Ingham County Building Authority

This Preliminary Official Statement and the information contained herein is subject to completion and amendment. These securities may not be sold nor may an offer to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. As of its date, this Preliminary Official Statement has been “deemed final” by the Authority for purposes of SEC Rule 15c2-12(b)(1) except for the information permitted to be omitted by SEC rule 15c2-12(b)(1). Multiples: Purchase Price: Delivery: § ** * † The dateofthisOfficialStatementis:May__,2017. Dated: payment. PaymentofprincipalandinteresttoBeneficialOwnersshallbemadeasdescribedin“BOOK-ENTRYONLYSYSTEM”herein. shall bepaidwhenduebycheckmailedtotheregisteredownerasshownregistrationbooksoffifteenthdaymonthprecedingpaymentdatefor eachinterest National Association, Detroit, Michigan (the “Paying Agent”) or such other Paying Agent as the Authority may hereafter designate by notice mailed to the registered owner. Interest bonds, ofthedenomination$5,000ormultiplesthereofnotexceedingforeachmaturityprincipalamountsuchmaturity.Theandinterestshallbepaid byU.S.Bank PAYMENT OFBONDS:InterestontheBondswillbepayablesemiannuallyMay1andNovemberofeachyearcommencing1,2017.Theregistered shall notmeantheBeneficialOwnersofBonds.See“BOOK-ENTRYONLYSYSTEM”herein Bonds purchased.SolongasCede&Co.istheBondholder,nomineeofDTC,referenceshereintoBondholdersorregisteredownersshallmeanCo., aforesaid, and be madeinbook-entryonlyform,thedenominationsof$5,000oranyintegralmultiplethereof.Purchaserswillnotreceivecertificatesrepresentingtheirbeneficial interestinthe nominee ofTheDepositoryTrustCompany(“DTC”),NewYork,York.DTCwillactassecuritiesdepositoryfortheBonds.Purchasesbeneficialinterestsin the Bondswill BOOK-ENTRY-ONLY: bond authorizingresolution. irrevocably pledgedthecashrentalpaymentsforpaymentofprincipalandinterestonBondsastatutorylienhasbeencreated bythe as shall be necessary forthe making of such cash rental payments. Taxes imposed by the County are subject to constitutional and statutory tax limitations. The Authority has and creditoftheCountyhavebeenpledgedformakingcashrentalpaymentsifCMHfailstodosoisobligatedlevyadvaloremtaxesinsuchamounts the Authority in such amounts as shall be sufficient to enable the Authority to pay the principal of and interest on the Bonds as the same shall become due. The limited tax full faith tenant in,occupyandmaintaintheProject,payrentalwithrespecttoProject.TheLeaseSubleaserequireCHMonbehalf County andtheAuthoritywillenterintoasublease(the“Sublease”)withCommunityMentalHealthofClinton-Eaton-InghamCounties(“CMH”),whobemajor of Ingham,StateMichigan(the“County”)forleasetotheCountypursuantalimitedtaxFullFaithandCreditGeneralObligationContractLease(herein“Lease”).The Road, Lansing,Michiganandacquiring,constructing,furnishingequippinganapproximately42,000squarefootadditionthereto,togetherwithassociatedparking,intheCounty for thepurposeofdefrayingpartcostrenovating,constructing,furnishing,equippingandimprovingexistingCommunityMentalHealthBuildinglocatedat812EastJolly Authority, CountyofIngham,StateMichigan(the“Authority”),pursuanttotheauthorizationcontainedinAct 31, PublicActsofMichigan,1948(FirstExtraSession),asamended, PURPOSE ANDSECURITY:The Building Authority Bonds (Community Mental Health Building), Series 2017 (the “Bonds”) are being issued by the Ingham County Building New Issue OF 1986,ASAMENDED. thereof. State ofMichiganandbyanyothertaxingauthoritywithintheMichigan,exceptestatetaxesongainsrealizedfromsale,paymentordisposition gross incomeforfederaltaxpurposesexceptasdescribedunder“TAXMATTERS”herein,and(2)theBondsinterestthereonareexemptfromtaxationby Book-Entry-Only the makingofaninformedinvestmentdecision. This coverpagecontainsinformationforaquickreferenceonly.Itisnotsummary ofthisissue.InvestorsmustreadtheentireOfficialStatementtoobtaininformationessential Counsel. BOND COUNSEL:TheBondswillbeoffered when, asandifissuedbytheAuthoritysubjecttoapprovinglegalopinionofDickinsonWrightPLLC,Lansing,Michigan,Bond as tomaintaincomparableanunderwriterspreadpossiblethewinningbid. See“ADJUSTMENTTOPURCHASEPRICE”herein. ADJUSTMENT TOPURCHASEPRICE:ThepurchasepriceoftheBondswillbeadjustedproportionatelytoadjustment in principalamountoftheBondsandsuchmanner principal amountofthebonds,butinterestratesspecifiedbysuccessfulbidder willnotchange.See“MATURITYADJUSTMENT”herein. adjustment, ifnecessary,willbemadeinincrementsof$5,000,andmayone ormorematurities.Thepurchasepricewillbeadjustedproportionatelytothedecreasein MATURITY ADJUSTMENT:TheAuthorityreservestherighttodecreaseaggregateprincipalamountof Bondsafterreceiptofthebidsandpriortofinalaward.Such and afterNovember1,2026.See“PRIORREDEMPTION”herein. PRIOR REDEMPTION: BondsmaturingonandafterNovember1,2027,shallbesubjecttoredemptionprior tomaturity,attheoptionofAuthority,inanyorder,timeon BOND OPTION”herein. TERM BOND OPTION: INTEREST RATERESTRICTION:Bondsmaturinginanyoneyearshallnotbearaninterestratelowerthanthepreceding year.

Authority shall notberesponsiblefor theselectionofCUSIP numbers,noranyrepresentation madeastotheir correctnessontheBonds orasindicatedabove. Copyright 2017, American Bankers Association. CUSIPdatahereinisprovidedbyGlobal Services, managed onbehalf of the AmericanBankersAssociation by S&PGlobalMarketingIntelligence. The Preliminary, subjecttochange. As ofdatedelivery. For anexplanationofthe rating,see“RATING”herein. Numbers CUSIP§ THE BONDSWILLNOT In the opinion of Dickinson Wright PLLC, Bond Counsel, subject to compliance with certain covenants, under existing law (1) the interest on the Bonds is excluded from

1/8th or1/20thof1%both Not lessthan100%ormore105%ofparvalue To BeDetermined(estimatedtobe–May17,2017) Date ofDelivery The Bondsareissuableonlyasfullyregisteredbondswithoutcouponsand,whenissued,willbeinthenameofCede&Co.,Bondholderand Year 08$335,000 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Bidders shallhavetheoptionofdesignatingbondsmaturinginyears2018through finalmaturityasserialbondsortermbonds,both.See“TERM BE DESIGNATEDAS“QUALIFIEDTAX-EXEMPTOBLIGATIONS”DESCRIBEDINSECTION265(b)(3)(B)OFTHEINTERNALREVENUECODE Amount**

350,000 365,000 380,000 395,000 410,000 425,000 440,000 460,000 480,000 PRELIMINARY OFFICIAL STATEMENT DATED:

(Community MentalHealthBuilding),Series2017 INGHAM COUNTY BUILDING AUTHORITY Additional information relativetothisBondissuemay beobtained from: Interest Rate County ofIngham,StateMichigan (Limited TaxGeneralObligation) PFM FinancialAdvisors LLC Building AuthorityBonds

555 Briarwood Circle, Suite333 Date ofSale:May4,2017 Time: 11:00AM,EDT $10,000,000** Yield Ann Arbor, MI48108 734-994-9700

Numbers CUSIP§ Year a 08$495,000 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 PRIL 24, 2017 Maximum InterestSpread: Maximum InterestRate: Amount** 515,000 535,000 560,000 580,000 605,000 630,000 655,000 680,000 705,000 Principal Due: County tomakecashrental payments to Rating: S&PGlobalRatings:

Interest

Rate November 1,2018–2037* Yield † 2.00% 5.00% * ___ INGHAM COUNTY BUILDING AUTHORITY 341 S Jefferson Mason, Michigan 48854

Phone: 517-676-7206 Fax: 517-676-7306

BUILDING AUTHORITY

AUTHORITY SECRETARY TREASURER CHAIRPERSON Timothy J. Dolehanty Eric A. Schertzing Peter A. Cohl

COUNTY ADMINSTRATION

TREASURER Eric A. Schertzing CONTROLLER/ADMINSTRATOR COUNTY ATTORNEY Timothy J. Dolehanty Peter A. Cohl

CLERK REGISTER OF DEEDS Barb Byrum Derrick Quinney

DRAIN COMMISSIONER SHERIFF PROSECUTING ATTORNEY Patrick E. Lindemann Scott Wriggelsworth Carol Siemon

COUNTY BOARD OF COMMISSIONERS

VICE VICE CHAIRPERSON CHAIRPERSON CHAIRPERSON PRO-TEM Sarah Anthony Carol Koenig Randy Maiville

MEMBERS Mark Grebner Ryan Sebolt Kara Hope Victor Celentino Robin Case-Naeyaert Deb Nolan Randy Schafer Bryan Crenshaw Todd Tennis Brian McGrain Teri Banas

PROFESSIONAL SERVICES

Bond Counsel ...... Dickinson Wright PLLC Lansing, Michigan

Municipal Advisor ...... PFM Financial Advisors LLC Ann Arbor, Michigan

Paying Agent ...... U.S. Bank National Association Detroit, Michigan

ii No dealer, broker, salesperson or other person has been authorized by the Authority or the County to give any information or to make any representations, other than those contained in this Official Statement. This Official Statement does not constitute any offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person, in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information, estimates and expressions of opinion 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 Authority or the County since the date hereof. This Official Statement is submitted in connection with the sale of the securities referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.

This Official Statement and any addenda thereto were prepared relying on information of the Authority, the County, and other sources and are believed to be reliable.

In making an investment decision, investors must rely on their own examination of the Authority’s and the County’s financial records, and the terms of the offering, including the merits and risks involved.

iii TABLE OF CONTENTS

INTRODUCTION ...... 1 INFORMATION FOR BIDDERS ...... 1 INTEREST ...... 1 TERM BOND OPTION ...... 2 GOOD FAITH DEPOSIT ...... 2 MATURITY ADJUSTMENT ...... 2 ADJUSTMENT TO PURCHASE PRICE ...... 2 PRIOR REDEMPTION ...... 2 Mandatory Redemption ...... 2 Optional Redemption ...... 2 Notice of Redemption and Manner of Selection ...... 2 PURPOSE AND SECURITY ...... 3 ESTIMATED SOURCES AND USES OF FUNDS ...... 3 BOOK-ENTRY-ONLY SYSTEM ...... 3 Paying Agent and Bond Registration ...... 5 Transfer Outside Book-Entry-Only System ...... 5 TAX PROCEDURES ...... 5 BOND INSURANCE AT PURCHASER’S OPTION ...... 6 LITIGATION ...... 6 TAX MATTERS ...... 6 General...... 6 Tax Treatment of Accruals on Original Issue Discount Bonds ...... 7 Amortizable Bond Premium ...... 7 Future Developments ...... 8 APPROVAL BY MICHIGAN DEPARTMENT OF TREASURY ...... 8 BOND COUNSEL’S RESPONSIBILITY ...... 8 MUNICIPAL ADVISOR...... 8 CONTINUING DISCLOSURE ...... 9 RATING ...... 9 CERTIFICATION ...... 10

APPENDIX A: GENERAL FINANCIAL, ECONOMIC & STATISTICAL INFORMATION APPENDIX B: GENERAL FUND BUDGETS APPENDIX C: AUDITED FINANCIAL STATEMENTS APPENDIX D: FORM OF LEGAL OPINION APPENDIX E: FORM OF CONTINUING DISCLOSURE CERTIFICATE APPENDIX F: DRAFT NOTICE OF SALE

iv $10,000,000** INGHAM COUNTY BUILDING AUTHORITY County of Ingham, State of Michigan Building Authority Bonds (Community Mental Health Building), Series 2017 (Limited Tax General Obligation) INTRODUCTION

The purpose of this Official Statement, which includes the cover page and the Appendices is to furnish information in connection with the issuance and sale by the Ingham County Building Authority, County of Ingham, State of Michigan (the “Authority”) of its Building Authority Bonds (Community Mental Health Building), Series 2017 (Limited Tax General Obligation) (the “Bonds”).

INFORMATION FOR BIDDERS

Date of Sale: Thursday, May 4, 2017 Time of Sale: 11:00 AM, EDT

Place of Sale: Ingham County Municipal Advisory Council of Michigan Building Authority -or- Buhl Building 341 S Jefferson 535 Griswold, Suite 1850 Mason, Michigan 48854 Detroit, MI 48226 Phone: 517-676-7206 Phone: (313) 963-0420 Fax: 517-676-7306 Fax: (313) 963-0943

Bids may also be faxed to either location above, or submitted electronically via PARITY.

DATED: Date of Delivery MAXIMUM INTEREST RATE: 5.0%

FIRST INTEREST: November 1, 2017 MAXIMUM INTEREST SPREAD: 2.0%

DENOMINATIONS: $5,000 or any integral multiple MULTIPLES: 1/8 or 1/20 of 1% or both thereof not exceeding for each maturity the principal amount of such maturity. REGISTRATION: Principal and Interest

PURCHASE PRICE: Not less than 100% or more than 105% of par value

PAYING AGENT: U.S. Bank National Association, Detroit, Michigan

GOOD FAITH DEPOSIT: A 1% Good Faith Deposit will be required for further information regarding this issue, see “GOOD FAITH DEPOSIT”.

