Position

Current Liabilities Claims payable $ 4,617,147 $ 291,122 $ 465,063 $ 5,373,332 Due to governmental funds - 704,510 3,956,722 4,661,232

Total current liabilities 4,617,147 995,632 4,421,785 10,034,564

Net Position - - - -

Total liabilities and net position $ 4,617,147 $ 995,632 $ 4,421,785 $ 10,034,564

114 County of Delaware, Pennsylvania Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds Year Ended December 31, 2014

Self-funded Self-funded Self-funded Health Workers' Casualty/ Insurance Compensation Liability Fund Fund Fund Total

Operating Revenues Charges for services $ 39,643,038 $ 1,779,506 $ 5,020,838 $ 46,443,382

Operating Expenses Insurance claims 39,643,038 1,629,396 5,021,116 46,293,550 Administration - 150,219 - 150,219

Total operating expenses 39,643,038 1,779,615 5,021,116 46,443,769

Operating Loss - (109) (278) (387)

Nonoperating Revenue Investment earnings - 109 278 387

Change in Net Position - - - -

Net Position, Beginning - - - -

Net Position, Ending $ - $ - $ - $ -

115 County of Delaware, Pennsylvania Combining Statement of Cash Flows Internal Service Funds Year Ended December 31, 2014

Self-funded Self-funded Self-funded Health Workers' Casualty/ Insurance Compensation Liability Fund Fund Fund Total

Cash Flows from Operating Activities Receipts from customers and users $ 41,364,363 $ 2,889,524 $ 5,665,724 $ 49,919,611 Payments to suppliers (40,919,450) (2,889,524) (5,665,724) (49,474,698)

Net cash provided by operating activities 444,913 - - 444,913

Cash Flows Provided by Investing Activities Interest received - 109 278 387

Net increase in cash and cash equivalents 444,913 109 278 445,300

Cash and Cash Equivalents, Beginning 26,301 995,523 2,508,073 3,529,897

Cash and Cash Equivalents, Ending $ 471,214 $ 995,632 $ 2,508,351 $ 3,975,197

Reconciliation of Operating Loss to Net Cash Provided by Operating Activities Operating loss $ - $ (109) $ (278) $ (387) Adjustments to reconcile operating loss to net cash provided by operating activities: Increase in due to other funds 1,721,325 1,110,018 644,886 3,476,229 Decrease in prepaid expenses (190,110) (190,110) Decrease in claims payable (1,276,412) (1,109,909) (454,498) (2,840,819)

Total adjustments 444,913 109 278 445,300

Net Cash Provided by Operating Activities $ 444,913 $ - $ - $ 444,913

116

Combining Statements and Schedules Component Units

County of Delaware, Pennsylvania

Component Units Description of Component Units Year Ended December 31, 2014

Economic Development Oversight Board: To encourage economic development in Delaware County by facilitating the retention of existing business, the formation of new business, and the vitality of all business within the County of Delaware

Solid Waste Authority: To provide waste disposal almost entirely for citizens of Delaware County.

Redevelopment Authority: To deliver services to County residents, pursuant to the Urban Redevelopment Law, Act of 1945. The Redevelopment Authority acts as the vehicle for condemnation and development within the County.

Waterfront Industrial Development Authority: To acquire, construct, finance, improve and maintain industrial and commercial development projects and public facilities in certain geographic regions within the City of Chester.

117 County of Delaware, Pennsylvania Combining Statement of Net Position Component Units December 31, 2014

Economic Waterfront Development Solid Industrial Oversight Waste Redevelopment Development Board Authority Authority Authority Total

Assets Cash and cash equivalents $ 240,941 $ 10,307,915 $ 4,059,995 $ 61,480 $ 14,670,331 Receivables (net of allowance for uncollectibles): Accounts - 4,501,613 338,538 - 4,840,151 Notes 184,062 - - - 184,062 Other 454,677 44,525 2,000 - 501,202 Inventories - 128,178 - - 128,178 Other assets 43,506 1,436,833 26,313 - 1,506,652 Investments - 8,028,805 - - 8,028,805 Restricted cash and cash equivalents 299,931 5,000,000 - - 5,299,931 Capital assets (net of accumulated depreciation): Land - 7,000,000 1,024,199 849,286 8,873,485 Land improvements - 3,549,330 - - 3,549,330 Construction in progress - 1,639,255 - - 1,639,255 Buildings and improvements - 28,241,059 - 24,470,832 52,711,891 Equipment - 759,250 - - 759,250

Total assets $ 1,223,117 $ 70,636,763 $ 5,451,045 $ 25,381,598 $ 102,692,523

Liabilities Accounts payable and other current liabilities $ 12,422 $ 5,393,299 $ 165,460 $ - $ 5,571,181 Due to primary government - 7,475,000 - - 7,475,000 Unearned revenue 75,000 - 43,923 - 118,923 Long-term liabilities: Due within one year, Bonds and notes payable - 957,000 - - 957,000 Due in more than one year: Bonds and notes payable - 10,448,000 - - 10,448,000 Accrued closure costs - 14,270,911 - - 14,270,911

Total liabilities 87,422 38,544,210 209,383 - 38,841,015

Net Position Net investment in capital assets - 29,783,894 1,024,199 25,320,118 56,128,211 Restricted for: Economic development 426,638 - - - 426,638 Solid waste - 5,000,000 - - 5,000,000 Unrestricted 709,057 (2,691,341) 4,217,463 61,480 2,296,659

Total net position 1,135,695 32,092,553 5,241,662 25,381,598 63,851,508

Total liabilities and net position $ 1,223,117 $ 70,636,763 $ 5,451,045 $ 25,381,598 $ 102,692,523

118 County of Delaware, Pennsylvania Combining Statement of Activities Component Units Year Ended December 31, 2014

Net (Expense) Revenue and Program Revenues Changes in Net Position Economic Waterfront Charges Operating Development Solid Industrial for Grants and Oversight Waste Redevelopment Development Expenses Services Contributions Board Authority Authority Authority Total

Functions/Programs Economic Development Oversight Board, Public works $ 697,539 $ 97,813 $ 547,838 $ (51,888) $ - $ - $ - $ (51,888) Solid Waste Authority, Public works 38,550,456 34,822,563 171,038 - (3,556,855) - - (3,556,855) Redevelopment Authority, Public works 11,657,654 2,000 11,370,185 - - (285,469) - (285,469) Waterfront Industrial Authority, Public works 978,834 - - - - - (978,834) (978,834)

Total component units $ 51,884,483 $ 34,922,376 $ 12,089,061 (51,888) (3,556,855) (285,469) (978,834) (4,873,046)

General Revenues Unrestricted investment earnings 5,825 22,999 265 7 29,096

Change in net position (46,063) (3,533,856) (285,204) (978,827) (4,843,950)

Net Position, Beginning 1,181,758 35,626,409 5,526,866 26,360,425 68,695,458

Net Position, Ending $ 1,135,695 $ 32,092,553 $ 5,241,662 $ 25,381,598 $ 63,851,508

119

THIS PAGE INTENTIONALLY LEFT BLANK

120

Capital Assets by Function

County of Delaware, Pennsylvania Schedule of Changes in Capital Assets by Function For the Year Ended December 31, 2014

Changes in Capital Assets January 1, December 31, 2014 Additions Disposals 2014

General government and judicial $ 211,287,523 $ 8,416,444 $ 482,355 $ 219,221,612 Recreation 12,332,743 72,932 - 12,405,675 Corrections 109,409,447 9,607 51,658 109,367,396 Health and human services 11,397,726 399,364 61,805 11,735,285 Infrastructure 7,953,779 843,084 - 8,796,863 Other 1,622,800 12,216 23,151 1,611,865

Total $ 354,004,018 $ 9,753,647 $ 618,969 $ 363,138,696

Ending Balance is Composed of Land and Buildings and Improvements Improvements Equipment Total

General government and judicial $ 8,960,839 $ 126,265,034 $ 83,995,739 $ 219,221,612 Recreation 6,126,803 4,769,661 1,509,211 12,405,675 Corrections 5,425,643 96,818,312 7,123,441 109,367,396 Health and human services 216,698 904,332 10,614,255 11,735,285 Infrastructure 8,796,863 - - 8,796,863 Other - - 1,611,865 1,611,865

Total $ 29,526,846 $ 228,757,339 $ 104,854,511 $ 363,138,696

121

THIS PAGE INTENTIONALLY LEFT BLANK

122

Statistical Section

County of Delaware, Pennsylvania

Statistical Section

The statistical section presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information reflect about the County’s overall financial health.

Contents

Financial Trends Tables 1 through 4 contain trend information to help the reader understand how the County’s financial performance and strength have changed over time.

Revenue Capacity Tables 5 through 8 contain information to help the reader assess the County’s most significant local revenue source, the property tax.

Debt Capacity Tables 9 through 11 present information to help the reader assess the affordability of the County’s current level of outstanding debt and the County’s ability to issue additional debt in the future.

Demographic and Economic Information Tables 12 and 13 offer demographic and economic indicators to help the reader understand the environment within which the County’s financial activities take place.

Operating Information Tables 14 through 16 contain service data to help the reader understand how the information in the County’s financial report relates to the services the County provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules was derived from the County’s audited annual financial reports from relevant years.