QUALIFICATION: The Bonds will not be designated as "qualified tax-exempt obligations" as described in Section 265(b)(3) of the Internal Revenue Code of 1986, as amended.

RESTRICTION: THE INTEREST RATE BORNE BY BONDS MATURING IN ANY YEAR SHALL NOT BE LESS THAN THE INTEREST RATE BORNE BY BONDS MATURING IN THE PRECEDING YEAR.

PRINCIPAL DUE: November 1, annually as shown the front cover.

INTEREST Interest on the Bonds will be payable on November 1, 2017 and semiannually on the 1st day of each May and November thereafter. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

** Preliminary, subject to change.

1 TERM BOND OPTION

Bidders shall have the option of designating Bonds maturing in the years 2018 through final maturity as serial bonds or term bonds, or both. The bid must designate whether each of the principal amounts shown above for the years 2018 through final maturity represent a serial maturity or a mandatory redemption requirement for a term bond maturity. There may be more than one term bond designated. In any event, the above principal amount scheduled for the years 2018 through final maturity shall be represented by either serial bond maturities or mandatory redemption requirements, or a combination of both. Any such designation must be made at the time bids are submitted.

GOOD FAITH DEPOSIT

A good faith deposit in the form of a certified or cashier's check drawn upon an incorporated bank or trust company, or wire transfer, in the amount of $100,000 payable to the order of the Ingham County Building Authority will be required of the successful bidder. If a check is used, it must accompany the bid. If a wire transfer is used, the successful bidder is required to wire its good faith deposit to the Authority not later than Noon, Eastern Daylight Time, on the next business day following the sale using the wire instructions provided by PFM Financial Advisors LLC. The good faith deposit will be applied to the purchase price of the Bonds. In the event the purchaser fails to honor its accepted bid, the good faith deposit will be retained by the Authority. No interest shall be allowed on the good faith deposit, and checks of the unsuccessful bidders will be promptly returned to such bidder's representative or by registered mail. The good faith check of the successful bidder will be cashed and payment for the balance of the purchase price of the Bonds shall be made at the closing.

MATURITY ADJUSTMENT

The Authority reserves the right to decrease the aggregate principal amount of the Bonds after receipt of the bids and prior to final award. Such adjustment, if necessary, will be made in increments of $5,000, and may be made in one or more maturities. The purchase price will be adjusted proportionately to the decrease in the principal amount of the bonds, but the interest rates specified by the successful bidder will not change.

ADJUSTMENT TO PURCHASE PRICE

The purchase price of the Bonds will be adjusted proportionately to the adjustment in principal amount of the Bonds and in such manner as to maintain as comparable an underwriter spread as possible to the winning bid

PRIOR REDEMPTION Mandatory Redemption Bonds designated as term bonds shall be subject to mandatory redemption at par and accrued interest on the dates and in the amounts corresponding to the annual principal maturities hereinbefore set forth. The Bonds or portions of Bonds to be redeemed shall be selected by lot.

Optional Redemption

Bonds maturing on and after November 1, 2027, shall be subject to redemption prior to maturity, at the option of the Authority, in any order, at any time on and after November 1, 2026. Bonds of a denomination greater than $5,000 may be redeemed in part in amounts of $5,000 or any integral multiple thereof. If less than all of the Bonds maturing in any year are to be redeemed, the Bonds or portions of bonds to be redeemed shall be selected by lot. The redemption price shall be the par value of the Bond or portion of the Bond called to be redeemed plus interest to the date fixed for redemption. Notice of Redemption and Manner of Selection Notice of redemption of any Bond shall be given not less than thirty (30) days and not more than sixty (60) days prior to the date fixed for redemption by mail to the Registered Owner at the registered address shown on the registration books kept by the Paying Agent. Bonds shall be called for redemption in multiples of $5,000 and Bonds of denominations of more than $5,000 shall be treated as representing the number of Bonds obtained by dividing the denomination of the Bond by $5,000 and such Bonds may be redeemed in part. The notice of redemption for Bonds redeemed in part shall state that upon surrender of the Bond to be redeemed a new Bond or Bonds in an aggregate

2 principal amount equal to the unredeemed portion of the Bond surrendered shall be issued to the Registered Owner thereof. No further interest payment on the Bonds or portions of Bonds called for redemption shall accrue after the date fixed for redemption, whether presented for redemption, provided funds are on hand with the Paying Agent to redeem the same.

If less than all of the Bonds of any maturity shall be called for redemption prior to maturity unless otherwise provided, the particular Bonds or portions of Bonds to be redeemed shall be selected by the Paying Agent, in such manner as the Paying Agent in its discretion may deem proper, in the principal amounts designated by the Authority. Upon presentation and surrender of such Bonds at the corporate trust office of the Paying Agent, such Bonds shall be paid and redeemed.

So long as the book-entry-only system remains in effect, in the event of a partial redemption the Paying Agent will give notice to Cede & Co., as nominee of DTC, only, and only Cede& Co. will be deemed to be a holder of the Bonds. DTC is expected to reduce the credit balances of the applicable DTC Participants in respect of the Bonds and in turn the DTC Participants are expected to select those Beneficial Owners whose ownership interests are to be extinguished or reduced by such partial redemption, each by such method as DTC or such DTC Participants, as the case may be, deems fair and appropriate in its sole discretion.

PURPOSE AND SECURITY

The Bonds are being issued by the Authority, pursuant to the authorization contained in Act 31, Public Acts of Michigan, 1948 (First Extra Session), as amended, for the purpose of defraying part of the cost of renovating, constructing, furnishing, equipping and improving the existing Community Mental Health Building located at 812 East Jolly Road, Lansing, Michigan and acquiring, constructing, furnishing and equipping an approximately 42,000 square foot addition thereto, together with associated parking, in the County of Ingham, State of Michigan (the “County”) for lease to the County pursuant to a limited tax Full Faith and Credit General Obligation Contract of Lease (herein the "Lease"). The County and the Authority will enter into a sublease (the "Sublease") with the Community Mental Health Authority of Clinton-Eaton-Ingham Counties ("CMH"), who will be the major tenant in, occupy and maintain the Project, and pay rental with respect to the Project. The Authority, the County and CMH will enter into a Ground Lease, in connection with the land or which the Project will be situated. The Lease and Sublease require CHM on behalf the County to make cash rental payments to the Authority in such amounts as shall be sufficient to enable the Authority to pay the principal of and interest on the Bonds as the same shall become due. The limited tax full faith and credit of the County have been pledged for the making of the cash rental payments if CMH fails to do so and the County is obligated to levy ad valorem taxes in such amounts as shall be necessary for the making of such cash rental payments. Taxes imposed by the County are subject to constitutional and statutory tax limitations. The Authority has irrevocably pledged the cash rental payments for the payment of the principal of and interest on the Bonds and a statutory lien on the cash rental payments has been created by the bond authorizing resolution.

ESTIMATED SOURCES AND USES OF FUNDS

Sources of Funds: Par Amount Premium TOTAL SOURCES

Uses of Funds: Construction Fund Deposit Principal and Interest Fund Underwriter's Discount Cost of Issuance TOTAL USES BOOK-ENTRY-ONLY SYSTEM The information in this section has been furnished by The Depository Trust Company, New York, New York (“DTC”). No representation is made by the Authority, the Paying Agent as to the completeness or accuracy of such information or as to the absence of material adverse changes in such information subsequent to the date hereof. No attempt has been made by the Authority or the Paying Agent to determine whether DTC is or will be financially or

3 otherwise capable of fulfilling its obligations. Neither the Authority nor the Paying Agent will have any responsibility or obligation to Direct Participants, Indirect Participants (both as defined below) or the persons for which they act as nominees with respect to the Bonds, or for any principal, premium, if any, or interest payment 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 each maturity of the Bonds, each in the aggregate principal amount 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, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

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 nominee do not affect 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. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the 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.

4 Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Payments of principal, interest and redemption amounts, if any, 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 Authority or Paying 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 Paying Agent, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments of principal, interest and redemption amounts, if any, to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) are the responsibility of the Authority or the Paying 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 securities depository with respect to the Bonds at any time by giving reasonable notice to the Authority or the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered.

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

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

Paying Agent and Bond Registration

Principal and interest shall be payable and the Bonds shall be registered and transferred as described under the heading “BOOK-ENTRY-ONLY SYSTEM” above until the book-entry only system is discontinued. The Authority has appointed the Paying Agent shown on the cover. In the event the book-entry only system is discontinued, the Paying Agent will also act as bond registrar and transfer agent.

Transfer Outside Book-Entry-Only System

In the event that the book-entry-only system is discontinued, the following provisions would apply to the Bonds. The Paying Agent shall keep the registration books for the Bonds (the “Bond Register”) at its corporate trust office. Subject to the further conditions contained in the bond authorizing resolution, the Bonds may be transferred or exchanged for one or more Bonds in different authorized denominations upon surrender thereof at the corporate trust office of the Paying Agent by the registered owners or their duly authorized attorneys; upon surrender of any Bonds to be transferred or exchanged, the Paying Agent shall record the transfer or exchange in the Bond Register and shall authenticate replacement bonds in authorized denominations; the Paying Agent shall not be required to effect or register a transfer or exchange of any Bond which has been selected for such redemption, except the Bonds properly surrendered for partial redemption may be exchanged for new Bonds in authorized denominations equal in the aggregate to the unredeemed portion; the Authority and the Paying Agent shall be entitled to treat the registered owners of the Bonds, as their names appear in the Bond Register as of the appropriate dates, as the owners of such Bonds for all purposes under the bond authorizing resolution. No transfer or exchange made other than as described above in the bond authorizing resolution shall be valid or effective for any purposes under the bond authorizing resolution.

TAX PROCEDURES

Article IX, Section 3, of the Michigan Constitution provides that the proportion of true cash value at which property shall be assessed shall not exceed 50% of true cash value. The Michigan Legislature by statute has provided that property shall be assessed at 50% of its true cash value, except as described below. The Michigan Legislature or the electorate may at some future time reduce the percentage below 50% of true cash value.

5 On March 15, 1994, the electors of the State approved an amendment to the Michigan Constitution permitting the Legislature to authorize ad valorem taxes on a non-uniform basis. The legislation implementing this constitutional amendment added a new measure of property value known as "Taxable Value." Beginning in 1995, taxable property has two valuations -- State equalized valuation ("SEV") and Taxable Value. Property taxes are levied on Taxable Value. Generally, Taxable Value of property is the lesser of (a) the Taxable Value of the property in the immediately preceding year, adjusted for losses, and multiplied by the lesser of the inflation rate or 1.05%, plus additions, or (b) the property's current SEV. Under certain circumstances, therefore, the Taxable Value of property may be different from the same property's SEV.

When property is sold or transferred, Taxable Value is adjusted to the SEV, which under existing law is 50% of the current true cash value. The Taxable Value of new construction is equal to current SEV. Taxable Value and SEV of existing property are also adjusted annually for additions and losses.

Responsibility for assessing taxable property rests with the local assessing officer of each township and city. Any property owner may appeal the assessment to the local assessor, to the local board of review, the Michigan Tax Tribunal, and ultimately to the Michigan appellate courts.

The Michigan Constitution also mandates a system of equalization for assessments. Although the assessors for each local unit of government within a Authority are responsible for actually assessing at 50% of true cash value, adjusted for Taxable Value purposes, the final SEV and Taxable Value are arrived at through several steps. Assessments are established initially by the municipal assessor. Municipal assessments are then equalized to the 50% levels as determined by the county's department of equalization. Thereafter, the State equalizes the various counties in relation to each other. SEV is important, aside from its use in determining Taxable Value for the purpose of levying ad valorem property taxes, because of its role in the spreading of taxes between overlapping jurisdictions, the distribution of various State aid programs, State revenue sharing and in the calculation of debt limits.

Property that is exempt from property taxes, e.g., churches, government property, public schools, is not included in the SEV and Taxable Value data in this Official Statement. Property granted tax abatements under Act 198, Public Acts of Michigan, 1974, amended, is recorded on a separate tax roll while subject to tax abatement. The valuation of tax-abated property is based upon SEV but is not included in either the SEV or Taxable Value data in this Official Statement except as noted. Under limited circumstances, other state laws permit the partial abatement of certain taxes for other types of property for periods of up to 12 years.

BOND INSURANCE AT PURCHASER’S OPTION

If the Bonds qualify for the issuance of any policy of municipal bond insurance or commitment therefore at the option of the purchaser, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the purchaser. There will be no changes made to the bond authorizing resolution to reflect bond insurance. Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the purchaser, except that, if the Authority has requested and received a rating on the Bonds, from a rating agency, the Authority will pay the fee for the requested rating. Any other rating agency fees shall be the responsibility of the purchaser. FAILURE OF THE MUNICIPAL BOND INSURER TO ISSUE THE POLICY AFTER THE BONDS HAVE BEEN AWARDED TO THE PURCHASER SHALL NOT CONSTITUTE CAUSE FOR FAILURE OR REFUSAL BY THE PURCHASER TO ACCEPT DELIVERY OF THE BONDS FROM THE AUTHORITY.

LITIGATION

To the knowledge of the appropriate officials of the County and the Authority, the County and the Authority have no litigation pending or threatened against them which would have any material effect on their finances or their ability to pay principal of and interest on the Bonds.

TAX MATTERS

General

In the opinion of Dickinson Wright PLLC, Bond Counsel, based on its examination of the documents described in its opinion, under existing law, the interest on the Bonds (a) is excluded from gross income for federal income tax purposes, and (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on

6 individuals and corporations; however, it should be noted that certain corporations must take into account interest on the Bonds in determining adjusted current earnings for the purpose of computing such alternative minimum tax. The opinion set forth in clause (a) above is subject to the condition that the Authority comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be (or continue to be) excluded from gross income for federal income tax purposes. Failure to comply with such requirements could cause the interest on the Bonds to be included in gross income retroactive to the date of issuance of the Bonds. The Authority has covenanted to comply with all such requirements. Bond Counsel will express no opinion regarding other federal tax consequences arising with respect to the Bonds and the interest thereon.

Prospective purchasers of the Bonds should be aware that (i) interest on the Bonds is included in the effectively connected earnings and profits of certain foreign corporations for purposes of calculating the branch profits tax imposed by Section 884 of the Code, (ii) interest on the Bonds may be subject to a tax on excess net passive income of certain S corporations imposed by Section 1375 of the Code, (iii) interest on the Bonds is included in the calculation of modified adjusted gross income for purposes of determining taxability of social security or railroad retirement benefits, (iv) the receipt of interest on the Bonds by life insurance companies may affect the federal tax liability of such companies, (v) in the case of property and casualty insurance companies, the amount of certain loss deductions otherwise allowed is reduced by a specific percentage of, among other things, interest on the Bonds, (vi) registered owners acquiring the Bonds subsequent to initial issuance will generally be required to treat market discount recognized under Section 1276 of the Code as ordinary taxable income, (vii) the receipt or accrual of interest on the Bonds may cause disallowance of the earned income credit under Section 32 of the Code, (viii) interest on the Bonds is subject to backup withholding under Section 3406 of the Code in the case of registered owners that have not reported a taxpayer identification number and are not otherwise exempt from backup withholding, and (ix) registered owners of the Bonds may not deduct interest on indebtedness incurred or continued to purchase or carry the Bonds, and financial institutions may not deduct that portion of their interest expense allocated to interest on the Bonds.

In the opinion of Dickinson Wright PLLC, Bond Counsel, based on its examination of the documents described in its opinion, under existing law, the Bonds and the interest thereon are exempt from taxation by the State of Michigan and by any other taxing authority within the State of Michigan, except estate taxes and taxes on gains realized from the sale, payment or other disposition thereof.

Tax Treatment of Accruals on Original Issue Discount Bonds

For federal income tax purposes, the difference between the initial offering prices to the public (excluding bond houses and brokers) at which a substantial amount of the Bonds initially sold at a discount as shown on the cover page hereof (the "OID Bonds") is sold and the amount payable at the stated redemption price at maturity thereof constitutes “original issue discount.” Such discount is treated as interest excluded from federal gross income to the extent properly allocable to each registered owner thereof. The original issue discount accrues over the term to maturity of each such OID Bond on the basis of a constant interest rate compounded at the end of each six-month period (or shorter period from the date of original issue) with straight line interpolations between compounding dates. The amount of original issue discount accruing during each period is added to the adjusted basis of such OID Bonds to determine taxable gain upon disposition (including sale, redemption or payment on maturity) of such OID Bonds.

The Code contains certain provisions relating to the accrual of original issue discount in the case of registered owners of the OID Bonds who purchase such bonds after the initial offering of a substantial amount thereof. Registered owners who do not purchase such OID Bonds in the initial offering at the initial offering and purchase prices should consult their own tax advisors with respect to the tax consequences of ownership of such OID Bonds.

Amortizable Bond Premium

For federal income tax purposes, the difference between an original registered owner’s cost basis of the Bonds initially sold at a premium as shown on the cover page hereof (the "Original Premium Bonds") and the amounts payable on the Original Premium Bonds other than stated interest constitutes an amortizable bond premium. The same applies with respect to any Bond, if a registered owner’s cost basis exceeds the amounts payable thereon other than stated interest (collectively with the Original Premium Bonds held by the original registered owners, "Premium Bonds"). Such amortizable bond premium is not deductible from gross income, but is taken into account by certain corporations in determining adjusted current earnings for the purpose of computing the alternative minimum tax, which may also affect liability for the branch profits tax imposed by Section 884 of the Code. The amount of amortizable bond premium allocable to each taxable year is generally determined on the basis of the registered owner’s

7 yield to maturity determined by using the registered owner’s basis (for purposes of determining loss on sale or exchange) of such Premium Bonds and compounding at the close of each six-month accrual period. The amount of amortizable bond premium allocable to each taxable year is deducted from the registered owner’s adjusted basis of such Premium Bonds to determine taxable gain upon disposition (including sale, redemption or payment at maturity) of such Premium Bonds.

Future Developments

NO ASSURANCE CAN BE GIVEN THAT ANY FUTURE LEGISLATION OR CLARIFICATIONS OR AMENDMENTS TO THE CODE, IF ENACTED INTO LAW, WILL NOT CONTAIN PROPOSALS THAT COULD CAUSE THE INTEREST ON THE BONDS TO BE SUBJECT DIRECTLY OR INDIRECTLY TO FEDERAL OR STATE OF MICHIGAN INCOME TAXATION, ADVERSELY AFFECT THE MARKET PRICE OR MARKETABILITY OF THE BONDS, OR OTHERWISE PREVENT THE REGISTERED OWNERS FROM REALIZING THE FULL CURRENT BENEFIT OF THE STATUS OF THE INTEREST THEREON. FURTHER, NO ASSURANCE CAN BE GIVEN THAT ANY SUCH FUTURE LEGISLATION, OR ANY ACTIONS OF THE INTERNAL REVENUE SERVICE, INCLUDING, BUT NOT LIMITED TO, SELECTION OF THE BONDS FOR AUDIT EXAMINATION, OR THE AUDIT PROCESS OR RESULT OF ANY EXAMINATION OF THE BONDS OR OTHER BONDS THAT PRESENT SIMILAR TAX ISSUES, WILL NOT ADVERSELY AFFECT THE MARKET PRICE OF THE BONDS.

INVESTORS SHOULD CONSULT WITH THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THEIR ACQUISITION, HOLDING OR DISPOSITION OF THE BONDS AND THE TAX CONSEQUENCES OF THE ORIGINAL ISSUE DISCOUNT OR PREMIUM THEREON, IF ANY.

APPROVAL BY MICHIGAN DEPARTMENT OF TREASURY

The Authority and the County have each received a letter from the Department of Treasury of the State of Michigan stating that it is in material compliance with the criteria of the Revised Municipal Finance Act, Act 34, Public Acts of Michigan, 2001, as amended, for a municipality to be granted qualified status. The Authority and the County may therefore proceed to issue the Bonds without further approval from the Department of Treasury of the State of Michigan.

BOND COUNSEL’S RESPONSIBILITY

The fees of Dickinson Wright PLLC ("Bond Counsel") for services rendered in connection with its approving opinion are expected to be paid from Bond proceeds. Except to the extent necessary to issue its approving opinion as to the validity of the Bonds and the exemption of the Bonds and the interest thereon from taxation, and as hereafter stated, Bond Counsel has not been retained to examine or review, and has not examined or reviewed any financial documents, statements or materials that have been or may be furnished in connection with the authorization, issuance or marketing of the Bonds and accordingly will not express any opinion with respect to the accuracy or completeness of any such financial documents, statements or materials..

MUNICIPAL ADVISOR

The Authority has retained PFM Financial Advisors LLC, of Ann Arbor, Michigan, as municipal financial advisor (the “Municipal Advisor”) in connection with the issuance of the Bonds. In preparing the Official Statement, the Municipal Advisor has relied upon governmental officials, and other sources, which have access to relevant data to provide accurate information for the Official Statement, and the Municipal Advisor has not been engaged, nor has it undertaken, to independently verify the accuracy of such information. To the best of the Municipal Advisor’s knowledge and belief, the information contained in the Official Statement, which it assisted in preparing, while it may be summarized is complete and accurate. The Municipal Advisor is not a public accounting firm and has not been engaged by the Authority to compile, review, examine or audit any information in the Official Statement in accordance with accounting standards.

The Municipal Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities and therefore will not participate in the underwriting of the Bonds. PFM Financial Advisors LLC is registered with the Securities and Exchange Commission and the Municipal Securities Rulemaking Board as a municipal advisor.

8 Requests for information concerning the Authority should be addressed to PFM Financial Advisors LLC, 555 Briarwood Circle, Suite 333, Ann Arbor, Michigan 48108, (734) 994-9700. CONTINUING DISCLOSURE In connection with the issuance of the Bonds, the County, on behalf of itself and the Authority, will covenant for the benefit of the Bondholders and the Beneficial Owners (as hereinafter defined) pursuant to a resolution adopted by the Board of Commissioners of the County and a Continuing Disclosure Certificate to be delivered on the date of issuance of the Bonds to the purchaser thereof (the “Disclosure Certificate”), to provide or cause to be provided: (i) each year, certain financial information and operating data relating to the County for its preceding fiscal year (the “Annual Report”) by not later than the date seven months after the first day of its fiscal year, commencing with the Annual Report for the fiscal year ending December 31, 2016; provided, however, that if the audited financial statements of the County are not available by such date, they will be provided when and if available, and unaudited financial statements in a format similar to the audited financial statements then most recently prepared for the County will be included in the Annual Report; and (ii) timely notices of the occurrence of certain enumerated events, if material. Currently, the fiscal year of the County commences on January 1. “Beneficial Owner” means any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including any person holding Bonds through nominees, depositories or other intermediaries).

Each Annual Report will be filed with the Municipal Securities Rulemaking Board (“MSRB”) electronically through MSRB’s Electronic Municipal Market Access system (“EMMA”). If the County is unable to provide the MSRB its Annual Report by the date required, the County shall send, in a timely manner, to the MSRB through EMMA, a notice of the failure to file the Annual Report by such date. The notices of material events will be filed by the County with the MSRB through EMMA. These covenants have been made by the County in order to assist the purchaser of the Bonds and registered brokers, dealers and municipal securities dealers in complying with the requirements of subsection of (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Rule”). The information to be contained in the Annual Report, the enumerated events, the occurrence of which will require a notice, and the other terms of the Disclosure Certificate are set forth in Appendix E, “FORM OF CONTINUING DISCLOSURE CERTIFICATE”.

A failure by the County to comply with the Disclosure Certificate must be reported by the County in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such failure may adversely affect the transferability and liquidity of the Bonds and their market price.

Except as provided herein, the County has not, in the previous five years, failed to comply, in all material respects, with any previous continuing disclosure undertaking executed by the County pursuant to the Rule. The County has timely filed its audited financial statements and annual disclosure information over the past five years in compliance in all material respects with its previously executed continuing disclosure undertakings. However, the County omitted a section on percentage change in population in its 2012-2015 filings and did not provide the required Captured TIF Revenue in 2013; both for the 2007 Brownfield Authority Bonds. This information has since been posted. In addition, the County filed late material event notices of rating changes affecting its underlying rating and ratings of certain bond insurers. The County has since filed material event notices reflecting these rating changes and has taken steps to ensure that material event notices are filed on a timely basis in the future.

RATING

S&P Global Ratings, a division of S&P Global, Inc. ("S&P") has assigned, as of the date of delivery of the Bonds, its municipal bond rating of “__” to the Bonds.

No application has been made to any other ratings service for a rating on the Bonds. The Authority furnished to S&P certain materials and information in addition to that provided herein. Generally, rating agencies base their ratings on such information and materials, and on investigations, studies and assumptions. There is no assurance that such ratings will prevail for any given period of time or that they will not be revised downward or withdrawn entirely by S&P if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse affect on the market price of the Bonds. Any ratings assigned represent only the views of S&P. Further information is available upon request from S&P Global Ratings, 55 Water Street, 38th Floor, New York, New York 10041-0003, telephone: (212) 438-1000.

9 CERTIFICATION

The Authority has authorized the distribution of this Official Statement for use in connection with the initial sale of the Bonds. The Authority has reviewed the information contained within the Official Statement prepared on behalf of the Authority by PFM Financial Advisors LLC, and said Official Statement does not contain any material misstatements of fact nor omission of any material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

This Official Statement has been duly approved, executed and delivered by the Authority on the date as set forth on the front cover of this Official Statement.

INGHAM COUNTY BUILDING AUTHORITY, COUNTY OF INGHAM, STATE OF MICHIGAN

By: Peter A. Cohl Its: Chairperson

10 APPENDIX A COUNTY OF INGHAM GENERAL FINANCIAL, ECONOMIC & STATISTICAL INFORMATION LOCATION AND DESCRIPTION

Ingham County occupies an area of 576 square miles in the south central portion of Michigan’s lower peninsula. Lansing, the State capital, represents thirty percent of Ingham County’s property valuation and is the largest retail center in the area. Several large industrial firms are located within the County, with manufacturing, government and education representing the major employment source. Agriculture is important to the County, including dairy, livestock and crop farming. Michigan State University, in the City of East Lansing, is the State’s largest university. POPULATION

The U.S. Census Bureau reported historical and 2015 estimated populations for the County are as follows:

County of % Ingham Change 2015 U.S. Census Estimate 283,491 0.92% 2010 U.S. Census 280,895 0.56 2000 U.S. Census 279,320 -0.92 FISCAL YEAR

The County’s fiscal year begins on January 1st and ends on December 31st. FORM OF GOVERNMENT

Ingham County is governed by a fourteen member Board of Commissioners (the "Board"). Each Commissioner is elected on a partisan basis for terms of two years from single-member districts that are approximately equal in population. The Board annually elects from its ranks a Chairperson, Chairperson Pro-Tem and Vice Chairperson by majority vote. The administration of the County, other than as delegated to elected officials is guided by the County Controller who is appointed by a two-thirds vote of the Board of Commissioners and serves at its pleasure. Primary functions of the Board include determination of type and level of County services, adoption of the County Budget, equalization of County property values, legislative oversight of County services and the appointment of various boards, commissions and County Officials. PROPERTY VALUATIONS

On March 15, 1994, the electors of the State approved an amendment to the Michigan Constitution permitting the Legislature to authorize ad valorem taxes on a non-uniform basis. The legislation implementing this constitutional amendment added a new measure of property value known as “Taxable Value.” Since 1995, taxable property has had two valuations—state equalized valuation (“SEV”) and Taxable Value. Property taxes are levied on Taxable Value. Generally, the Taxable Value of property is the lesser of: (a) the property’s Taxable Value in the immediately preceding year minus any losses, multiplied by the lesser of 1.05 or the inflation rate, plus all additions, or (b) the property’s current SEV. Under certain circumstances, therefore, the Taxable Value of property may be different from the same property’s SEV.