123 County of Delaware, Pennsylvania Net Position by Component, Government-wide Table 1 Last Ten Fiscal Years (Accrual Basis of Accounting) (Unaudited)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Governmental Activities Net investment in capital assets $ (95,191,508) $ (101,388,207) $ (102,249,460) $ (100,753,289) $ (96,331,704) $ (97,119,597) $ (86,608,478) $ (73,172,651) $ (67,891,655) $ (60,035,609) Restricted: Highways and streets 2,394,759 1,878,478 2,123,560 2,077,672 1,873,935 2,117,979 2,045,289 1,856,882 1,777,099 1,430,456 Infrastructure 38,358 Library 1,183,200 1,920,913 2,311,124 2,551,221 2,269,284 3,002,528 2,181,260 1,859,136 682,598 609,672 Community development 4,305,353 3,314,414 3,800,278 3,909,636 3,665,564 3,406,100 3,587,712 2,847,493 3,797,657 3,961,639 Title IV D program 4,640,403 2,057,055 1,575,771 1,377,273 1,595,222 724,447 823,268 1,232,444 1,870,555 426,047 Capital projects ------2,293,963 2,346,683 - Unrestricted 120,284,939 133,308,339 127,552,069 126,877,989 87,488,307 73,417,283 65,787,670 59,685,325 48,510,910 47,272,306

Total governmental activities net position $ 37,617,146 $ 41,090,992 $ 35,113,342 $ 36,040,502 $ 560,608 $ (14,451,260) $ (12,183,279) $ (3,397,408) $ (8,906,153) $ (6,297,131)

Business-Type Activity Net investment in capital assets $ (6,323,193) $ (9,350,955) $ (12,212,924) $ (14,674,792) $ (16,954,126) $ (19,420,689) $ (20,980,693) $ (21,708,469) $ (21,213,250) $ (20,594,380) Unrestricted 18,796,716 20,140,927 19,369,675 20,325,287 17,807,213 19,420,689 20,980,693 21,708,469 21,213,250 20,594,380

Total business-type activity net position $ 12,473,523 $ 10,789,972 $ 7,156,751 $ 5,650,495 $ 853,087 $ - $ - $ - $ - $ -

Primary Government Net investment in capital assets $ (101,514,701) $ (110,739,162) $ (114,462,384) $ (115,428,081) $ (113,285,830) $ (116,540,286) $ (107,589,171) $ (94,881,120) $ (89,104,905) $ (80,629,989) Restricted 12,523,715 9,170,860 9,810,733 9,915,802 9,404,005 9,251,054 8,637,529 10,089,918 10,474,592 6,466,172 Unrestricted 139,081,655 153,449,266 146,921,744 147,203,276 105,295,520 92,837,972 86,768,363 81,393,794 69,724,160 67,866,686

Total primary government net position $ 50,090,669 $ 51,880,964 $ 42,270,093 $ 41,690,997 $ 1,413,695 $ (14,451,260) $ (12,183,279) $ (3,397,408) $ (8,906,153) $ (6,297,131)

Source: Comprehensive Annual Financial Reports

124 County of Delaware, Pennsylvania Changes in Net Position, Government-wide Table 2 Last Ten Fiscal Years (Accrual Basis of Accounting) (Unaudited)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Expenses Governmental activities: General government $ 99,334,379 $ 101,251,251 $ 117,149,254 $ 105,578,345 $ 124,365,790 $ 143,983,937 $ 130,302,387 $ 124,851,749 $ 130,258,805 $ 141,161,340 Judicial 43,789,710 47,812,915 50,453,563 50,988,095 52,473,162 52,360,413 45,844,482 48,381,276 48,371,935 47,072,546 Corrections 47,187,711 59,281,918 63,074,977 65,463,589 67,071,482 67,891,398 68,876,004 69,457,964 70,790,012 71,432,033 Health and human services 249,305,686 277,962,381 289,027,665 306,991,797 282,321,631 248,889,415 245,274,186 245,077,186 248,301,666 251,336,280 Highways, streets and bridges 1,597,576 3,716,405 5,721,522 5,904,881 7,968,517 1,924,872 2,333,302 13,130,022 2,807,351 2,187,625 Interest on long-term debt 12,086,302 13,448,024 13,914,920 10,449,791 9,638,681 9,198,303 8,637,786 8,794,312 8,457,413 8,123,155

Total governmental activities expenses 453,301,364 503,472,894 539,341,901 545,376,498 543,839,263 524,248,338 501,268,147 509,692,509 508,987,182 521,312,979

Business-type activities, Geriatric Center 70,727,632 70,727,632 71,623,512 73,142,781 75,824,685 78,716,756 81,376,108 81,863,752 80,763,126 77,855,996

Total primary government expenses 524,028,996 574,200,526 610,965,413 618,519,279 619,663,948 602,965,094 582,644,255 591,556,261 589,750,308 599,168,975

Program Revenues Governmental activities: Charges for services: General government 9,405,736 10,144,210 10,343,702 9,097,908 9,446,492 9,004,999 10,273,501 11,581,252 10,410,962 8,916,675 Judicial 6,010,039 5,807,969 5,941,578 6,430,569 6,062,227 5,708,978 5,006,264 5,280,673 5,206,386 5,137,583 Corrections 5,138,292 7,503,489 6,454,886 7,885,594 7,978,858 8,870,808 8,501,485 8,878,377 12,500,228 11,696,677 Capital grants and contributions ------2,514,224 9,863,638 1,462,919 81,308 Operating grants and contributions 305,342,928 332,347,761 353,621,998 356,488,933 356,221,618 324,337,383 315,358,881 315,233,611 302,984,285 315,864,486

Total governmental activities program revenues 325,896,995 355,803,429 376,362,164 379,903,004 379,709,195 347,922,168 341,654,355 350,837,551 332,564,780 341,696,729

Business-type activity, Capital grants and contributions ------91,281 379,719 - - Geriatric Center - charges for services 71,128,756 73,586,518 69,659,057 73,391,222 72,611,507 72,111,626 73,517,671 74,681,667 75,172,541 75,783,231

Total primary government program revenues 397,025,751 429,389,947 446,021,221 453,294,226 452,320,702 420,033,794 415,263,307 425,898,937 407,737,321 417,479,960

125 County of Delaware, Pennsylvania Changes in Net Position, Government-wide Table 2 Last Ten Fiscal Years (Accrual Basis of Accounting) (Unaudited)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Net (Expense) Revenue Governmental activities $ (127,404,369) $ (147,669,465) $ (162,979,737) $ (164,130,068) $ (164,130,068) $ (176,326,170) $ (159,613,792) $ (158,854,958) $ (176,422,402) $ (179,616,250)

Business-type activity 401,124 (870,283) (1,964,455) 248,441 (3,213,178) (6,605,130) (7,767,156) (6,802,366) (5,590,585) (2,072,765)

Total primary government net expense (127,003,245) (148,539,748) (164,944,192) (163,881,627) (167,343,246) (182,931,300) (167,380,948) (165,657,324) (182,012,987) (181,689,015)

General Revenues and Other Changes in Net Position Governmental activities: Property taxes 129,951,036 134,185,884 132,282,144 144,579,397 143,583,153 154,340,906 155,615,119 160,312,545 164,661,208 172,842,088 Unrestricted investment earnings 4,921,683 9,005,095 8,174,110 4,093,624 3,271,147 2,348,032 2,924,184 2,615,151 2,830,737 2,356,693 Grants and charges not restricted to specific programs 8,888,405 7,952,332 7,966,473 7,874,320 317,723 334,292 359,641 407,693 352,508 494,046 Gaming revenue - - 8,579,360 9,853,313 9,478,151 9,795,345 10,472,563 10,224,170 9,334,840 8,604,779 Transfers - - - - - (5,504,273) (7,489,734) (5,918,730) (4,482,703) (2,072,334)

Total government activities 143,761,124 151,143,311 157,002,087 166,400,654 156,650,174 161,314,302 161,881,773 167,640,829 172,696,590 182,225,272

Business-type activity: Investment earnings 310,143 330,977 376,025 260,548 167,021 247,770 277,422 883,636 1,107,882 431 Interest on long- term debt (926,844) (1,144,245) (2,044,791) (2,015,245) (1,751,251) - (8,123,155) - - Transfers - - - - - 5,504,273 7,489,734 5,918,730 4,482,703 2,072,334

Total business-type activity (616,701) (813,268) (1,668,766) (1,754,697) (1,584,230) 5,752,043 7,767,156 (1,320,789) 5,590,585 2,072,765

Total primary government 143,144,423 150,330,043 155,333,321 164,645,957 155,065,944 167,066,345 169,648,929 166,320,040 178,287,175 184,298,037

Special Item Capital grant to component unit - - - - (28,000,000) - - - - -

Change in Net Position Governmental activities 16,356,755 3,473,846 (5,977,650) 927,160 (35,479,894) (15,011,868) 2,267,981 8,785,871 (3,725,812) 2,609,022

Business-type activity (215,577) (1,683,551) (3,633,221) (1,506,256) (1,584,230) (853,087) - - - -

Total primary government $ 16,141,178 $ 1,790,295 $ (9,610,871) $ (579,096) $ (37,064,124) $ (15,864,955) $ 2,267,981 $ 8,785,871 $ (3,725,812) $ 2,609,022

Source: Comprehensive Annual Financial Reports

126 County of Delaware, Pennsylvania Fund Balances, Governmental Funds Table 3 Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (Unaudited)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

General Fund Nonspendable $ - $ - $ - $ - $ - $ - $ 963,322 $ 562,376 $ 1,381,507 $ 1,144,114 Restricted ------823,268 1,232,444 1,870,555 426,047 Assigned County geriatric center ------11,400,000 11,400,000 11,400,000 12,000,000 Employee healthcare costs ------11,400,000 11,400,000 11,400,000 12,000,000 Unassigned ------9,720,416 10,572,860 9,532,158 16,236,691 Reserved 4,640,403 2,057,055 1,575,771 1,377,273 1,595,222 724,447 - - - - Unreserved 13,601,051 7,338,676 1,576,014 5,136,773 6,296,597 7,433,686 - - - -

Total general fund 18,241,454 9,395,731 3,151,785 6,514,046 7,891,819 8,158,133 34,307,006 35,167,680 35,584,220 41,806,852

All Other Governmental Funds Reserved 13,358,312 12,588,805 13,709,962 14,013,529 13,283,783 14,001,607 - - - -

Unreserved, reported in: Special revenue funds ------Capital projects 44,217,271 32,760,700 17,696,763 42,045,936 32,652,762 28,964,903 - - - -

Nonspendable ------5,475,000 5,475,000 5,475,000 5,475,000 Restricted ------7,814,261 8,857,474 25,692,946 14,314,567 Assigned ------Capital projects ------1,576,451 1,215,875 509,216 424,024 Unassigned Special revenue funds ------Capital projects ------(7,935,282) - - -

Total all other governmental funds 57,575,583 45,349,505 31,406,725 56,059,465 45,936,545 42,966,510 6,930,430 15,548,349 31,677,162 20,213,591

Total all funds $ 75,817,037 $ 54,745,236 $ 34,558,510 $ 62,573,511 $ 53,828,364 $ 51,124,643 $ 41,237,436 $ 50,716,029 $ 67,261,382 $ 62,020,443

Source: Comprehensive Annual Financial Reports

Note: Fiscal years 2005 through 2010 have not been restated to conform with the implementation of GASB Statement 54 in fiscal year 2011. As a result balances for fiscal year 2010 and prior will be classified as nonspendable and restricted, classification that were superseded by the implementation of GASB 54. In addition the $20,080,000 reclassification that was required with the implementation of GASB 54 between the general fund and capital projects fund is not reflected on the above table for fiscal years 2010 and prior.

127 County of Delaware, Pennsylvania Changes in Fund Balances, Governmental Funds Table 4 Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (Unaudited)

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Revenues Real estate taxes $ 171,551,067 $ 164,860,852 $ 159,605,920 $ 155,756,779 $ 156,371,430 $ 144,793,655 $ 143,787,354 $ 132,541,187 $ 133,978,658 $ 131,461,759 Licenses and inspections 17,415 62,948 10,125 36,960 23,828 18,423 27,196 43,256 4,076,013 3,913,832 General grants 69,626,188 69,446,178 81,030,796 79,758,176 81,046,110 76,987,688 73,719,633 78,797,375 81,856,865 82,128,102 Charges for services, fines, and forfeitures 21,915,998 22,860,520 23,371,602 22,000,400 24,016,541 24,809,672 24,635,138 24,079,183 16,698,254 16,015,355 Investment earnings 1,262,735 1,088,573 1,335,689 1,551,162 1,274,357 2,305,591 3,663,365 6,996,936 8,744,726 5,375,479 Gaming revenue 8,604,779 9,334,840 10,224,170 10,472,563 9,795,345 9,478,151 9,853,313 8,579,360 Health & human service grants 244,913,281 234,003,423 238,445,980 239,323,976 235,212,559 262,517,380 285,002,174 269,698,074 256,268,083 227,365,221 Other 9,932,293 8,435,747 11,909,751 8,167,796 9,769,447 8,616,768 15,694,585 14,705,388 11,374,175 11,656,002

Total revenues 527,823,756 510,093,081 525,934,033 517,067,812 517,509,617 529,527,328 556,382,758 535,440,759 512,996,774 477,915,750

Expenditures Current: General government 23,146,549 22,575,866 22,144,960 20,655,471 22,571,879 22,317,237 34,021,728 33,928,746 32,789,094 32,145,731 Judicial 50,873,015 50,000,068 49,969,242 47,472,352 52,241,301 52,370,643 50,903,956 50,378,744 47,738,011 43,801,688 Corrections 64,184,935 63,059,037 63,706,711 64,933,176 63,874,323 63,984,713 62,387,050 60,066,905 54,769,628 44,534,968 Transportation 6,921,000 6,921,000 6,799,396 7,024,827 7,245,074 7,315,678 7,457,681 7,449,793 7,641,654 7,598,392 Health & Human Services 251,336,280 240,428,656 244,872,046 245,787,429 242,129,230 268,947,966 291,472,407 276,135,072 263,068,761 234,616,176 Highways, streets, and bridges 1,555,907 1,187,336 1,385,854 1,248,678 986,357 1,277,450 1,192,055 946,902 1,552,562 982,802 Other 97,066,673 94,686,905 101,708,121 96,179,650 101,227,482 93,685,918 84,604,164 85,438,329 85,709,155 80,444,263 Debt Service: Principal 55,376,822 16,179,257 16,023,160 12,384,941 11,141,297 9,736,996 10,332,490 17,877,853 13,479,490 13,159,469 Interest 8,245,198 8,566,563 8,900,486 8,651,294 9,156,658 10,218,403 10,865,222 13,986,601 13,507,598 11,662,853 Debt issuance costs 210,529 ------Capital outlay 10,801,510 10,460,337 15,026,734 15,302,712 19,320,464 9,858,830 5,171,004 9,592,540 13,812,622 4,522,794

Total expenditures 569,718,418 514,065,025 530,536,710 519,640,530 529,894,065 539,713,834 558,407,757 555,801,485 534,068,575 473,469,136

Excess of Revenues Over (Under) Expenditures (41,894,662) (3,971,944) (4,602,677) (2,572,718) (12,384,448) (10,186,506) (2,024,999) (20,360,726) (21,071,801) 4,446,614

Other Financing Sources (Uses) Transfers in 21,174,980 16,143,991 13,538,768 15,327,150 11,751,849 10,523,980 10,666,376 9,361,932 8,843,531 10,000,000 Transfers out (23,247,314) (20,626,694) (19,457,498) (22,641,639) (17,256,122) (10,523,980) (10,666,376) (9,361,932) (8,843,531) 6,649,718 Redemption of refunded bond - - - - (29,995,000) (61,225,000) (9,497,000) (42,130,000) - (8,051,808) Issuance of bonds and notes 38,726,057 25,000,000 20,000,000 - 15,185,000 28,595,000 30,000,000 - - - Issuance of bond premium - - - - - 104,420 - - - - Issuance of refunding bond - - - - 29,995,000 54,750,000 9,537,000 42,304,000 - - Issuance of refunding bond premium - - - - - 7,216,939 - - - -

Total other financing sources (uses) 36,653,723 20,517,297 14,081,270 (7,314,489) 9,680,727 29,441,359 30,040,000 174,000 - 8,597,910

Special Item Capital grant to component unit - - - - - (28,000,000) - - - -

Net Change in Fund Balances (5,240,939) 16,545,353 9,478,593 (9,887,207) (2,703,721) (8,745,147) 28,015,001 (20,186,726) (21,071,801) 13,044,524

Fund Balance, Beginning 67,261,382 50,716,029 41,237,436 51,124,643 53,828,364 62,573,511 34,558,510 54,745,236 75,817,037 62,772,513

Fund Balance, Ending $ 62,020,443 $ 67,261,382 $ 50,716,029 $ 41,237,436 $ 51,124,643 $ 53,828,364 $ 62,573,511 $ 34,558,510 $ 54,745,236 $ 75,817,037

Debt Service as a percentage of non-capital expenditure 11.36% 4.90% 4.87% 4.16% 3.90% 3.71% 3.93% 6.03% 5.46% 5.54%

Source: Comprehensive Annual Financial Reports

128 County of Delaware, Pennsylvania Assessed Value and Estimated Actual Value of Taxable Property Table 5 Last Ten Years (Unaudited)

Estimated Market Values Less: Total Total Total Total Total Total Tax-Exempt Taxable Direct Fiscal Residential Commercial Industrial and Real Property Property Assessed Value Tax Year Property Property Other Property (000's) (000's) (000's) Rate

2005 Not available Not available Not available $ 29,382,816 $ 3,232,110 $ 26,150,706 4.450 2006 Not available Not available Not available 32,975,131 3,592,315 29,382,816 4.450 2007 Not available Not available Not available 33,232,773 3,605,832 29,626,947 4.450 2008 Not available Not available Not available 33,796,102 3,600,063 30,196,039 4.825 2009 $ 23,824,736 $ 5,472,872 $ 4,600,102 33,897,710 3,604,093 30,273,619 4.825 2010 23,860,373 5,535,242 4,538,767 33,934,382 3,617,684 30,316,698 5.184 2011 23,954,534 5,454,156 4,583,732 33,992,422 3,679,376 30,313,046 5.184 2012 24,040,640 5,437,941 4,602,797 34,081,378 3,694,210 30,387,170 5.304 2013 24,141,041 5,515,209 4,599,166 34,255,416 3,677,062 30,578,354 5.452 2014 24,256,948 5,674,512 4,632,054 34,563,514 3,731,292 30,832,222 5.604

Source: County of Delaware, Pennsylvania Assessment Office

Note: Estimated market values by property type not available for years prior to 2009

129 County of Delaware, Pennsylvania Direct and Overlapping Real Estate Tax Rates Table 6 Last Ten Years As of December 31, 2014 (Rate Per $1,000 of Assessed Value)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

County Direct Rate: General 3.4920 3.4801 3.4801 3.8880 3.8880 4.4020 4.3180 4.3930 4.5100 4.6630 Debt 0.9580 0.9699 0.9699 0.9370 0.9370 0.7820 0.8660 0.9110 0.9420 0.9410