When property is sold or transferred, Taxable Value is adjusted to the SEV, which under existing law is 50% of the current true cash value. The Taxable Value of new construction is equal to current SEV. The Taxable Value and SEV of existing property are also adjusted annually for additions and losses.

A-1 Responsibility for assessing taxable property rests with the local assessing officer of each township and city. Any property owner may appeal the assessment to the local assessor, to the local board of review and ultimately to the Michigan Tax Tribunal.

In addition to limiting the annual increase in Taxable Value, the Michigan Constitution mandates a system of equalization of assessments. Although the assessor for each local unit of government within a county is responsible for actually assessing at 50% of true cash value, adjusted for Taxable Value purposes, the final SEV and Taxable Value are arrived at through several steps. Assessments are established initially by the municipal assessor.

Municipal assessments are then equalized to the 50% levels as determined by the County Department of Equalization. Thereafter, the State equalizes the various counties in relation to each other. SEV is important, aside from its use in determining Taxable Value for the purpose of levying ad valorem property taxes, because of its role in the spreading of taxes between overlapping jurisdictions, the distribution of various State aid programs, State revenue sharing and in the calculation of debt limits.

Property that is exempt from property taxes (e.g., churches, government property, public schools) is not included in the SEV or Taxable Value data in this Appendix A. Property granted tax abatements under Act 198, Public Acts of Michigan, 1974, as amended, is recorded on a separate tax roll while subject to tax abatement. The valuation of tax abated property is based upon SEV but is not included in either the SEV or Taxable Value data in this Appendix A except as noted. HISTORY OF VALUATIONS A history of the property valuations in the County is shown below:

Property Levy/ Total State Value as Valuation Taxable Percent Equalized Percent of 12/31 Year Value Change Value Change 2015 2016 $7,386,544,658 1.50% $8,348,398,957 4.84% 2014 2015 7,277,720,492 3.40 7,962,695,894 6.16 2013 2014 7,038,082,601 1.43 7,500,943,082 2.57 2012 2013 6,939,015,586 -1.25 7,313,047,709 -1.36 2011 2012 7,026,714,409 -4.29 7,413,880,395 -6.04 2010 2011 7,341,744,686 -3.22 7,890,078,485 -5.08 2009 2010 7,585,806,239 -5.57 8,312,157,742 -8.80 2008 2009 8,033,032,230 0.56 9,113,866,519 -4.75 2007 2008 7,988,684,377 1.67 9,568,110,395 -1.50 2006 2007 7,857,288,668 4.45 9,714,044,382 2.91

History of Valuations $12,000 $10,000 $8,000 $6,000 Millions $4,000 $2,000 $0 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Taxable Value* State Equalized Value

A summary of the 2016 valuation subject to taxation is as follows:

2016 Taxable Value $7,386,544,658 Plus: 2016 Equivalent IFT Taxable Value¹ 48,997,533 Total 2016 Equivalent Taxable Value $7,435,532,191

1See “INDUSTRIAL FACILITY TAX ABATEMENTS” herein. Source: Ingham County Equalization Department A-2 Valuation Composition

A breakdown of the County’s 2016 Taxable Value by class, use and municipality is as follows:

2016 Percent By Class: Taxable Value of Total Real Property $6,733,997,938 91.17% Taxable Value by Use Personal Property 652,546,720 8.83 23.28% 0.03% 8.83% 2.48% TOTAL $7,386,544,658 100.00% By Use: Agricultural $183,248,040 2.48% Commercial 1,719,873,349 23.28 Industrial 158,610,525 2.15 Residential 4,670,090,323 63.23 2.15% 63.22% Developmental 2,175,701 0.03 Agricultural Commercial Industrial Personal 652,546,720 8.83 Residential Developmental Personal TOTAL $7,386,544,658 100.00%

Source: Ingham County Equalization Department

By Municipality: Townships Alaiedon Township $203,050,197 2.75% Aurelius Township 143,033,054 1.94 Bunker Hill Township 78,250,386 1.06 Delhi Township 718,888,120 9.73 Ingham Township 71,997,301 0.97 Lansing Charter Township 282,316,471 3.82 Leroy Township 119,612,194 1.62 Leslie Township 91,859,650 1.24 Locke Township 71,501,661 0.97 Meridian Charter Township 1,640,026,432 22.20 Onondaga Township 104,628,888 1.42 Stockbridge Township 224,082,262 3.03 Vevay Township 127,943,854 1.73 Wheatfield Township 72,076,611 0.98 White Oak Township 71,152,239 0.96 Williamstown Township 227,345,665 3.08 Cities East Lansing $867,754,263 11.75 Lansing 1,919,699,800 25.99 Leslie 34,319,127 0.46 Mason 212,275,551 2.87 Williamston 104,730,932 1.42 $7,386,544,658 100.00%

Source: Ingham County Equalization Department INDUSTRIAL FACILITY TAX ABATEMENTS Under the provisions of Act 198 of the Public Acts of Michigan, 1974, as amended (“Act 198”), plant rehabilitation districts and/or industrial development districts may be established. Businesses in these districts are offered certain property tax incentives to encourage restoration or replacement of obsolete facilities and to attract new facilities in the area. The industrial facilities tax (“IFT”) is paid, at a lesser effective rate and in lieu of ad valorem property taxes, on such facilities for a period of up to 12 years. Qualifying facilities are issued abatement certificates for this period.

A-3 After expiration of the abatement certificate, the then-current SEV of the facility is returned to the ad valorem tax roll. The owner of such facility may obtain a new certificate, provided it has complied with the provisions of Act 198.

The County has several IFT abatements outstanding with a total 2016 Taxable Value of $97,995,066, all of which is taxed at half rate. For purposes of computing “Equivalent” Taxable Value, it has been shown in the “History of Valuations” table above as 50% of the Taxable Value.

Source: Ingham County Equalization Department PROPERTY TAX REFORM

The enactment of Michigan Public Acts 153 and 154 of 2013, together with the subsequent enactment of Michigan Public Acts 80, 81, and 86 through 93 of 2014, significantly reformed personal property tax in Michigan. The voters of the State approved a referendum on August 4, 2014, to which all of these acts were tied, and therefore these acts will continue in effect.

Under these acts, beginning in 2014, owners of industrial and commercial personal property with a total true cash value of $80,000 or less may annually file an affidavit claiming a personal property tax exemption. To be eligible for the exemption, all of the commercial or industrial personal property within a city or township that is owned by, leased to, or controlled by the claimant has to have an accumulated true cash value of $80,000 or less. Beginning in 2016, owners of certain eligible manufacturing personal property that was either purchased after December 31, 2012, or that is at least 10 years old may claim an exemption from personal property tax by filing an affidavit claiming the exemption. By 2022, all eligible manufacturing personal property will be at least 10 years old or purchased after December 31, 2012, so that it could be exempted from personal property tax.

The legislation provides for replacement of revenues lost by local governments, including counties, cities, villages and townships, due to these exemptions beginning in 2016. Those revenues will be from a portion of the current State use tax that will be set aside as a “local community stabilization share” of the use tax, will not be subject to the annual appropriations process, and will automatically be provided to a “local community stabilization authority” for distribution pursuant to a statutory formula anticipated to provide 100% reimbursement to local governments for losses due to the new personal property tax exemptions.

The ultimate nature, extent and impact of other tax and revenue measures, which are from time to time considered, cannot currently be predicted. No assurance can be given that any future legislation or administrative action, if enacted or implemented, will not adversely affect the market price or marketability of the Notes, or otherwise prevent Noteholders from realizing the full current benefit of an investment therein. Purchasers of the Notes should be alert to the potential effect of such measures upon the Notes the security therefor, and the operations of the County.

MAJOR TAXPAYERS

The ten largest taxpayers in Ingham County and their 2016 Taxable Value and Industrial Facilities Tax Valuations are as follows: Total Equivalent IFT Total Effective Taxpayer Product/Service Valuation Value Valuation Enbridge Energy LP Utility $135,582,045 $0 $135,582,045 Consumers Energy Company Utility 103,689,667 0 103,689,667 Jackson National Life Insurance 45,959,337 0 45,959,337 Enbridge Pipelines (Toledo), Inc. Pipeline 33,775,950 0 33,775,950 Dart Container Corporation Styrofoam cups, etc. 20,177,821 13,402,719 33,580,540 Meridian Mall, Ltd. Partnership Shopping mall 31,029,528 0 31,029,528 Retail Properties of America, Inc. Real estate 27,436,848 0 27,436,848 Tri County Electric Cooperative Utility 26,079,600 0 26,079,600 C150 2929 Hannah Lofts LLC Real estate 20,632,512 0 20,632,512 Gestamps US Hardtech, Inc. Steel distribution 8,115,853 11,665,148 19,781,001 TOTALS $452,479,161 $25,067,867 $477,547,028 Total 2016 Taxable Value, including IFT totals $7,484,539,724 $7,582,534,790 Total 10 Taxpayers as a % of 2016 Total Taxable Value 6.05% 6.30%

Source: Ingham County Equalization Department A-4 CONSTITUTIONAL ROLLBACK AND ASSESSMENT CAPS

Article IX, Section 31 of the Michigan Constitution requires that if the total value of existing taxable property in a local taxing unit, exclusive of new construction and improvements, increases faster than the U.S. Consumer Price Index from one year to the next, the maximum authorized tax rate for that local taxing unit must be reduced through a Millage Reduction Fraction unless reversed by a vote of the electorate of the local taxing unit. TAX RATE LIMITATIONS

Article IX, Section 6, Michigan Constitution of 1963 provides, in part:

“Except as otherwise provided in this Constitution, the total amount of general ad valorem taxes imposed upon real and tangible property personal property for all purposes in any one year shall not exceed 15 mills on each dollar of the assessed valuation of property as finally equalized.”

Section 6 further provides that by a majority vote of qualified electors of the County, the 15 mill limitation may be increased to a total of not to exceed 18 mills, and the millage of the local units involved shall then permanently be fixed within that greater millage limitation.

Act 62, Public Acts of Michigan, 1933, as amended, defines local units as counties, townships, villages, cities, school districts, community college districts, intermediate school districts, and all other division, districts, and organizations of government that are or may be established with the power to levy taxes, except villages and cities for which there are provisions in their charters or general law fixing maximum limits on the power to levy taxes against property.

The County’s current millage rates are as follows:

2016 Millage Maximum Allowable Purpose Authorized Millage after Rollback Operating 6.8000 6.4206 Airport Authority 0.6990 0.7079 Indigent Veterans Relief Fund 0.3300 0.3300 County Transportation 0.4800 0.4800 911 (Emergency Dispatch) 0.8500 0.8500 Juvenile Justice 0.6000 0.6000 Potter Park Zoo 0.4100 0.4100 Farmland Preservation 0.1400 0.1400 Special Transportation 0.1200 0.1200 Animal Control 0.2400 0.2400 Parks and Trails 0.5000 0.5000 Health Services 0.3500 0.3500

In addition, Article IX, Section 6, permits the levy of millage in excess of the above for:

1. All debt service on tax supported notes issued prior to December 23, 1978 or tax supported issues which have been approved by the voters for which the County has pledged its full faith and credit.

2. Operating purposes for a specified period of time provided that such increased millage approved by a majority of the qualified electors of the local unit.

A-5 TAX RATES – (PER $1,000 OF VALUATION)

The following table shows the total County tax rates for the past five years.

Taxing Jurisdiction 2016 2015 2014 2013 2012 County of Ingham Operating 6.35 6.35 6.35 6.35 6.35 Airport Authority 0.70 0.75 0.75 0.75 0.70 County Transportation* 0.60 0.60 0.60 0.60 0.60 911 (Emergency Police) 0.84 0.84 0.84 0.84 0.84 Juvenile Justice 0.60 0.60 0.60 0.60 0.60 Potter Park Zoo 0.41 0.41 0.41 0.41 0.41 Farmland Preservation 0.14 0.14 0.14 0.14 0.14 Indigent Veterans Relief Fund 0.03 0.03 0.03 0.03 0.03 Animal Control 0.24 0.00 0.00 0.00 0.00 Parks and Trails 0.50 0.50 0.50 0.00 0.00 Health Services 0.35 0.35 0.35 0.52 0.52 County Total 10.76 10.58 10.58 10.24 10.20 Other Tax Rates State Education Tax ¹ 6.00 6.00 6.00 6.00 6.00 Capital Library 1.56 1.56 1.56 1.56 1.56 Ingham County I/S/D 5.99 5.99 5.99 5.99 5.99 Lansing Community College 3.81 3.81 3.81 3.81 3.81 *Includes 0.48 for special transportation and 0.12 for public transportation. ¹The State of Michigan levies 6.00 mills for school operating purposes on all principal residence and non-principal residence property located within the School District. Source: Ingham County Equalization Department and individual taxing jurisdictions.

TAX LEVIES AND COLLECTIONS

The County’s fiscal year begins January 1 and ends December 31. Its property taxes are due July 1 and December 1 of each fiscal year and are payable without penalty until the following February 14. All real property taxes remaining unpaid on March 1st of the year following the levy are turned over to the County Treasurer for collection. Ingham County annually pays from its Tax Revolving Fund delinquent taxes on real property to all taxing units in the County, including the County’s, shortly after the date delinquent taxes are returned to the County Treasurer for collection.