Total direct rate 4.4500 4.4500 4.4500 4.8250 4.8250 5.1840 5.1840 5.3040 5.4520 5.6040

Borough and Township Rates: Aldan Borough 4.6100 5.0470 5.0470 5.2620 5.4199 5.6600 6.1110 6.4104 7.4985 7.4985 Aston Township 2.4800 3.1100 3.1100 3.6500 3.6500 4.0000 4.0000 4.0000 4.0000 4.0000 Bethel Township 0.6000 0.6500 0.6500 0.8500 0.0850 1.8700 1.8650 1.8650 1.8650 1.8650 Brookhaven Township 3.0000 3.5000 3.5000 3.9900 4.3500 4.3500 4.3500 0.8820 4.3500 4.3500 Chadds Ford Township 3.5700 0.7820 0.7820 0.0867 0.7720 0.0900 0.8820 4.3500 0.8820 0.8820 Chester City 297.9200 297.9200 297.9200 297.9200 297.9200 297.9200 297.9200 297.9200 297.9200 297.9200 Chester Heights 0.2200 0.2200 0.2200 0.2200 0.2200 8.8000 0.0580 0.0580 0.0580 0.0580 Chester Township 5.3000 6.3000 6.3000 7.5000 7.5000 7.2000 8.8000 8.0000 9.0000 9.0000 Clifton Heights Borough 9.3990 10.0010 10.0010 11.0010 11.5010 12.0100 12.0010 12.2510 13.0010 13.0010 Coillingdale Borough 6.4560 8.7960 8.7960 9.8960 9.8600 10.7400 11.2370 11.2370 12.2370 12.2370 Colwyn Borough 13.7000 15.1000 15.1000 16.6000 19.9100 20.0200 27.0000 27.0000 27.2000 27.2000 Concorn Township 0.8900 0.8900 0.8900 0.9250 0.9440 0.9400 0.9440 0.0944 0.9440 0.9440 Darby Borough 9.5000 12.0000 12.0000 13.6000 13.7410 13.7400 16.2410 17.7410 17.7409 17.7409 Darby Township 6.5000 6.4850 6.5000 8.6350 8.9100 8.9100 10.9100 10.9100 11.4100 11.4100 East Lansdowne Borough 7.6380 8.6300 8.6300 11.0000 11.0000 11.0000 11.0000 11.3000 11.3000 11.3000 Eddystone Borough 3.5800 5.7500 5.7500 5.7500 5.7500 5.7500 5.7500 5.7500 5.7500 5.7500 Edgmont Township 4.1900 0.5548 0.5548 0.6380 0.6699 0.7200 0.8283 0.8283 0.8283 0.8283 Folcroft Borough 5.0100 5.5000 5.5000 5.5000 6.1000 6.1000 6.1000 6.1000 6.1000 6.1000 Glenolden Borough 7.1000 7.4800 7.4800 7.9200 7.9200 8.4000 8.4000 8.4000 8.4000 8.4000 Haverford Township 4.8380 5.4160 5.4160 6.0850 6.3590 6.3590 6.6890 6.9920 7.3340 7.5400 Lansdowne Borough 8.2000 9.6200 9.6200 10.1780 10.5850 10.8496 11.1210 11.6210 11.9120 12.2096 Lower Chichester Township 3.0000 4.5000 4.5000 6.0000 6.0000 7.2000 7.2000 7.2000 7.2000 7.2000 Marcus Hood Borough 7.3500 7.3500 7.3500 8.3500 9.3500 9.3500 10.8500 12.3500 12.3500 12.3500 Marple Township 3.4000 2.9500 3.4000 3.5800 4.1100 4.1100 4.1840 4.1840 4.2900 4.4100 Media Borough 0.2900 2.0000 2.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 Middletown Township 0.8200 1.3600 1.3600 1.3600 1.6000 1.6000 1.6000 1.6000 1.6000 1.6000 Millbourne 20.0000 21.0000 21.0000 21.0000 23.0000 23.0000 23.0000 23.0000 24.0000 25.6160 Morton Borough 5.9210 6.5130 6.5130 6.5130 6.6610 7.1610 7.1600 8.1610 9.4110 9.6110 Nether Providence Township 3.1900 3.4300 3.4300 3.7600 3.9000 4.0900 4.3700 4.6800 4.7800 4.9200 Newtown Township 1.8600 1.9998 1.9998 2.1175 2.3023 2.5037 2.6640 2.7940 2.7940 2.8840 Norwood Borough 7.2970 7.9610 7.9610 8.0340 10.8220 10.8220 10.8220 10.8220 10.5500 10.5500 Parkside Borough 4.7200 5.9700 5.9700 7.6600 8.3600 8.8600 9.5000 9.5000 9.5000 9.5000 Prospect Park Borough 6.0000 6.3100 6.3100 6.7700 7.2400 7.9200 8.3200 8.3600 9.1200 9.5200 Radnor Township 2.7900 3.0100 3.0100 3.0100 3.3411 3.6411 3.7511 3.7511 3.7511 3.7511 Ridley Park Borough 5.5010 6.1680 6.1680 7.1090 7.4500 7.4500 7.7900 7.7900 8.1400 8.1400 Ridley Township 5.4700 6.3700 6.3700 7.2660 8.0160 8.0160 8.0170 8.0160 8.5160 8.5160 Rose Valley Borough 1.3420 1.4120 1.4120 1.5530 1.7700 1.9400 2.1100 2.3400 2.3000 2.4200 Rutledge 3.3100 3.3100 3.3100 3.6200 4.1500 4.3200 4.6800 5.2800 5.7100 5.7100 Sharon Hill Borough 6.4120 5.9610 6.4120 6.4120 6.4120 7.2400 7.5000 7.5000 7.5000 7.5000 Springfield Township 4.3600 4.3600 4.3600 4.7400 4.9800 4.9800 5.1700 5.3200 5.5860 5.5860 Swarthmore Borough 3.8310 4.1770 4.1770 4.5950 4.8700 5.2020 5.3020 5.4520 5.5890 5.5890 Tinicum Township 3.4000 3.2000 3.2000 3.9000 4.4000 4.4000 4.4000 4.4000 4.4000 4.4000 Trainer Borough 6.5000 6.5000 6.5000 8.0000 10.0000 12.7500 14.7500 14.7500 14.7500 14.7500 Upland Borough 2.0000 2.0000 2.0000 2.0000 2.0000 2.0000 2.0000 5.4520 2.0000 2.0000 Upper Chichester Township 5.2300 5.7300 5.7300 6.3500 5.8500 5.8500 5.3500 5.1000 5.1000 5.1000 Upper Darby Township 11.1200 13.0400 13.0400 14.3400 14.9900 15.9400 16.7900 17.9400 18.9300 19.9200 Upper Providence Township 3.0480 3.0480 3.0480 3.1280 3.4634 3.5490 3.6480 3.7340 3.8030 3.8730 Yeadon Borough 8.1000 9.9900 9.9900 9.8900 8.8900 8.8900 8.8900 9.8900 9.8900 9.8900

School District Rates: Chester-Upland 49.7610 51.3360 51.3360 51.3360 51.3360 51.3360 51.3360 51.3360 51.3360 51.3360 Chichester 26.6000 30.0900 31.4700 33.2950 34.6017 36.2819 37.7350 38.3000 38.6840 39.0708 Granet Valley 22.9810 24.7760 25.6040 26.0790 27.0680 27.8330 28.0260 29.0550 29.2006 29.7440 Haverford 17.7000 19.9400 21.0140 22.1600 23.1020 24.4743 26.0209 26.7305 27.6784 28.6692 Interboro 27.2500 28.6300 29.3500 30.0800 30.8300 31.6000 32.2000 32.2000 32.9406 33.4347 Marple-Newtown 13.1200 14.1400 14.1400 14.5367 15.1327 16.3222 25.1839 17.2199 17.6839 17.6839 Penn Delco 18.6590 20.1450 21.0170 21.6810 22.4220 23.1830 23.8250 24.5490 25.2760 25.9070 Radnor 15.6400 17.3670 18.2359 19.5118 20.2731 20.8681 21.1439 21.8227 21.7122 21.7122 Ridley 25.0000 28.3630 30.0630 31.7760 33.2490 35.5580 37.0310 38.2500 39.1250 39.2500 Rose Tree-Media 17.9481 19.4695 20.1314 21.0977 21.6251 21.6251 22.2522 22.6143 22.9445 23.3677 Southeast Delco 25.0840 29.5840 30.0840 30.0840 31.7840 35.7840 36.4996 36.8246 37.2849 38.4034 Springfield 20.0010 22.4570 23.9130 25.2840 26.2910 27.2230 27.9750 28.7300 29.3000 29.9604 Upper Darby 24.0500 26.5500 27.7700 28.7400 29.7200 30.9000 31.7300 32.8500 33.8150 34.5930 Wallingford Swarthmore 28.2000 32.1300 33.6100 35.9760 36.5660 37.6260 38.1520 39.3340 39.6930 40.5265 William Penn 30.9000 34.0600 35.6300 36.8400 38.4500 40.0600 40.0600 40.0600 41.6000 42.2900

Source: County of Delaware Planning Department, County of Delaware Tax Claim Department, and County of Delaware Budget Department

130 County of Delaware, Pennsylvania Principal Property Taxpayers Table 7 Current Year and Ten Years Ago

2014 2005 Percentage Percentage of Total of Total Assessed Assessed Assessed Assessed Taxpayer Value Value Taxpayer Value Value

Redwood ERC Concord LLC $ 120,256,460 0.40 SDG Macerich Prop. Ltd. $ 93,000,000 0.32