A history of tax levies and collections for the County is as follows:

Fiscal Total Collections to March 1, Year Tax Levy Year Following Levy 2016 $44,200,000 N/A 2015 43,143,618 $41,846,076 96.99% 2014 41,800,465 39,452,982 94.38 2013 41,260,820 39,437,838 95.58 2012 41,681,932 39,723,759 95.30

Source: Ingham County Equalization Department

A-6 REVENUES FROM THE STATE OF MICHIGAN

The County receives revenue sharing payments from the State of Michigan under the State Revenue Sharing Act of 1971, as amended (the “Revenue Sharing Act”), on a per capita basis. The County’s revenue sharing distribution is subject to annual legislative appropriation and may be reduced or delayed by Executive Order during any State fiscal year in which the Governor, with the approval of the State Legislature’s appropriation committees, determines that actual revenues will be less than the revenue estimates on which appropriations were based.

The State’s ability to make revenue sharing payments to the County in the amounts and at the times specified in the Revenue Sharing Act is subject to the State’s overall financial condition and its ability to finance any temporary cash flow deficiencies. Act 357, Public Acts of Michigan, 2004 (“Act 357”) amended the General Property Tax Act to temporarily eliminate statutory revenue sharing payments to counties by creating a reserve fund, against which counties could draw in lieu of annual revenue sharing payments, paid for by the permanent advancement of the counties’ property tax levy from December to July each year, beginning in 2005. Under Act 357, a county would resume receiving state revenue sharing payments in the first year in which the county’s property tax revenue reserve was less than the amount the county would have otherwise received in state revenue sharing payments. The County resumed receiving revenue sharing payments during its fiscal year ended December 31, 2013.

Under the State’s fiscal year 2016 (ending September 30, 2016) budget, signed into law on June 18, 2015 by Governor Snyder, a portion of county revenue sharing payment distributions are made pursuant to the Revenue Sharing Act and a portion are distributed through an incentive based program called the county incentive program (“CIP”). For fiscal year 2016, the county revenue sharing program has an appropriation of $214.7 million, an increase of $3.5 million over fiscal year 2015 amounts, with $2.8 million of the increased amount being distributed pursuant to the Revenue Sharing Act and $700,000 being distributed through the CIP. The CIP provides eligible counties distributions for complying with “best practices” to increase transparency. Eligible counties are those that would be eligible to resume receiving state revenue sharing payments under Act 357.

Under the fiscal year 2016 CIP, an eligible county can receive CIP payments if it meets requirements for accountability and transparency, including making a citizen’s guide to its finances, a performance dashboard, a debt service report and a two-year budget projection available for public viewing. Any portion of the CIP that the County would be eligible to receive would be subject to certain benchmarks that the County would need to meet, and there can be no assurance of what amount, if any, the County would receive under CIP. The County anticipates meeting the requirements to receive fiscal year 2016 CIP payments.

Purchasers of the Bonds should be alert to further modifications to revenue sharing payments to Michigan local governmental units, to the potential consequent impact upon the County's general fund condition, and to the potential impact upon the market price or marketability of the Bonds resulting from changes in revenues received by the County from the State.

The following table sets the amounts of annual revenue sharing payments from the State for the County’s fiscal years ended December 31, 2012 through December 31, 2016.

County of Ingham Revenue Fiscal Year Ended Sharing December 31st Payments¹ 2016 $ 6,106,607 2015 6,078,069 2014 5,247,681 2013 4,714,878 2012 4,653,608

¹Amounts do not include state gas and weight tax distributions. Source: Web site http://treasury.state.mi.us, Audited Financial Statements and the County of Ingham.

A-7 PENSION FUND

Plan Description. The County's defined benefit pension plan provides certain retirement, disability and death benefits to plan members and beneficiaries. The County participates in the Municipal Employees Retirement System of Michigan (MERS), an agent multiple-employer plan administered by the Retirement Board of MERS. Act No. 427 of the Public Acts of 1984, as amended, establishes and amends the benefit provisions of the participants in MERS. The Municipal Employees Retirement System of Michigan issues a publicly available financial report that includes financial statements and required supplementary information for MERS. That report may be obtained by writing to the MERS at 1134 Municipal Way, Lansing, Michigan 48917 or by calling (800) 767-6377.

Benefits Provided. The plan provides certain retirement, disability and death benefits to plan members and beneficiaries. PA 427 of 1984, as amended, established and amends the benefit provisions of the participants in MERS.

Based on the most recent actuarial valuations of the plans as of December 31, 2014, Plan membership consisted of the following:

Retirees and beneficiaries currently receiving benefits 949 Inactive, DROP and non-retired members 200 Active Plan members 1,049 Total employees covered by MERS 2,198

Contributions. Article 9, Section 24 of the State of Michigan constitution requires that financial benefits arising on account of employee service rendered each year be funded during the year. Accordingly, MERS retains an independent actuary to determine the annual contribution. The employer is required to contribute amounts at least equal to the actuarially determined rate, as established by the MERS Retirement Board. The actuarially determine rate is the estimated amount necessary to finance the costs of benefits earned by the plan members during the year, with an additional amount to finance any unfunded accrued liability. The employer may establish contribution rates to be paid by its covered employees.

Schedule of Employer Contributions

Year Annual Ended Required Percentage December 31 Contribution Contributed 2015 $9,702,306 100.00% 2014* 9,662,706 100.00 2013 8,362,869 100.00 2012 7,514,037 100.00 2011 6,785,666 100.00

Department of Road Employees

Plan Description. The Road Department's defined benefit pension plan provides certain retirement, disability and death benefits to plan members and beneficiaries. The Road employees participates in the Municipal Employees Retirement System of Michigan (MERS), an agent multiple-employer plan administered by the Retirement Board of MERS. Act No. 427 of the Public Acts of 1984, as amended, establishes and amends the benefit provisions of the participants in MERS. The Municipal Employees Retirement System of Michigan issues a publicly available financial report that includes financial statements and required supplementary information for MERS. That report may be obtained by writing to the MERS at 1134 Municipal Way, Lansing, Michigan 48917 or by calling (800) 767-6377.

*2014 includes substantial one time only payments due to the final reconciliation for previous service for the 911 employees transferring from the City of Lansing

A-8 Medical Care Facility

Plan Description. The Facility participates in the Michigan Municipal Employees' Retirement System (MERS), an agent multiple-employer defined benefit pension plan that covers all employees of the Facility through Ingham County. The Facility provides retirement, disability, and death benefits to plan members and their beneficiaries. MERS issues a publicly available financial report that includes financial statements and required supplemental information for MERS. That report may be obtained by writing to the system at 1134 Municipal Way, Lansing, Ml 48917. OTHER POST-EMPLOYMENT BENEFITS Plan Description. The Ingham County Retiree Health Care Plan (the “Plan”) is a single-employer defined benefit healthcare plan administered by the Retiree Health Care Board (the “Board”). The Plan was adopted and established by the Ingham County Board of Commissioners. The Plan provides postemployment healthcare and life insurance benefits to eligible retirees of the primary government in accordance with the various labor contracts and personnel policies. At December 31, 2015, 657 retired employees were eligible to participate, of which 469 participated. The assets of the Plan are reported as another employee benefits trust fund in the accompanying financial statements; a separate, stand-alone report is not issued.

Three-Year Trend Information

Year Annual Percentage of Ended OPEB Annual OPEB Net OPEB December 31 Cost Cost Contributed Obligation 2015 $7,188,582 69.34% $34,920,847 2014 7,109,968 58.24 32,716,821 2013 6,856,669 49.84 29,747,566

Retiree Health Care Plan – County

Schedule of Funding Progress

Unfunded Ratio of Valuation Actuarial Actuarial UAAL to

Date Actuarial Value Accrued Accrued Funded Covered Covered December 31 of Assets Liability (AAL) Liability (UAAL) Ratio Payroll Payroll

2014 $7,729,468 $91,119,729 $83,390,261 8.48% $57,516,000 144.99% 2012 3,913,176 86,934,173 83,020,997 4.50 55,517,218 149.54

2010 2,480,058 84,813,721 82,333,663 2.92 57,756,718 142.55

2008 -- 79,274,189 79,274,189 -- 51,746,029 153.20

2006 -- 91,516,399 91,516,399 -- 49,531,695 184.76

Schedule of Employer Contributions

Year Annual Ended Required Percentage December 31 Contribution Contributed 2015 $6,957,538 71.64% 2014 6,849,848 60.45 2013 6,586,392 51.90 2012 6,366,383 40.90 2011 6,092,233 38.50

A-9 Retiree Health Care Plan - Medical Care Facility

Facility employees participate in a single employer defined benefit healthcare plan. The Plan provides postemployment healthcare and life insurance benefits to eligible retirees in accordance with labor contracts and personnel policies. The plan is closed to new participants with hire dates subsequent to January 1, 2013.

Schedule of Funding Progress

Unfunded Ratio of Valuation Actuarial Actuarial UAAL to

Date Actuarial Value Accrued Accrued Funded Covered Covered December 31 of Assets Liability (AAL) Liability (UAAL) Ratio Payroll Payroll

2014 -- $7,778,271 $7,778,271 -- $10,299,132 75.52%

2012 -- 6,261,514 6,261,514 -- 9,942,346 62.98%

2010 -- 5,655,037 5,655,037 -- 9,517,974 59.41%

2008 -- 4,290,944 4,290,944 -- 8,953,011 47.93%

2006 -- 9,268,458 9,268,458 -- 7,287,609 127.18%

Schedule of Employer Contributions

Year Annual Ended Required Percentage December 31 Contribution Contributed 2015 $801,299 28.00% 2014 596,616 39.00 2013 897,050 36.00 2012 553,423 40.00 2011 527,793 37.00

Retiree Health Care Plan – Road

The Transportation and Roads Department provides certain retiree health care benefits and life insurance benefits to all applicable employees, in accordance with union agreements and/or personnel policies. In 2008, the Transportation and Roads Department offered the retirees a choice between two plans. One plan was a PPO and the other plan was a HMO, both are health programs that pay for claims (less deductible and co-pay) in accordance with the group from which the employee retired. The Transportation and Roads Department pays for 100% of the health portion of the insurance while the retiree pays for the prescription portion of the premium. At 12/31/15, 74 retirees meet plan eligibility requirements and 49 were participating.

In June 2012, the County merged with the Ingham County Road Commission. The Road Commission was dissolved and the Department of Transportation and Road was established. The actuary valuations as of December 31, 2012 and 2014 were performed under the same assumptions as the County's plan. These assumptions may differ from the past actuarial reports performed for the prior Road Commission.

Schedule of Funding Progress

Unfunded Ratio of Valuation Actuarial Actuarial UAAL to Date Actuarial Value Accrued Accrued Funded Covered Covered December 31 of Assets Liability (AAL) Liability (UAAL) Ratio Payroll Payroll

2014 -- $13,583,867 $13,583,867 -- $3,819,303 355.66% 2012 -- 12,924,820 12,924,820 -- 3,539,959 365.11%

2010 -- 13,679,694 13,679,694 -- 3,658,008 373.97%

2008 -- 13,377,603 13,377,603 -- 4,038,205 331.28% 2006 -- 18,970,649 18,970,649 -- 3,341,100 567.80%

A-10 Schedule of Employer Contributions

Year Annual Ended Required Percentage December 31 Contribution Contributed 2015 $880,976 53.92% 2014 823,238 44.20 2013 791,575 69.03 2012 1,227,616 45.20 2011 1,195,280 48.10

Source: County of Ingham Audited Financial Statements

A-11 LABOR FORCE A breakdown of the number of employees of the County and their affiliation with organized groups follows:

No. of Exp. Date Employee Group Employees Bargaining Unit of Contract Local 1499 of the American Federation of State, County, and Municipal Employees AFL-CIO, Council 25 (AFSCME) Ingham County Road Department - Road Workers 48 AFSCME 12/31/2017 Command Officers Association of Michigan (COAM) Ingham County 911 Supervisory Division 6 8011 12/31/2017 Capitol City Labor Program, Inc. (CCLP) Animal Control Officers, License Enforcement Officers, Animal Shelter Operators and Field Supervisory Officer. 11 405 12/31/2017 Corrections Units 63 404 12/31/2017 Law Enforcement Unit 51 404 12/31/2017 Supervisory Officers 24 412 12/31/2017 911 Non-Supervisory Unit 45 411 12/31/2017 Ingham County Employees' Association (ICEA) Assistant Prosecuting Attorney's Division 31 216 12/31/2017 County Professionals 119 202 12/31/2017 County Professionals/Jail Nurses 5 222 12/31/2017 Court Professionals 38 207 12/31/2017 Park Rangers 6 292 12/31/2017 Public Health Nurses Unit 16 260 12/31/2017 Managerial and Confidential Employees Ingham County and Thirtieth Judicial Circuit Court and 55th District Court, and Ingham County Probate Court Managerial & Confidential Employee Personnel Manual Confidentials 32 2323 12/31/2017 Court Officer/Research Clerks 7 3030 12/31/2017 Managers 85 303 12/31/2017 Professionals 22 2424 12/31/2017 Michigan Nurses Association (MNA) Nurse Practitioners/Clinic Nurses Unit 45 206 12/31/2017 Office and Professional Employees International Union (OPEIU) Local 459, AFL-CIO for the Circuit Court/Family Division Professional Employees 32 1414 12/31/2017 Local 512 of the Office and Professional Employees, International Union (OPEIU) Supervisory Unit - Ingham County Road Department 6 OPEIU/SUPS 12/31/2017 Technical/Clerical Unit - Ingham County Road Department 10 OPEIU 12/31/2017 International Brotherhood of Teamsters, Chauffeurs and Warehousemen, Local 580 (Teamsters Zoo) Potter Park Zoo Supervisory Unit 5 8000 12/31/2017 United Automobile Aerospace and Agricultural Implement Workers of American (UAW) Ingham County Unit Local 2256 Technical, Office, Para-professional and Service Employee 365 101 12/31/2017 Zoo Unit (UAW Zoo) 20 292 12/31/2017 Non Union - Other Judges 11 1313 State Compensation Elected Officials 6 1515 Board of Commissioners 14 BOC

TOTAL EMPLOYED 1,123

Source: Ingham County

A-12 DEBT STATEMENT* - (As of 04/20/17 – including Bonds described herein.)