Chester Downs & Marina LLC 118,650,000 0.39 Radnor Center Associates 68,954,300 0.24

Radnor Center Associates 68,954,300 0.16 Radnor Properties LP 62,451,160 0.22

SAP America Inc 57,509,000 0.15 BPG Real Estate 61,000,000 0.21

Exelon Generation Company 52,500,000 0.15 Exelon Generation Company 52,500,000 0.18 . KS Springfield 51,406,800 0.14 SAP America 42,793,600 0.15

White Horse Village 49,058,970 0.14 CNL Retirement 42,000,000 0.15

Radnor Properties 48,965,641 0.14 Radnor Properties 41,637,720 0.15

Campus Investors 35,724,336 0.12 White Horse Village 38,357,000 0.12

Dunwoody Home 31,000,000 0.12 Radnor Properties 35,000,000 0.12

$ 634,025,507 1.91 $ 537,693,780 1.86

Source: County of Delaware, Pennsylvania Assessment Office

131 County of Delaware, Pennsylvania Property Tax Levies and Collections Table 8 Last Ten Years (Unaudited)

Taxes Levied Adjusted Collections Within the Within the Taxes Levied Fiscal Year of the Levy Collections Total Collections Fiscal Fiscal Year for the Percentage in Subsequent Percentage Year of the Levy Fiscal Year Amount of Levy Years Amount of Levy

2005 $ 131,461,759 $ 129,598,563 $ 123,852,831 95.6% $ 2,975,841 $ 126,828,672 97.9% 2006 132,481,443 130,728,257 127,218,986 97.3% 2,825,477 130,044,463 99.5% 2007 132,759,942 131,839,023 127,269,898 96.5% 2,697,314 129,967,212 98.6% 2008 144,800,000 144,796,199 139,522,134 96.4% 1,937,327 141,459,461 97.7% 2009 145,696,574 145,303,995 139,193,850 95.8% 2,434,883 141,628,733 97.5% 2010 156,843,125 156,775,703 149,741,101 95.5% 3,490,784 153,231,885 97.7% 2011 160,699,548 157,648,907 153,602,147 97.4% 3,174,243 156,776,390 99.4% 2012 160,764,044 160,579,733 153,849,835 95.8% 4,941,592 158,791,427 98.9% 2013 166,414,943 166,258,998 159,849,174 96.1% 1,952,412 161,801,586 97.3% 2014 172,732,089 172,242,510 166,260,056 96.5% - 166,260,056 96.5%

Source: County Assessment Office and County of Delaware, Pennsylvania, financial statements County Tax Claim Bureau

132 County of Delaware Pennsylvania Ratio of Outstanding Debt by Type Table 9 Last Ten Years (Unaudited)

General Bonded Debt Outstanding General Governmental Activities Deep Discount Percentage of Percentage of General Bonds Net of Total Personal Actual Total Fiscal Obligation Unamortized Business-Type Primary Income Per Value of Year Debt Discount Activity Government (a) Capita (a) Property (b)

2014 $ 293,615,899 $ - $ 31,791,051 $ 325,406,950 1.7 % 578 1.1 % 2013 312,386,052 - 33,095,319 345,481,371 1.9 603 1.0 2012 305,244,141 - 34,975,174 340,219,315 1.9 594 1.0 2011 291,337,128 2,420,465 36,072,872 329,830,465 1.8 589 1.0 2010 303,750,990 4,694,951 34,636,010 343,081,951 1.9 614 1.0 2009 305,135,826 6,830,638 27,218,174 339,184,638 1.9 608 1.1 2008 290,912,162 8,834,923 27,276,838 327,023,923 1.7 583 1.1 2007 269,666,826 10,718,947 27,071,174 307,456,947 1.7 553 1.0 2006 288,137,297 12,489,753 26,137,704 326,764,754 1.9 588 1.1 2005 300,458,936 14,151,143 25,551,064 340,161,143 2.1 612 1.3

(a) - See Table 12 for population data. (b) - See Table 5 for property value data.

Source: Comprehensive Annual Financial Reports

133 County of Delaware, Pennsylvania Direct and Overlapping Governmental Activities Debt Table 10 As of December 31, 2014 (Unaudited)

Estimated Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding Applicable Debt

County of Delaware $ 293,615,899 100% $ 293,615,899

(Municipality): Aston Twp 4,609,000 100% 4,609,000 Bethel Township 776,380 100% 776,380 Brookhaven Twp 3,371,909 100% 3,371,909 Chester City 30,950,154 100% 30,950,154 Clifton Heights Borough 1,860,492 100% 1,860,492 Concord Township 11,871,538 100% 11,871,538 Darby Borough 6,700,000 100% 6,700,000 Darby Township 401,865 100% 401,865 Eddystone Borough 3,186,000 100% 3,186,000 Folcroft Borough 89,630 100% 89,630 Glenolden Borough 1,237,539 100% 1,237,539 Haverford Township 45,170,000 100% 45,170,000 Lansdowne Borough 3,505,840 100% 3,505,840 Lower Chichester Township 238,173 100% 238,173 Marcus Hook Borough 1,661,528 100% 1,661,528 Marple Township 4,134,108 100% 4,134,108 Media Borough 5,620,000 100% 5,620,000 Middletown Township 10,280,000 100% 10,280,000 Morton Borough 802,528 100% 802,528 Nether Providence Twp. 5,602,287 100% 5,602,287 Newtown Township 2,803,323 100% 2,803,323 Norwood Borough 1,418,814 100% 1,418,814 Parkside Borough 440,137 100% 440,137 Prospect Park Borough 1,536,714 100% 1,536,714 Radnor Township 56,915,000 100% 56,915,000 Ridley Park Borough 1,363,022 100% 1,363,022 Ridley Township 14,411,857 100% 14,411,857 Rutledge Borough 153,725 100% 153,725 Springfield Township 4,204,000 100% 4,204,000 Swarthmore Borough 2,358,817 100% 2,358,817 Thonbury Township 204,677 100% 204,677 Tinicum Township 4,647,000 100% 4,647,000 Upland Borough 1,798,586 100% 1,798,586 U. Chichester Township 4,397,071 100% 4,397,071 Upper Darby Township 13,940,000 100% 13,940,000 Upper Providence Township 4,328,362 100% 4,328,362 Yeadon Borough 3,416,000 100% 3,416,000 260,406,076

(continued)

134 County of Delaware, Pennsylvania Direct and Overlapping Governmental Activities Debt Table 10 As of December 31, 2013 (Unaudited)

Estimated Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding Applicable Debt

(School District): Chester-Upland $ 81,264,377 100% $ 81,264,377 Chichester 64,041,826 100% 64,041,826 Garnet Valley 85,316,097 100% 85,316,097 Haverford 124,000,402 100% 124,000,402 Interboro 40,645,000 100% 40,645,000 Marple-Newtown 89,275,000 100% 89,275,000 Penn Delco 82,845,000 100% 82,845,000 Radnor 104,545,848 100% 104,545,848 Ridley 64,328,315 100% 64,328,315 Rose Tree-Media 83,564,714 100% 83,564,714 Southeast Delco 50,316,373 100% 50,316,373 Springfield 48,461,012 100% 48,461,012 Upper Darby 31,323,092 100% 31,323,092 Wallingford Swarthmore 89,756,988 100% 89,756,988 William Penn 55,360,150 100% 55,360,150

Direct school district debt 1,095,044,194

Subtotal, overlapping debt 100% 1,355,450,270

Total direct and overlapping debt 100% $ 1,649,066,169

Source: County of Delaware, Pennsylvania, financial statements, townships, boroughs, and school districts of Delaware County

Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the County. This schedule estimates the portion of the outstanding debt of those overlapping governments that is sustained by residents and businesses of the County of Delaware. This process recognizes that when considering government's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.

The estimated percentage of debt applicable to the County of Delaware was provided by the individual government units.

135 County of Delaware, Pennsylvania Computation of Legal Debt Margin Table 11 Last Ten Fiscal Years December 31, 2014 (Unaudited)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Borrowing Base Revenues (1) $ 476,448,524 $ 479,826,132 $ 503,323,037 $ 528,871,550 $ 538,675,759 $ 534,473,234 $ 515,539,248 $ 506,291,039 $ 504,478,366 $ 512,084,629

Debt Limit Percentage 300% 300% 300% 300% 300% 300% 300% 300% 300% 300%

Debt Limit $ 1,429,345,572 $ 1,439,478,396 $ 1,509,969,111 $ 1,586,614,650 $ 1,616,027,277 $ 1,603,419,702 $ 1,546,617,744 $ 1,518,873,117 $ 1,513,435,098 $ 1,536,253,887

General Obligation Debt $ 340,161,143 $ 326,764,754 $ 307,456,947 $ 327,023,923 $ 339,184,638 $ 343,081,951 $ 329,830,465 $ 332,519,000 $ 338,836,000 $ 319,599,000

Legal Debt Margin $ 1,089,184,429 $ 1,112,713,642 $ 1,202,512,164 $ 1,259,590,727 $ 1,276,842,639 $ 1,260,337,751 $ 1,216,787,279 $ 1,186,354,117 $ 1,174,599,098 $ 1,216,654,887

(1) The Commonwealth of Pennsylvania has enacted the "Local Government Unit Debt Act" which limits debt to revenues. Briefly, revenues of the last three years are adjusted for various nonrecurring and excludable items. The average of the adjusted revenues for the respective years is then the borrowing base. Certain percentages are applied to the borrowing base to determine the debt limitations.