DIRECT DEBT: Unit County's Dated Bond Final Amount Share Share Date Purpose Type Maturity Outstanding Amount Amount GENERAL OBLIGATION BONDS 06/01/99 Drainage District, Grosbeck Park, LT GOSA 10/01/19 450,000 422,682 27,318 03/01/02 Sewer, Tobias/Linn (Williamston), LT GO 05/01/22 725,000 725,000 0 04/01/02 Drain, Tobias/Linn, LT GOSA 05/01/22 630,000 630,000 0 05/01/03 Drain, Lansing Twp. #2, Stoner Clement, LT GOSA 05/01/23 280,000 229,768 50,232 07/01/03 Drainage District, Cook & Thorburn, LT GOSA 05/01/23 280,000 263,704 16,296 07/01/03 Drainage District, Diehl, LT GOSA 05/01/23 490,000 373,380 116,620 11/01/03 Kalamink Creek, Utilities Drainage GOSA 05/01/24 300,000 300,000 0 07/01/06 Drain, Briarwood, LT GOSA 05/01/26 1,210,000 919,600 290,400 05/28/09 Drain, Gilbert & West Town, LT GOSA 05/01/45 1,702,701 1,496,840 205,861 05/26/10 Drainage District, Cook & Thorburn, LT GOSA 05/01/30 7,270,000 1,185,736 6,084,264 11/30/10 Refunding, LT GO 05/01/35 3,875,000 0 3,875,000 08/03/11 Drainage District, Kalamink Creek, LT GOSA 05/01/31 1,650,000 176,550 1,473,450 08/17/12 Drainage District, Gilbert, Loch Woode, LT GOSA 05/01/26 540,000 374,220 165,780 09/13/12 Drain, Kinawa View, LT GOSA 05/01/32 640,000 359,168 280,832 04/10/13 Drainage District, North Onondaga, LT GOSA 05/01/33 1,595,000 1,311,562 283,438 07/22/13 Ember Oaks Drain Drainage District GOSA 05/01/32 765,000 765,000 0 03/22/13 Drainage District, Burrell Intercounty GOSA 05/01/32 600,000 569,750 30,250 08/15/13 Maple Shade Drain Drainage District, LT GOSA 05/01/33 155,000 116,185 38,815 03/05/14 Green Drain Drainage District GOSA 05/01/34 540,000 540,000 0 06/03/14 Drain, Green #4, LT GOSA 05/01/34 4,860,000 3,095,820 1,764,180 12/02/14 Fowler Drain GOSA 05/01/35 600,000 539,700 60,300 06/23/15 Mud Creek Drain Drainage District GOSA 05/01/35 1,995,000 1,995,000 0 06/29/15 Drainage District, Towar Gardens & Branches, LT GOSA 05/01/26 3,170,000 2,053,810 1,116,190 06/29/15 Drainage District, Matthew L. Bugbee GOSA 05/01/26 720,000 689,872 30,128 06/29/15 Drainage District, Towar Snell Refunding, LT GOSA 05/01/26 880,000 767,978 112,022 11/24/15 Drainage District, Groesbeck, LT GOSA 05/01/45 12,125,000 11,741,357 383,643 07/28/16 Drainage District, Smith, LT GOSA 05/01/36 3,545,000 3,317,961 227,039 07/28/16 Drainage District, Stimson, LT GOSA 05/01/36 2,995,000 2,569,810 425,190 02/22/17 Webberville Consolidated Drain Drainage District, LT GOSA 05/01/47 6,010,000 5,095,000 915,000 03/23/17 Blue Spotted Salamander Drain Bonds, LT GOSA 05/01/37 945,000 819,822 125,178 __/__/__ Community Mental Health Building Bonds GO __/__/__ 10,000,000 0 10,000,000

GENERAL OBLIGATION-LONG TERM NOTES 12/22/08 Drain, Burgess and Branches, LT GOSA 05/01/24 361,000 303,060 57,940 07/15/10 Drainage, Blakslee, LT GOSA 05/01/25 242,000 0 242,000 07/15/10 Drain, Cluckey, Hearthside Acres Branch, LT GOSA 05/01/25 85,000 0 85,000 09/19/11 Drainage District, Deer Creek, Holt Road GOSA 05/01/26 287,000 0 287,000

BUILDING AUTHORITY AND BROWNFIELD AUTHORITY BONDS 05/01/03 Correctional Facilities, LT BA 10/01/22 965,000 0 965,000 09/29/05 Refunding, LT BA 07/01/18 1,375,000 0 1,375,000 12/28/05 Joint Courts, LT Refunding BA 05/01/19 1,382,192 0 1,382,192 12/01/07 Brownfield Redevelopment Authority, LT BA 08/01/27 1,380,000 0 1,380,000 12/21/10 BA, 911 Center, LT BA 10/01/30 2,345,000 0 2,345,000 02/09/11 Brownfield Redevelopment Authority, LT BA 08/01/26 2,485,000 0 2,485,000 TOTAL DIRECT DEBT 82,449,893 43,748,335 $38,701,558 Preliminary, subject to change. Source: Municipal Advisory Council of Michigan

A-13

OVERLAPPING DEBT:

Ingham County Municipality Share Cities $104,581,749 Townships 66,238,329 Villages 1,122,147 School Districts 375,648,375 Intermediate School Districts 1,289,899 Community Colleges 46,883,625

TOTAL OVERLAPPING DEBT $595,764,124 NET DIRECT AND OVERLAPPING DEBT $634,465,682 *Preliminary, subject to change.

DEBT RATIOS*

County of Ingham Estimated Population 283,491 2016 Taxable Value $7,386,544,658 2016 State Equalized Value (SEV) $8,348,398,957 2016 True Cash Value (TCV) $16,696,797,914

Per Capita 2016 Taxable Value 26,055.66 Per Capita 2016 State Equalized Value 29,448.55 Per Capita 2016 True Cash Value 58,897.10

Per Capita Net Direct Debt 136.52 Per Capita Net Direct and Overlapping Debt 2,238.05

Percent of Net Direct Debt of 2016 Taxable Value 0.52% Percent of Net Direct and Overlapping Debt of 2016 Taxable Value 8.59%

Percent of Net Direct Debt of 2016 SEV 0.46% Percent of Net Direct and Overlapping Debt of 2016 SEV 7.60%

Percent of Net Direct Debt of 2016 TCV 0.23% Percent of Net Direct and Overlapping Debt of 2016 TCV 3.80%

* Preliminary, subject to change. LEGAL DEBT MARGIN* - (As of 04/20/17 - including Bonds described herein.) 2016 State Equalized Value $8,348,398,957 Legal Debt Limit - 10% of SEV $834,839,896

Total Bonded Debt Outstanding 38,701,558 Less: No Credit Pledged 0 Net Amount Subject to Legal Debt Limit (38,701,558)

LEGAL DEBT MARGIN AVAILABLE $796,138,338 * Preliminary, subject to change. DEBT HISTORY The County has no record of default on its obligations.

A-14 FUTURE FINANCING

The County is considering several projects that bonds may be issued for including the Furley, Montgomery and Nemoka drains at approximately $30 to $35 million, an animal shelter facility at approximately $5.5 million, improvements to the County Medical Care Facility at approximately $8 million and is also considering replacement of the County jail. Costs for the jail project have not yet been determined. The County anticipates issuing a delinquent tax note in the approximate amount of $12,000,000 in June 2017.

MAJOR EMPLOYERS

Listed below are the largest employers that are located within the County of Ingham:

Approx. No. Employer Product or Service of Employees Within Ingham County (634 or more) State of Michigan (Eaton & Ingham Co.) Government 13,700 Michigan State University Education 10,725 Sparrow Hospital System Health care 5,735 General Motors Corporation Automotive 5,006 Liberty National Life Insurance Insurance 5,000 Lansing Community College Education 2,990 Meijer, Inc. Retail 2,900 Ingham Regional Medical Center Health care 2,400 Southern-Owners Insurance Insurance 1,500 Lansing School District Education 1,475 Auto Owners Insurance Insurance 1,400 Jackson National Life Insurance Insurance 1,393 Leona Group LLC Consulting services 1,200 U.S. Post Office Postal service 1,200 Wal-Mart Retailer 1,185 Dart Container Corp. Containers 1,144 Ingham, County of Government 1,123

Demmer Corp., Engineering Div. Metal fabrication 765 Lansing Board of Water & Light Utility 712 John Henry Company Plastic & paper printed floral 660 East Lansing, City of Government 634

Source: 2016 Michigan Manufacturers Directory, Lansing Chamber website; www.gm.com, Economic Development Council (“MEDC”), and individual employers. EMPLOYMENT BREAKDOWN

The U.S. Census Bureau, 2011-2015 American Community Survey reports the occupational breakdown of persons 16 years and over for the County of Ingham is as follows:

County of Ingham Number Percent PERSONS BY OCCUPATION 133,091 100.00% Management, Professional & Related 52,658 39.56 Service 25,844 19.42 Sales & Office 31,789 23.89 Natural Resources, Construction & Maintenance 7,040 5.29 Production, Transportation & Material Moving 15,760 11.84

A-15 The U.S. Census Bureau, 2011-2015 American Community Survey reports the breakdown by industry for persons 16 years and over in the County of Ingham is as follows:

County of Ingham Number Percent PERSONS BY INDUSTRY 132,851 100.00% Agriculture, Forestry, Fishing, Hunting & Mining 946 0.73 Construction 4,020 3.03 Manufacturing 12,927 9.73 Wholesale Trade 2,150 1.62 Retail Trade 14,106 10.62 Transportation 4,784 3.60 Information 2,437 1.83 Finance, Insurance & Real Estate 9,556 7.19 Professional & Management Services 12,326 9.28 Educational, Health & Social Services 39,014 29.35 Arts, Entertainment, Recreation & Food Services 14,982 11.28 Other Professional & Related Services 6,556 4.93 Public Administration 9,047 6.81

UNEMPLOYMENT RATES

The U.S. Department of Labor, Bureau of Labor Statistics, reports unemployment averages for the County of Ingham as compared to the State of Michigan are as follows:

Annual County of State of Average Ingham Michigan February, 2017 4.4% 5.7% 2016 5.1 4.9 2015 4.4 5.4 2014 5.9 7.3 2013 7.5 8.8

POPULATION BY AGE

The 2015 U.S. Census estimate of population by age for the County of Ingham is as follows:

County of Ingham Number Percent Total Population 283,491 100.00% 0 through 19 years 74,805 26.39 20 through 64 years 176,108 62.12 65 years and over 32,578 11.49

Median Age 31.5 years

A-16 INCOME

The U.S. Census Bureau, 2011-2015 American Community Survey estimate of household income for the County of Ingham is as follows:

County of Ingham Number Percent HOUSEHOLDS BY INCOME 109,418 100.00% Less than $ 10,000 11,755 10.74 $ 10,000 to $ 14,999 6,648 6.08 $ 15,000 to $ 24,999 13,007 11.89 $ 25,000 to $ 34,999 11,971 10.94 $ 35,000 to $ 49,999 16,020 14.64 $ 50,000 to $ 74,999 19,494 17.82 $ 75,000 to $ 99,999 11,598 10.60 $100,000 to $149,999 12,321 11.26 $150,000 to $199,999 2,980 2.72 $200,000 or MORE 3,624 3.31

Median Income $45,679

A-17 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX B COUNTY OF INGHAM GENERAL FUND BUDGETS

General Fund Budget Summaries For the Fiscal Years Ending December 31, 2016

2016 2016 Adopted Amended REVENUE Budget Budget

Taxes $45,046,645 $45,132,645 Intergovernmental Transfers 8,973,968 8,973,968 Department Generated Revenue 24,750,052 23,592,500 REVENUE SUMMARY TOTAL $78,770,665 $77,699,113

FUND BALANCE USE (SURPLUS) $2,644,927 $5,128,068

TOTAL GENERAL FUND REVENUE $81,415,592 $82,827,181

EXPENDITURES

County Services $12,264,192 $12,240,169 Human Services 17,661,134 16,549,847 Law and Courts 49,489,664 49,616,716 Debt, Capital, Contingency 2,000,602 2,420,449

TOTAL GENERAL FUND EXPENDITURES $81,415,592 $82,827,181

B-1 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX C COUNTY OF INGHAM AUDITED FINANCIAL STATEMENTS

The auditor has not examined or reviewed any financial documents, statements or materials that have been or may be furnished in connection with the authorization, issuance or marketing of the Bonds and accordingly has not conducted any post-audit review procedures and will not express any opinion with respect to the accuracy or completeness of such financial documents, statements or materials.

[THIS PAGE INTENTIONALLY LEFT BLANK] Plante & Moran, PLLC 1098 Woodward Avenue Qlante Detroit, Ml 48226-1906 To the Board of Commissioners Tel: 313.496.7200 Ingham County, Michigan Fax: 313.496.7201 Thoran planternoran.com Opinion Independent Auditor's Report In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business type activities, aggregate discretely To the Board of Commissioners presented component units, each major fund, and the aggregate remaining fund information of Ingham Ingham County, Michigan County, Michigan as of December 31, 2015, and the respective changes in its financial position, and, where applicable, cash flows thereof and the respective budgetary comparisons for the General Fund Report on the Financial Statements and major special revenue funds for the year then ended, in accordance with accounting principles generally accepted in the United States of America. We have audited the accompanying financial statements of the governmental activities, business type activities, aggregate discretely presented component units, each major fund, and the aggregate remaining Emphasis of Matter fund information of Ingham County, Michigan (the "County") as of and for the year ended December 31, 2015 and the related notes to the financial statements, which collectively comprise the County's basic As discussed in Note 19 to the basic financial statements, in 2015, the County adopted the new financial statements, as listed in the table of contents. accounting guidance of GASB No. 68, Accounting and Financial Reporting for Pensions, and GASB No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an Amendment of GASB Management's Responsibility for the Financial Statements No. 68, which established accounting and financial reporting standards for defined benefit pensions plans provided to the employees of governmental employers through pension plans. Adopting GASB Management is responsible for the preparation and fair presentation of these financial statements in Statement Nos. 68 and 71 resulted in a net pension liability and significant changes to the defined benefit accordance with accounting principles generally accepted in the United States of America; this includes pension plan related note disclosures. Our opinion is not modified with respect to this matter. 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 As discussed in Note 19 to the basic financial statements, the January I, 2015 net position of the Ingham error. County Land Bank Fast Track Authority has been restated from the amounts reported in the 2014 financial statements to correct misstatements. Our opinion is not modified with respect to this matter. Auditor's Responsibility

C-1 Other Matters Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and Required Supplemental Information the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit Accounting principles generally accepted in the United States of America require that the management's to obtain reasonable assurance about whether the financial statements are free from material discussion and analysis and the other required supplemental information, as identified in the table of misstatement. contents, 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, An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in which considers it to be an essential part of financial reporting for placing the basic financial statements in the financial statements. The procedures selected depend on the auditor's judgment, including the an appropriate operational, economic, or historical context. We have applied certain limited procedures assessment of the risks of material misstatement of the financial statements, whether due to fraud or to the required supplemental information in accordance with auditing standards generally accepted in the error. In making those risk assessments, the auditor considers internal control relevant to the entity's United States of America, which consisted of inquiries of management about the methods of preparing preparation and fair presentation of the financial statements in order to design audit procedures that are the information and comparing the information for consistency with management's responses to our appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating financial statements. We do not express an opinion or provide any assurance on the information because the appropriateness of accounting policies used and the reasonableness of significant accounting the limited procedures do not provide us with sufficient evidence to express an opinion or provide any estimates made by management, as well as evaluating the overall presentation of the financial statements. assurance.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for Other Information our audit opinions. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Ingham County, Michigan's basic financial statements. The combining and individual fund financial statements and schedules, as identified in the table of contents, and introductory section and statistical section, as identified in the table of contents, are presented for the purpose of additional analysis and are not a requir-ed part of the basic financial statements.

" .. ~ Praxity·: MEMBER~•

10 11 To the Board of Commissioners Ingham County, Michigan

The combining and individual fund financial statements and schedules, as identified in the table of contents, are the responsibility of management and were derived from, and relate directly to, the underlying accounting and other records used to prepare the basic 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. In our opinion, the combining and individual fund financial statements and schedules, as identified in the table of contents, are fairly stated in all material respects in relation to the basic financial statements as a whole.

The introductory section and statistical section, as identified in the table of contents, 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.

Report on Summarized Comparative Information

We have previously audited the County's December 31, 2014 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated June 19, 2015. In our opinion, the summarized comparative information presented herein as of and for the year ended December 3 I, 2014 is consistent, in all material respects, with the audited financial statements from which it has been derived.

Other Reporting Required by Government Auditing Standards C-2 In accordance with Government Auditing Standards, we have issued a report on our consideration of Ingham County, Michigan's internal control over financial reporting and on our tests of its compliance MANAGEMENT'S DISCUSSION AND ANALYSIS with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Ingham County, Michigan's internal control over financial reporting and compliance.

June 9, 2016

12 13 Ingham County, Michigan Ingham County, Michigan

Management's Discussion and Analysis The statement of activities presents information showing how the County's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event As management of Ingham County, we offer readers of Ingham County's financial statements this giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and narrative overview and analysis of the financial activities of Ingham County for the fiscal year ended expenses are reported in this statement for some items that will only result in cash flows in future fiscal December 31, 2015. We encourage readers to consider the information presented here in conjunction periods (e.g. uncollected taxes and earned but unused vacation leave). with additional information that we have furnished in our letter of transmittal. Both of the government-wide financial statements distinguish functions of Ingham County that are Financial Highlights 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 Ingham County include general • The assets of Ingham County exceeded its liabilities at the close of the most recent fiscal year by government, public safety, judicial, public works, health, welfare, education, economic development, nearly $123.5 million (net position). Of this amount, a deficit of $63.3 million was reported as and culture and recreation. The business-type activities of Ingham County include a medical care facility the unrestricted net position. Governmental activities reported a deficit of $98.9 which was that provides long-term skilled nursing care, delinquent tax collections and property foreclosures, offset by the net position of the business type activities of $34.9 resulting in the total deficit of clinical fee-based health service to Medicaid eligible individuals and the operations of the county fair, $63.3 million. inmate concession and parks enterprise.

• The County governmental activities showed an increase of $7.4 million in total net position. The The government-wide financial statements include not only Ingham County itself, but also legally business type activities reported a $1.9 million increase in total net position. separate entities for which the County is financially accountable including the Housing Commission, Drain Commission, Brownfield Redevelopment Authority, and Land Bank. With the exception of the • At the dose of 2015, Ingham County's governmental funds (this includes the general fund, Brownfield Redevelopment Authority, financial information for these component units is reported special revenue, debt service and capital projects funds) reported a combined ending fund separately from the financial information presented for the primary government itself. The Ingham balance of $60.2 million. Of this total amount, approximately $19.8 million is available for County Building Authority, Medical Care Facility, and Fair Board, although also legally separate, function spending at the County's discretion (unassigned and assigned fund balance). In addition, $10.6 for all practical purposes as departments of Ingham County, and therefore have been included as million in committed fund balance is available for future budget stabilization. integral parts of the primary government. C-3

• At the end of the fiscal year, unassigned fund balance for the general fund was $16.2 million or Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control 20.5 percent of total general fund expenditures and transfers out. Total fund balance for the over resources that have been segregated for specific activities or objectives. Like other state and local general fund was $37.9 million. governments, Ingham County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of Ingham County can be divided into three categories: governmental, proprietary and fiduciary funds. Overview of the Financial Statements Governmental Funds. Governmental funds are used to account for essentially the same functions This discussion and analysis is intended to serve as an introduction to the Ingham County basic financial reported as governmental activities in the government-wide financial statements. However, unlike those statements. The Ingham County basic financial statements contain three components: 1) government statements, governmental fund financial statements focus on near-term inflows and outflows of wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This spendable resources, as well as on balances of spendable resources available at the end of the fiscal report also contains other supplementary information in addition to the basic financial statements year. Such information may be useful in evaluating a government's near-term financing requirements. themselves. Because the focus of governmental funds is narrower than that of the government-wide financial Government-Wide Financial Statements: The government-wide financial statements are designed to statements, it is useful to compare the information presented for governmental funds with similar provide readers with a broad overview of Ingham County's finances, in a manner similar to a private information presented for governmental activities in the governmental-wide financial statements. By sector business. 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 The statement of net position presents information on all of Ingham County's assets and liabilities. The revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this difference between assets and liabilities is reported as net position. Over time, increases or decreases in comparison between governmental funds and governmental activities. net position may serve as a useful indicator of whether the financial position of Ingham County is improving or deteriorating. Ingham County maintains 38 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, roads, health, emergency telephone, county

14 15 Ingham County, Michigan Ingham County, Michigan

transportation system, juvenile justice and health service millage funds which are considered to be The schedule shows the County's assets exceeded liabilities by $123.5 million at the close of the most major funds. Data from the other 31 governmental funds are combined into a single, aggregated recent fiscal year. presentation. Individual fund data for each of these non major governmental funds is provided in the form of combining statements elsewhere in this report. Net Position Proprietary Funds. The County maintains two different types of proprietary funds. Enterprise funds are Governmental Activities Business-type Activities Total used to report the same functions presented as business-type activities in the government-wide financial statements. Ingham County uses seven enterprise funds to account for its business-type 2015 2014 Restated 2015 2014 Restated 2015 2014 Restated activities. Internal service funds are an accounting device used to accumulate and allocate costs internally among Ingham County's various functions. Ingham County uses internal service funds to Current and other assets $ 113, 700, 744 $ 112,378,698 $ 53,016, 735 $ 56,492, 396 $ 166, 717,479 $ 168,871,094 account for its equipment, employee fringe benefits, liability and workers' compensation insurances, Capital assets, net 167,288,060 160,905,563 14,894,491 14,041,589 182, 182, 551 174,947,152 print shop and courier operations and its management information systems. Because these services Total assets 280,988,804 273,284,261 67,911,226 70,533,985 348,900,030 343,818,246 predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Deferred Outflows of resources 14,042,091 23,902,439 2,929,670 16,971, 761 23,902,439 Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the medical care facility, delinquent tax revolving and community health center network funds, which are Long-term liabilities 183,315,037 164,856,676 11,284,207 16,518,286 194,599,244 181,374,962 considered to be major funds of Ingham County. Data from the other four enterprise funds are Other liabilities 15, 761,815 19,429,500 8,550,303 4,871,976 24,312,118 24,301,476 combined into a single aggregated presentation. Detailed financial information for each of the nonmajor Total liabilities 199,076,852 184, 286, 176 19,834,510 21,390,262 218, 911,362 205,676,438 enterprise funds is provided in the form of combining statements elsewhere in this report. All internal service funds are combined into a single, aggregated presentation in the proprietary fund financial Deferred inflows of statements. Individual fund data for the internal service funds is provided in the form of combining resources 23,439,058 23,902,439 23,439,058 23,902,439 statements elsewhere in this report.

C-4 Net position: Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside Net investment in capital assets 154,695, 788 146, 123,536 14,894,491 14,041,589 the government. Fiduciary funds are not reflected in the government-wide financial statement because 169, 590, 279 160, 165, 125 Restricted 16, 754,901 13,563,250 507,513 488,536 17,262,414 14,051,786 the resources of those funds are not available to support Ingham County's own programs. The Un re stri cte d Re stated (98,935,704) (94,591,140) 35,604,382 34,613,598 ( 63,331,322) (59,977,542) accounting used for fiduciary funds is much like that used for proprietary funds. The County is Total net position 72,514,985 $ 65,095,646 $ 51,006,386 $ 49, 143, 723 123,521,371 responsible for ensuring that the assets reported in these funds are used for their intended purposes. $ $ $ 114,239,369

Notes to the Financial Statements. The notes provide additional information that is essential to a full The County has a $169.6 million net investment in capital assets. The investment in capital assets (e.g., understanding of the data provided in the government-wide and fund financial statements. land, buildings, machinery and equipment) is shown net of any related outstanding debt used to acquire those assets. Ingham County uses these capital assets to provide service to citizens; consequently, these County-Wide Financial Analysis. As noted earlier, net position may serve over time as a useful indicator assets are not available for future spending. of a government's financial position. The following schedule is a summary presentation of Ingham County's assets, liabilities, and net position at December 31, 2015. As noted above, the 2014 beginning Although the County's investment in its capital assets is reported net of related debt, it should be noted net position balances have been restated to reflect the impact of GASB 68, accounting and financial that the resources needed to repay this debt must be provided from other sources, since the capital reporting for pension. More detail regarding the restatement of 2014 can be found in note 19 of the assets themselves cannot be used to liquidate these liabilities. The net investment in capital assets notes to the financial statements. increased by $9.4 million due primarily to the total additions to road infrastructure exceeding the depreciation of existing road assets and the renovation to the Forest Community Health Center facility.

An additional portion of Ingham County's net position represents $17.3 million of resources that are subject to external restrictions on how they may be used. Ingham County's unrestricted net position is a deficit amounting to $64.3 million as of December 31, 2015.