Source: County of Delaware, Pennsylvania, financial statements

136 County of Delaware, Pennsylvania Demographic and Economic Statistics Table 12 Last Ten Fiscal Years (Unaudited)

Personal Per Income Capita Estimated (thousands Personal Median School Unemployment Year Population of dollars) Income Age Enrollment Rate

2005 555,648 $ 15,955,432 $ 28,715 39.4 71,798 4.6% 2006 555,996 16,768,283 30,159 39.8 72,043 4.5% 2007 556,351 17,416,291 31,305 40.2 72,858 4.0% 2008 561,109 18,782,562 33,474 40.8 72,661 5.7% 2009 558,028 17,929,439 32,130 41.2 72,358 8.7% 2010 558,979 18,098,622 32,378 41.4 73,432 7.8% 2011 559,992 17,957,263 32,067 41.5 73,555 7.8% 2012 559,998 17,974,582 32,277 42.5 73,610 7.7% 2013 561,973 18,050,392 33,098 42.6 74,003 6.3% 2014 562,960 18,690,272 33,200 42.6 74,129 4.9%

Note: Personal property taxes were assessed at estimated actual value.

(2) County of Delaware conducted a reassessment in 2000 at market value. The County discontinued the tax beginning in 1997.

Source: County Assessment Office, County Planning Dept., and Delaware County Commerce Center

137 County of Delaware, Pennsylvania Principal Employers Table 13 Current Year and Nine Years Ago (Unaudited)

2014 2006 Percentage Percentage of Total of Total Employer Employees Employment Employer Employees Employment

Crozer-Keystone Health System 7,000 1.25% Crozer-Keystone Health System 7,050 1.70%

Boeing Co. (Rotorcraft Div.) 4,550 0.80% Boeing Co. (Rotorcraft Div.) 4,400 1.06%

Boeing Co. (Army Systems Div.) 4,000 0.70% Boeing Co. (Army Systems Div.) 4,000 0.96%

Delaware County 3,030 0.51% Riddle Health System 1,900 0.46%

Villanova University 2,900 0.50% Acme Markets Inc. 1,800 0.44%

Wawa 2,700 0.45% Villanova University 1,750 0.43%

Mainline Health System 1,850 0.32% Elwyn Industries 1,500 0.36%

AmeriHealth Mercy Services 1,700 0.29% Keystone Mercy Health Plan 1,500 0.36%

SAP America 1,500 0.25% SAP America 1,400 0.34%

Elwyn 1,500 0.25% Wawa Inc. 1,300 0.31%

Upper Darby School District 1,500 0.25% Harrah's 1,300 0.31%

Source: County of Delaware, Pennsylvania, Planning Dept. Delaware County Commerce Center

Note: GASB statement 44 was implemented in 2006, therefore that is the earliest comparison data available.

138 County of Delaware, Pennsylvania Full-time Equivalent County Government Employees by Function/Program Table 14 Last Ten Fiscal Years (Unaudited)

Function/Program 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

General government and administration 2,262 2,317 2,385 2,274 2,477 2,389 2,402 2,438 2,429 2,347

Judicial 784 789 693 754 718 669 690 692 687 656

Culture and recreation 18 21 16 17 14 15 17 17 17 17

Golf course 5 5 5 5 5 5 5 5 5 5

Fleet services 7 5 6 6 4 4 7 7 6 6

Total 3,076 3,137 3,105 3,056 3,218 3,082 3,121 3,159 3,144 3,031

Source: Personnel Department

139 County of Delaware, Pennsylvania Operating Indicators by Function/Program Table 15 Last Ten Fiscal Years (Unaudited)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Function/Program General Government and Judicial Bridges maintained 46 46 46 46 46 46 46 46 46 46 Buildings maintained 8 8 8 8 8 8 8 8 8 8

Recreation Rounds played 32,718 28,500 29,443 29,650 27,000 29,118 25,561 27,015 24,806 22,010 Garden plots 117 121 118 118 114 114 114 114 114 114 Summer Fest Events 48 47 52 46 49 47 49 - 50 50 Summer Fest Attendance 39,034 37,696 65,000 58,000 50,000 47,000 53,000 52,000 50,000 51,000

Health & Human Services Cases 52,801 54,959 55,642 56,441 57,266 67,479 69,037 69,994 69,994 68,061 Adoptions 726 757 756 795 836 809 719 701 714 720 Children in Foster Care 953 989 1,028 1,100 1,143 892 868 844 891 885 Mental Health Population 6,436 6,524 6,852 8,077 8,222 7,847 8,900 7,503 17,867 20,236

Judicial Cases Civil 1,560 1,612 1,690 1,783 1,191 1,230 1,428 1,639 1,862 2,124 Criminal 1,426 1,537 1,659 1,774 1,155 1,194 1,314 1,945 2,178 2,461

Solid Waste Residential Tonnage 270,163 275,208 264,164 253,147 244,590 238,406 230,358 217,700 213,195 211,852 Commercial Tonnage 118,324 138,370 137,690 151,290 132,920 130,847 136,125 140,694 147,684 155,443

140 County of Delaware, Pennsylvania Capital Asset Statistics by Function/Program Table 16 Last Ten Fiscal Years (Unaudited)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Function/Program General Government and Judicial Facilities 7 7 7 7 7 7 7 7 7 7 Vehicles 257 261 261 261 252 252 252 277 310 315 Cases 2,986 3,159 3,291 3,291 3,419 3,637 3,692 3,984 4,367 4,884

Recreation Parks 6 6 6 6 6 6 6 6 6 6 Golf Courses 1 1 1 1 1 1 1 1 1 1 Golf Rounds played 32,718 28,500 29,443 29,650 27,000 29,118 25,561 27,015 24,806 22,010 Vehicles 14 14 14 14 14 14 14 14 14 14

Public Works Vehicles 7 8 1 1 1 1 1 1 1 1 Buildings 1 1 1 1 1 1 1 1 1 1

Corrections Capacity 1,592 1,592 1,592 1,592 1,592 1,592 1,592 1,592 1,592 1,592 Vehicles 3 3 3 3 3 3 1 1 1 1

Juvenile Facility Capacity 836 836 836 836 836 836 836 836 836 836 Vehicles 2 2 2 2 2 2 2 2 2 2

Human Services Caseloads 52,081 54,959 55,642 56,441 57,266 67,479 67,479 68,919 69,002 71,119 Vehicles 52 52 52 51 45 45 46 46 46 46

Infrastructure Bridges 46 46 46 46 46 46 46 46 46 46

141

THIS PAGE INTENTIONALLY LEFT BLANK

142

APPENDIX III

PROPOSED FORM OF BOND COUNSEL OPINION

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

FORM OF BOND COUNSEL OPINION

February [12], 2016

Re: $49,420,000 County of Delaware, Pennsylvania General Obligation Bonds, Series of 2016

To the Purchasers of the Bonds:

We have served as Bond Counsel to the County of Delaware, Pennsylvania (the "County"), in connection with the issuance of its General Obligation Bonds, Series of 2016 (the "Bonds") in the aggregate principal amount of $49,420,000 and dated February [12], 2016, under the provisions of the Pennsylvania Local Government Unit Debt Act, 53 Pa. C.S. Chs. 80-82 ("Act"), and an Ordinance (the "Ordinance") enacted on January 13, 2016, by the Council of the County (the "Council"). The Bonds are being issued for the purpose of providing funds which will be used to: (i) current refund all or a portion of the outstanding aggregate principal amount of its General Obligation Bonds, Series of 2005; and (ii) pay the costs and expenses of issuing the Bonds.

The County has covenanted in the Ordinance that it will make no use of the proceeds of the Bonds and it will not take or omit to take any action which would cause the Bonds to be "arbitrage bonds" as defined in the Internal Revenue Code of 1986, as amended (the "Code"), and the applicable regulations thereunder. The County has further covenanted that it will comply with the requirements of Section 148 and Section 141 of the Code and with the applicable regulations thereunder throughout the term of the Bonds.

In the Ordinance, the County has covenanted that (1) it will include in its budget in each fiscal year the amount required to pay debt service on the Bonds for such year, (2) it will appropriate from its general revenues in each such fiscal year, the amount required to pay debt service on the Bonds for such year, and (3) it will duly and punctually pay or cause to be paid when due, from its sinking fund or any other of its revenues or funds, the principal of and interest

As Bond Counsel for the County, we have examined: (a) (a) the relevant provisions of the Constitution of the Commonwealth of Pennsylvania (the "Commonwealth"); (b) the Act; (c) the

Ordinance; (d) the sworn debt statement and borrowing base certification of the County filed with the Pennsylvania Department of Community and Economic Development (the "Department") in accordance with the provisions of the Act; (e) the proceedings of the Council with respect to the authorization, issuance and sale of the Bonds; (f) various proofs of publication in connection with the advertisement of the Ordinance, all of which were filed with the Department in accordance with the provisions of the Act, (g) a Certificate of Approval issued by the Department in respect of the proceedings authorizing the issuance of the Bonds; (h) the opinion of McNichol, Byrne & Matlawski, P.C., special counsel to the County; and (i) certain statements, certifications, affidavits and other documents and matters of law which we have considered relevant, including, without limitation, a certificate dated the date hereof (the "Tax Compliance Certificate") of officials of the County having responsibility for issuing the Bonds, given pursuant to the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated thereunder. We have also examined a fully executed and authenticated Bond, or a true copy thereof, and we assume all other Bonds are in such form and are similarly executed and authenticated.

In rendering the opinion set forth below, we have relied upon the genuineness, accuracy and completeness of all documents, records, certifications and other instruments we have examined, including, without limitation, the authenticity of all signatures appearing thereon.

Except with respect to paragraph 5 below, our opinion is given only with respect to the internal laws of the Commonwealth as enacted and construed on the date hereof.

Based on the foregoing and subject to the qualifications set forth herein, we are of the opinion that:

1. The County is empowered under the provisions of the Constitution and the laws of the Commonwealth to issue the Bonds for the purposes therein set forth.

2. The Ordinance was duly enacted by the Council and continues to be in full force and effect as of the date hereof.

3. The Bonds have been duly authorized, executed, authenticated, issued and delivered, and are the legal, valid and binding general obligations of the County, enforceable in accordance with the terms thereof, except to the extent that enforcement thereof may be affected by bankruptcy, insolvency, reorganization, moratorium or other similar laws or legal or equitable principles affecting the enforcement of creditors' rights.

4. Under the laws of the Commonwealth as enacted and construed on the date hereof, interest on the Bonds is exempt from Pennsylvania personal

income tax and Pennsylvania corporate net income tax, and the Bonds are exempt from personal property taxes in the Commonwealth; however, under the laws of the Commonwealth as enacted and construed on the date hereof, any profits, gains or income derived from the sale, exchange or other disposition of the Bonds will be subject to Commonwealth taxes and local taxes within the Commonwealth.

5. Under existing statutes, regulations, rulings and court decisions, interest on the Bonds, including interest accruing in the form of original issue discount, will not be includible in gross income of the holders thereof for federal income tax purposes, assuming that the County complies and continues to comply with its covenants relating to certain requirements of the Code. Interest on the Bonds will not be a specific preference item for purposes of computing the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Bonds held by a corporation (other than an S corporation, a regulated investment company, or a real estate investment trust) may be indirectly subject to federal alternative minimum tax because of its inclusion in the adjusted current earnings of a corporate holder of the Bonds. Bond Counsel expresses no opinion regarding other federal tax consequences relating to ownership or disposition of, or the accrual or receipt of interest on, the Bonds.

In rendering this opinion, we have assumed continuing compliance by the County with the covenants contained in the Ordinance and the representations in the Tax Compliance Certificate that are intended to comply with the provisions of the Code relating to actions to be taken by the County in respect of the Bonds after the issuance thereof to the extent necessary to effect or maintain the exclusion from gross income of the interest on the Bonds for federal income tax purposes. These covenants and representations relate to, inter alia, the use and investment of proceeds of the Bonds and the rebate to the United States Treasury of specified arbitrage earnings, if any. Failure to comply with such covenants could result in the interest on the Bonds becoming includible in gross income for federal income tax purposes from the date of issuance of the Bonds.

As to questions of fact material to our opinion, we have relied upon the certified proceedings and other documents, agreements, instruments, reports and certificates furnished to us at or in connection with the issuance of the Bonds (including, without limitation, certificates and agreements by the County as to the expected use of proceeds of the Bonds, and as to its continuing compliance with Sections 148 and 141 of the Code to assure that the Bonds do not become "arbitrage bonds") without undertaking to verify the same by independent investigation. We have also relied upon the accuracy of the representations and warranties and the performance of the covenants and agreements of the County set forth in the Ordinance and the various

3 certificates and other agreements delivered at or in connection with the closing held this day.

We have not been engaged to verify, nor have we independently verified, the accuracy, completeness or truthfulness of any statements, certifications, information or financial statements set forth in the Preliminary Official Statement, dated January 7, 2016 (the "Preliminary Official Statement") or the Official Statement, dated January 14, 2016 (the "Official Statement"), or otherwise used in connection with the offer and sale of the Bonds or set forth in or delivered by the County officials. We express no opinion with respect to whether the County, in connection with the sale of the Bonds or the preparation of the Preliminary Official Statement or the Official Statement, has made any untrue statement of a material fact or omitted to state a material fact necessary in order to make any statements made therein not misleading.

We have not verified, and express no opinion as to the accuracy of, any "CUSIP" identification number which may be printed on any Bond.

We express no opinion as to any matter not set forth in the numbered paragraphs herein. This opinion is given as of the date hereof and we assume no obligation to supplement this opinion to reflect changes in law that may hereafter occur or changes in facts or circumstances that may hereafter come to our attention. Without limiting the generality of the foregoing, we express no opinion with respect to and assume no responsibility for, the accuracy, adequacy or completeness of the preliminary official statement or the official statement prepared in respect of the Bonds, and make no representation that we have independently verified the contents thereof.

Very truly yours,

Raffaele & Puppio, LLP

APPENDIX IV

FORM OF CONTINUING DISCLOSURE AGREEMENT

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

$______COUNTY OF DELAWARE, PENNSYLVANIA GENERAL OBLIGATION BONDS, SERIES OF 2016

CONTINUING DISCLOSURE AGREEMENT

This Continuing Disclosure Agreement (this "Disclosure Agreement") is executed and delivered as of the ____ day of January, 2016, by and between the County of Delaware, Pennsylvania (the "County"), and ______, as fiscal agent under the Ordinance mentioned below (in such capacity, the "Fiscal Agent") and as agent hereunder (in such capacity, the "Agent"), in connection with the issuance and sale by the County of $______aggregate principal amount of its General Obligation Bonds, Series of 2016 (the "Bonds"). The Bonds are being issued by the County pursuant to the Pennsylvania Local Government Unit Debt Act, 53 Pa. C.S. Chs. 80-82, as amended (the "Act"), and Ordinance No. 2016-__ enacted by the County Council of the County on January 13, 2016 (the "Ordinance").

In consideration of the mutual covenants, promises and agreements contained herein and intending to be legally bound hereby, the parties hereto agree as follows:

Section 1. Definitions.

In this Disclosure Agreement and any agreement supplemental hereto (except as otherwise expressly provided or unless the context clearly otherwise requires), terms defined in foregoing preamble shall have the same meanings throughout this Disclosure Agreement and, in addition, the following terms shall have the respective meanings specified below:

"Annual Financial Information" shall mean annual financial information and operating data in the Comprehensive Annual Financial Report prepared in accordance with generally accepted accounting principles as applied to governmental units.

"Business Day" shall mean any day other than a Saturday, a Sunday or a day on which the County, the Agent or the Fiscal Agent is authorized or required by law to remain closed.

"Commonwealth" shall mean the Commonwealth of Pennsylvania.

"Disclosure Representative" shall mean the Executive Director of the County or such other official or employee of the County as the County may from time to time designate in writing to the Agent as being the "Disclosure Representative" of the County for the purposes of this Disclosure Agreement.

"EMMA" shall mean the MSRB’s Electronic Municipal Market Access System (www.emma.msrb.org).

"Material Event" shall mean any of the events listed in Section 4(a) of this Disclosure Agreement, if material within the meaning of the Rule.

"MSRB" shall mean the Municipal Securities Rulemaking Board.

"Official Statement" shall mean the County's Official Statement, dated January __, 2016, with respect to the Bonds.

"Participating Underwriter" shall mean the original underwriter of the Bonds required to comply with the Rule in connection with its purchase and reoffering of the Bonds.

"Registered Owner" or "Registered Owners" shall mean the person or persons in whose name a Bond is registered on the books of the County kept by the Fiscal Agent for that purpose in accordance with the Ordinance and the Bonds. For so long as the Bonds shall be registered in the name of the Securities Depository or its nominee, the term "Registered Owners" shall also mean and include, for the purposes of this Disclosure Agreement, the beneficial owners of the Bonds who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, have or share: (a) voting power which includes the power to vote, or to direct the voting of, the Bonds; or (b) investment power which includes the power to dispose or to direct the disposition of a Bond. Beneficial owners of book-entry credits may file their names and addresses with the Agent for the purposes of receiving notices or giving direction under this Disclosure Agreement, provided, however, that the County or the Agent, if appropriate, may require owners of book-entry credits to establish proof of ownership of such book-entry credits.

"Rule" shall mean Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, as such Rule may be amended from time to time.

"Securities" or "securities" shall mean the Bonds.

"Securities Depository" shall mean The Depository Trust Company, New York, New York, or its nominee, Cede & Co., or any successor thereto appointed by the County.

"securities holders" shall mean the Registered Owners.

All other capitalized terms and phrases used in this Disclosure Agreement and not defined above or elsewhere herein shall have the same meanings as set forth in the Ordinance, if defined therein.

Section 2. Authorization and Purpose of Disclosure Agreement.

This Disclosure Agreement is authorized to be executed and delivered by the County pursuant to Section 20 of the Ordinance in order to enable the Participating Underwriter to comply with the requirements of the Rule.

The County is the only obligated person with respect to the Bonds for purposes of the Rule.

Section 3. Annual Financial Information.

Within 180 days after the close of each fiscal year of the County, commencing with the fiscal year ending December 31, 2015, the Disclosure Representative shall file, with the Agent,

the Annual Financial Information for such fiscal year. The Agent shall promptly file the Annual Financial Information with EMMA.

Section 4. Material Events.

(a) The County agrees that it shall file through the Agent, in a timely manner, with EMMA, notice of any of the following Material Events with respect to the Bonds, if material within the meaning of the Rule:

(i) principal and interest payment delinquencies;

(ii) non-payment related defaults;

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

(iv) unscheduled draws on credit enhancements reflecting financial difficulties;

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

(vi) adverse tax opinions, certain notices from the IRS or determinations with respect to the tax status of the security, or other events affecting the tax-exempt status of the securities;

(vii) modifications to rights of the securities holders;

(viii) bond calls and tender offers;

(ix) defeasances;

(x) release, substitution or sale of property securing repayment of the securities;

(xi) rating changes;

(xii) bankruptcy, insolvency, receivership or similar event of the obligated person or issuer;

(xiii) consummation of a merger, consolidation or acquisition of, or the sale of all or substantially all of the assets of, an obligated person or issuer, other than in the ordinary course of business, or the entry into or termination of an agreement relating to such actions if other than pursuant to its terms; and

(xiv) appointment of a successor or additional fiscal agent or change of name of fiscal agent.

The fourteen Material Events listed above are quoted directly from the Rule. Items numbered (iii), (iv) and (v) set forth above are not presently applicable to the Bonds due to the

fact that at the time of issuance of the Bonds it is not anticipated that a debt service reserve fund will be established for the Bonds or that the Bonds will be subject to credit enhancement.

The County further agrees, in accordance with Section 15c2-12(b)(5)(i)(D) of the Rule, that it shall file through the Agent, in a timely manner, with EMMA, notice of any failure of the County to provide required Annual Financial Information on or before the date required in Section 3 hereof.

(b) Whenever the County concludes that a Material Event has occurred, the Disclosure Representative shall promptly notify the Agent in writing of such occurrence, specifying the Material Event. Such notice shall instruct the Agent to file a notice of such occurrence, as prepared by the County, with EMMA. Upon receipt, the Agent shall promptly file such notice with EMMA.

(c) Notwithstanding the foregoing, the Agent shall, promptly after obtaining actual knowledge of an event listed in clauses (i), (viii), (ix) or (xi) of Section 4(a) above of which it has not received notice pursuant to Section 4(b) hereof, notify the Disclosure Representative of the occurrence of such event and shall, within three (3) Business Days of giving notice to the Disclosure Representative, file notice of such occurrence with EMMA.

(d) The Agent shall prepare an affidavit of delivery for each notice delivered pursuant to clauses (b) and (c) of this Section 4 and shall deliver such affidavit to the County no later than three (3) Business Days following the date of delivery of such notice by the Agent.

(e) The Agent shall request the return from EMMA, of a written acknowledgment or of a receipt of any notice delivered to EMMA, which shall specify, among other things, the date the notice was received. Upon the return of such acknowledgment, the Agent shall prepare an affidavit of receipt specifying the date of receipt of such acknowledgement. Such affidavit of receipt shall be delivered to the County no later than three (3) Business Days following the date of the receipt by the Agent of such acknowledgement.

(f) All filings with the MSRB pursuant to this Disclosure Agreement: (i) shall be made in an electronic format as prescribed by the MSRB; and (ii) shall be accompanied by identifying information as prescribed by the MSRB.

Section 5. Amendment; Waiver.

(a) Notwithstanding any other provision of this Disclosure Agreement, the County and the Agent may amend the Disclosure Agreement or waive any of the provisions hereof, provided that no such amendment or waiver shall be executed by the parties hereto or be effective unless:

(i) the amendment or waiver is made in connection with a change in circumstances that arises from a change in legal requirements, change in law or change in identity, nature or status of the County or the governmental operations conducted by the County or a change in identity, nature or status of the Agent;

(ii) the Disclosure Agreement, as amended by the amendment or waiver, would have been the written undertaking contemplated by the Rule at the time of original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(iii) the amendment or waiver does not materially impair the interests of the Registered Owners of the Bonds.

(b) Evidence of compliance with the conditions set forth in clause (a) of this Section 5 shall be satisfied by the delivery to the Agent of an opinion of counsel having recognized experience and skill in the issuance of municipal securities and federal securities law, acceptable to the County and to the Agent, to the effect that the amendment or waiver satisfies the conditions set forth in clauses (i), (ii), and (iii) of Section 5(a) hereof.

(c) Notice of any amendment or waiver containing an explanation of the reasons therefor shall be given by the Disclosure Representative to the Agent upon execution of the amendment or waiver and the Agent shall file such notice with EMMA at the time of filing of the Annual Financial Information filed pursuant to Section 3 hereof. The Agent shall also send notice of the amendment or waiver to each Registered Owner.

Section 6. Other Information; Duties Under The Ordinance.

(a) Nothing in this Disclosure Agreement shall preclude the County from disseminating any other information with respect to the County or the Bonds, using the means of communication provided in this Disclosure Agreement or otherwise, in addition to the notices of Material Events specifically provided for herein, nor shall the County be relieved of complying with any applicable law relating to the availability and inspection of records, if any. Any election by the County to furnish any information not specifically provided for herein in any notice given pursuant to this Disclosure Agreement or by the means of communication provided for herein shall not be deemed to be an additional contractual undertaking and the County shall have no obligation to furnish such information in any subsequent notice or by the same means of communication.

(b) Nothing in this Disclosure Agreement shall relieve the Fiscal Agent of any of its duties and obligations under the Ordinance.

Section 7. Default.

(a) In the event that the County or the Agent fails to comply with any provision of this Disclosure Agreement, the Agent or any Registered Owner of the Bonds shall have the right, by mandamus, suit, action or proceeding at law or in equity, to compel the County or the Agent to perform each and every term, provision and covenant contained in this Disclosure Agreement applicable to the County or the Agent. The Agent shall be under no obligation to take any action in respect of any default hereunder unless it has been directed in writing to do so by the Registered Owners of at least 25% in aggregate principal amount of the outstanding Bonds and if, in the Agent's opinion, such action may tend to involve expense or liability, unless it is also furnished with indemnity and security for expenses satisfactory to it.

(b) A default under this Disclosure Agreement shall not be or be deemed to be a default under the Bonds, the Ordinance or the Act and the sole remedy in the event of a failure by the County or the Agent to comply with the provisions hereof shall be the action to compel performance described in clause (a) above.

Section 8. Concerning the Agent.

(a) The Agent's only duties are those contained herein. The Agent shall have no responsibility for the content of any notice prepared and provided to it by the County or for compliance by any other party with the requirements of the Rule. The Agent may execute any powers hereunder and perform any duties required of it through attorneys, agents and other experts, officers, or employees, selected by it, and the written advice of such counsel or other experts shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. The Agent shall not be answerable for the default or misconduct of any attorney, agent, expert or employee selected by it with reasonable care. The Agent shall not be answerable for the exercise of any discretion or power under this Disclosure Agreement, except only its own willful misconduct or negligence.

(b) The County shall pay the Agent reasonable compensation for its services hereunder, and also all its reasonable expenses and disbursements, including reasonable fees and expenses of its counsel or other experts, as shall be agreed upon by the Agent and the County, and, to the extent permitted by law, the County shall reimburse the Agent for the amount of any direct liabilities, costs and expenses which it may incur in the exercise and performance of its powers and duties hereunder, except with respect to its own negligence or willful misconduct.

(c) The Agent shall reimburse the County for the amount of any direct liabilities, costs and expenses which the County may directly incur in connection with or relating to the gross negligence or willful misconduct of the Agent under this Disclosure Agreement.

(d) The Agent may act on any resolution, notice, telegram, request, consent, waiver, certificate, statement, affidavit, or other paper or document which it in good faith believes to be genuine and to have been passed or executed by the proper persons or to have been prepared and furnished pursuant to any of the provisions of this Disclosure Agreement, and the Agent shall be under no duty to make any investigation as to any statement contained in any such instrument, but may accept the same as conclusive evidence of the accuracy of such statement in the absence of actual notice to the contrary.

Section 9. Term of Disclosure Agreement.

This Disclosure Agreement shall terminate upon payment or provision for payment in full of the Bonds.

Section 10. Beneficiaries.

This Disclosure Agreement shall inure solely to the benefit of the County, the Agent and the Registered Owners, from time to time, of the Bonds and nothing herein contained shall confer any right upon any other person.

Section 11. Notices.

Any written notice to or demand may be served, presented or made to the persons named below and shall be sufficiently given or filed for all purposes of this Disclosure Agreement if deposited in the United States mail, first class postage prepaid or in a recognized form of overnight mail or by telecopy with confirmation of receipt, addressed as follows or to such other address as may be filed with the Agent:

(a) To the Agent at:

______[Address] Telecopy No: ______

(b) To the County or the Disclosure Representative at:

County of Delaware Government Center Building, Room 202 Media, PA 19063 Attention: Executive Director Telecopy No.: (610) 891-0647

Section 12. No Personal Recourse.

No personal recourse shall be had for any claim based on this Disclosure Agreement against any member, officer, or employee, past, present or future, of the Council of the County (including without limitation, the Disclosure Representative), or the County or of any successor bodies of such, either directly or through the Council of the County or the County or successor bodies of such, under any constitutional provision, statute or rule of law or by the enforcement of any assessment or penalty or otherwise.

Section 13. Controlling Law.

The laws of the Commonwealth shall govern the construction and interpretation of this Disclosure Agreement.

Section 14. Successors and Assigns.

All of the covenants, promises and agreements contained in this Disclosure Agreement by or on behalf of the County or by or on behalf of the Agent shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not.

Section 15. Removal and Resignation of the Agent.

The provisions of Section 22 (f) through (j), inclusive, of the Ordinance shall govern the resignation or removal of the Agent and are hereby incorporated by this reference as if fully set forth herein.

Section 16. Headings for Convenience Only.

The descriptive headings in this Disclosure Agreement are inserted for convenience of reference only and shall not control or affect the meaning or construction of any of the provisions hereof.

Section 17. Counterparts.

The Disclosure Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original but such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Disclosure Agreement to be duly executed as of the day and year first above written.

COUNTY OF DELAWARE, PENNSYLVANIA

By: Mario J. Civera, Jr. Chairman, County Council

______as Agent and as Fiscal Agent

By: Authorized Officer

[ THIS PAGE INTENTIONALLY LEFT BLANK ]