16 17 Ingham County, Michigan Ingham County, Michigan

At the end of the 2015 fiscal year, Ingham County is able to report positive balances in all three net anticipated. The business-type activities increased by $1.9 million. The Medical Care Facility accounted position categories (net investment in capital assets, restricted, and unrestricted) for the business-type for the majority of this increase. activities. While the net investment in capital assets and restricted fund balance are positive, the county was not able to report a positive unrestricted net position for the Governmental Funds due to the Governmental Activities. An analysis of the governmental activities revenues and expenses shows a reporting of the net pension liability. $13 million increase in revenues while the expenditures increased by $6.2 million. The increase in revenue is due to increases in property taxes resulting from new tax levies which began in 2015 along Change in Net Position with an overall increase in taxable value and increased Federal and state grants for road construction Governmental Activities Business-type Activities Total and maintenance. 2015 2014 2015 2014 2015 2014 Business-type Activities. Business-type activities increased Ingham County's net position by $1.9 million Program revenues: compared to $3.1 million in 2014. The reduction was primarily due to the $1.2 million reduction in net Charges for services $ 15,896,586 $ 17,922,548 $ 41,209,148 $ 40,381,203 $ 57,105,734 $ 58,303, 751 position experienced by the delinquent tax fund. Operating grants and contributions 65,304,862 57,489,788 8,296,806 8,826,066 73,601,668 66,315,854 Financial Analysis of the Government's Funds Capital grants and contributions 5,912,599 5,685,805 5,912,599 5,685,805 General revenues: As noted earlier Ingham County uses fund accounting to ensure and demonstrate compliance with Property taxes 70,984,534 63,548,868 70,984,534 63,548,868 finance-related legal requirements. Other 3,230,680 3,657, 775 98,844 576,620 3,329,524 4,234,395 Total revenues 161, 329, 261 148, 304, 784 49,604,798 49,783,889 210,934,059 198,088,673 Governmental Funds. The focus of Ingham County's governmental funds is to provide information on

Expenses: near-term inflows and balances of spendable resources. Such information is useful in assessing Ingham General government 22,855,851 21,806,096 22,855,851 21,806,096 County's financing requirements. In particular, unassigned fund balance may serve as a useful measure Public safety 31,548, 797 30,003,061 31,548,797 30,003,061 of a government's net resources available for spending at the end of the fiscal year. Judicial 16,144,383 15,421,164 16,144,383 15,421,164 Public works 23,911,207 24,012,336 23,911,207 24,012,336 As of the end of the fiscal year, Ingham County's governmental funds reported combined ending fund Health 30,580,083 28, 791,858 30,580,083 28, 791,858 C-5 Welfare 17,350,257 17,612,580 17,350,257 17,612,580 balances of $60.2 million, an increase of $2.3 million in comparison with the prior year. Of this total Education 23,091 33,424 23,091 33,424 amount, $14.8 million constitutes unassigned fund balance, which is available for spending at the Economic development 1,110,422 416,413 1,110,422 416,413 government's discretion. The remainder of fund balance is nonspendable, restricted, committed or Culture and recreation 10,036,654 9,191,266 10,036,654 9, 191,266 assigned and therefore is not available for new spending because it has already been committed for Interest on long-term debt 556,822 650,932 556,822 650,932 advances to other funds or component units ($1.2 million), transportation ($6.8 million), budget Medical care facility 24,439,156 24,082,287 24,439,156 24,082,287 Delinquent tax collection 1,821,388 1,661,533 1,821,388 1,661,533 stabilization ($10.6 million) and other restricted purposes. Community health center network 18,425,967 19,328,244 18,425,967 19,328,244 The general fund is the chief operating fund of Ingham County. At the end of the fiscal year, the Housing 638,107 477,318 638, 107 477,318 unassigned fund balance of the general fund was $16.2 million. The unassigned fund balance at Inmate stores 290,645 313,138 290,645 313,138 December 31, 2014 totaled $12.1 million. This increase is due to the repayment of the amount Restricted Tax Sales 766,238 2,214,810 766,238 2,214,810 County fair 1,155,343 995,660 1,155,343 995,660 advanced to the Drain component unit of $6 million which was previously reported as a nonspendable Total expenses 154,117,567 147, 939, 130 47,536,844 49,072,990 201,654,411 197, 012, 120 fund balance. In addition, $10.6 million in committed fund balance is available for future budget stabilization. The total fund balance is $37.9 million which is a $2.2 million budgeted deduction from Change in net position, 2014 which was a planned reduction. before transfers 7,211,694 365,654 2,067,954 710,899 9,279,648 1,076,553 Transfers 207,645 (2,381,588) (205,291) 2,380,327 2,354 (1,261) Change in net position 7,419,339 (2,015,934) 1,862,663 3,091,226 9,282,002 1,075,292 The road fund increased its fund balance by $2.1 million due to increased State of Michigan funding. It Net position: was the first year of operations for the Trails and Park non-major special revenue fund and limited Beginning of year (restated) 65,095,646 67, 111,580 49,143,723 46,052,497 114,239,369 113, 164,077 expenditures were incurred. This increased its fund balance by $3.3 million. End of year $ 72,514,985 $ 65,095,646 $ 51,006,386 $ 49,143, 723 $ 123,521,371 $ 114, 239,369 The General Fund revenue increase between years was $2.2 million. This was due almost exclusively to an increase in property taxes based on improved property values. Expenditures increased by $2.4 million. Expenditures overall had slight increases, with notable increases in pension expense along with The County's total net position increased by $9.3 million during the year. The governmental activities increases in the contribution to the Retiree Health Insurance trust, and an overall wage increase. increased by $7.4 million primarily due to several special revenue funds not spending as much as

18 19 Ingham County, Michigan Ingham County, Michigan

The Capital Projects Fund is used to account for a Community Development Block Grant to pay for a portion of the utilities for the expansion of Jackson National Life's facility as noted in the transmittal Additional information on Ingham County's capital assets can be found in note 5 of the notes to the letter. This reimbursement was not available to be recognized as revenue in 2015 resulting in a $1.3 financial statements. million fund deficit as of December 31, 2015. Capital Assets (Net of Depreciation)

Proprietary Funds. Ingham County's proprietary funds provide the same type of information found in Governmental Activities Business-type Activities Total the government-wide financial statements, but in more detail. 2015 2014 2015 2014 2015 2014

The delinquent tax revolving fund ended 2015 with an unrestricted net position of $8.4 million. This is Land $ 8,958,025 $ 8,958,025 $ 137,912 $ 137,912 $ 9,095,937 $ 9,095,937 down from $9.6 million in 2014. This is the result of taxpayers paying more timely as the economy has Land improvements 27,504,710 25,682,314 27,504,710 25,682,314 improved. Construction in progress 951,946 593,612 1,177,026 2,128,972 593,612 lntangi ble assets 3,139,248 2,490,364 3,139,248 2,490,364 The Medical Care Facility's unrestricted net position was $21.8 million after an increase in overall net Buildings 33,351,649 35,859,472 13,022,885 13,562,115 46,374,534 49,421,587 position for the year of $1.1 million. This increase was planned and will be used with much of the Machinery and equipment 6, 720,255 7,216,444 556,668 341,562 7,276,923 7,558,006 Infrastructure 86,662,227 80,105,332 86,662,227 80,105,332 existing net position to fund a large portion of the renovations planned for 2016 and beyond. It should be noted that the Medical Care Facility fully funded its portion of the County's pension plan in 2012 and Total capital assets, net $ 167,288,060 $ 160,905,563 $ 14,894,491 $ 14,041,589 $ 182,182,551 $ 174,947,152 added an additional $2.2 million in December 2015. The net pension asset as of December 31, 2015 is $2.3 million. Long-Term Debt. At the end of the 2015 fiscal year, Ingham County had total general obligation debt of The Community Health Center Network Enterprise Fund accounts for the fee-based activity of the $17.8 million. The entire amount is backed by the full faith and credit of the County. County Health Department's clinics. In 2016, $1.6 million of the existing fund balance will be used to renovate the Forest Health Clinic which will be used to centralize clinic operations. Outstanding Debt General Fund Budgetary Highlights.

C-6 Governmental Activities Business-type Activities Total Revenues were in line with budget with the exception of intergovernmental revenue. The amount of 2015 2014 2015 2014 2015 2014 liquor fee revenue the State of Michigan shares with counties was reduced in the last quarter of 2015. Expenditures were under budget by $2.3 million. This was caused by a variety of reasons including labor General obligation bonds $11,785,000 $13,895,000 $ - $ - $11,785,000 $13,895,000 attrition and contracted projects not being completed during the year as planned. Delinquent tax notes 5,998,222 10,000,000 5,998,222 10,000,000

Total $11, 785,000 $13,895,000 $ 5,998,222 $10,000,000 $17, 783,222 $23,895,000 Capital Asset and Debt Administration.

Capital Assets. Ingham County's investment in capital assets for its governmental and business-type activities as of December 31, 2015, amounts to $182.2 million (net of accumulated depreciation). This The County retired $2.1 million in debt during 2015. Tax notes of $13.0 million were issued in 2015 and investment in capital assets includes land, land improvements, construction in progress, intangible $17 million were retired resulting in a decrease of $4 million. assets, buildings, machinery and equipment and infrastructure. The $6.4 million increase was due to the additions to road infrastructure exceeding the depreciation on the same asset class. Ingham County maintains an AA+ rating from Standard and Poor's for its general obligation debt and an Aa3 rating from Moody's Investors Services. The business type experienced an increase of $900,000 due primarily to renovations of the Forest Health Clinic which was completed in January 2016. State statute limits the amount of general obligation debt a governmental entity can levy. It cannot exceed 10 percent of the entity's total assessed valuation (i.e., state equalized value). The current debt limitation for Ingham County is $796.3 million, which is significantly in excess of Ingham County's outstanding general obligation debt.

Additional information on the County's long-term debt can be found in note 8 of the notes to the financial statements.

20 21 Ingham County, Michigan

INGHAM COUNTY, MICHIGAN Statement of Net Position Economic Factors and Next Year's Budget and Rates December 31, 2015 Primary Government In order to maintain financial stability over the long term, the budgeting practice at Ingham County is to Business-type Component not only adopt a balanced budget as required by law, but to manage its budget in a manner such that Governmental Activities Activities Total Units actual expenses/expenditures do not erode the accumulated fund balance. This policy, along with a Assets fully funded budget stabilization reserve, has given Ingham County the resources necessary to address Pooled cash and investments 66,598,329 18,835,436 85,433, 765 17,171,375 difficult economic times without resorting to a crisis-management approach. It has permitted the Pooled cash and investments - restricted 14,346,099 14,346,099 Receivables, net 41,685,617 County Board to utilize its annual budget process as the primary vehicle to make decisions on the type 20,060,106 61,745,723 56,173,820 Internal balances 2,710,000 (2, 710,000) and level of county services to be provided. When unexpected revenue losses or expenditure increases Other assets 2,706,798 144,034 2,850,832 3,736,458 occur during the year, they are generally addressed through short-term expenditure reduction measures Net pension asset 2,341,060 2,341,060 such as reductions in controllable expenses, hiring delays, or deferrals of capital expenditures. In 2016, it Capital assets not being depreciated 40,553,929 771,439 41,325,368 16,056,287 Capital assets being depreciated, net 126,734,131 14,123,052 140,857,183 46,158,775 is anticipated that a reasonable use of fund balance will be required to properly match current resources with current expenditures. Total assets 280,988,804 67,911,226 348,900,030 139,296, 715

Deferred Outflows of Resources: Taxable values for 2015 increased 3.4% over the prior year. In addition, the County is dependent upon Unamortized bond loss 242,629 242,629 the State of Michigan's determination of revenue sharing revenue which in recent years has been Pension 13,799,462 2,929,670 16,729,132 142,594 uncertain but did increase in both 2014 and 2015. Total deferred outflows of resources 14,042,091 2,929,670 16,971,761 142,594 liabilities Steps have been taken to address the unfunded liability for retiree health insurance costs. Ingham Accounts payable and accrued liabilities $ 11,954,456 8,476,555 $ 20,431,011 6,765,069 County has begun to address this issue by continuing to commit $3.2 million of fund balance in the Accrued interest payable 152,830 13,604 166,434 103,555 general fund for this purpose and setting aside 0.5% of payroll in 2006, 1% in 2007 through 2012, 1.75% Deposits payable 493,885 493,885 74,419 Unearned revenue 3,160,644 60,144 3,220, 788 for 2013, 2.65% in 2014 and 3.65% in 2015. The total amount accumulated as of December 31, 2015 is 56,077 Long-term liabilities: $10.2 million. During 2016, the County increased the contribution to 4.5% of payroll and plans on Due within one year 6,274,394 6,406,522 12,680,916 17,183,985 C-7 keeping it at this level for the next few years. Due in more than one year 12,096,078 697,151 12,793,229 51,946,764 Other noncurrent liability: Net other postemployment benefit liability 39,235,696 3,395,898 42,631,594 Requests for Information Net Pension Liability 125,708,869 784,636 1,174,005

The financial report is designed to provide a general overview of Ingham County's finances for all those Total liabilities 199,076,852 19,834,510 92,417,857 77,303,874

with an interest. Questions concerning any information provided in this report or requests for Deferred Inflows of Resources 23,439,058 additional financial information should be addressed to the Office of the Controller, Ingham County Courthouse, Mason, Michigan 48854. Net Position Net investment in capital assets 154,695,788 14,894,491 169,590,279 7,443,110 Restricted for: General government 142,934 142,934 Public health services 1,008,574 1,008,574 Public safety 3,511,279 491,380 4,002,659 Transportation 1,177,110 1,177,110 Culture and recreation 3,752,266 3,752,266 Welfare 3,079,026 3,079,026 Education 33,386 33,386 Economic development 4,038,252 4,038,252 Debt service 12,074 12,074 52,850,360 Capital Projects 13,417,843 Scholarships 16,133 16,133 Unrestricted (98,935,704) 35,604,382 (63,331,322) (11,575,878)

Total net position $ 72!514,985 51,006,386 ~--E-2~~1,~~ 62,135,435

The accompanying notes are an integral part of these financial statements

22 23 INGHAM COUNTY, MICHIGAN Statement Of Activities INGHAM COUNTY, MICHIGAN For the Year Ended December 31, 2015 Statement Of Activities Primary Government For the Year Ended December 31, 2015 Governmental Business-type Program Revenues Activities Activities Total Component Units Operating Capital Grants Net

Charges for Grants and and (Expense) Changes in net position Functions/Programs Expenses Services Contributions Contributions Revenue Net(expense)revenue $ (67,003,520) $ 1,969,110 $ (65,034,410) $ 11,925,297

Primary government: General revenues: Governmental activities: Property taxes 70,984,534 70,984,534 288,334 2,711,294 2,711,294 General government $ 22,855,851 $ 2,815,980 $ 12,890,279 $ $ (7,149,592) Taxes restricted for tourism programs Unrestricted investment earnings (loss) 519,386 174,454 693,840 236,537 Public safety 31,548, 797 5,914,714 4,647,713 (20,986,370) Other 44,553 Judicial 16,144,383 2,404,602 4,089,682 (9,650,099) Interest and fiscal charges (75,610) (75,610) Public works 23,911,207 4,263 21,930,428 5,912,599 3,936,083 Transfers - internal activities 207,645 (205,291) 2,354 Health 30,580,083 3,294,289 12,990,430 (14,295,354) Welfare 17,350,257 444,117 8,088,555 (8,817,585) Total general revenues and transfers 74,422,859 (106,447) 74,316,412 569,424 Education 23,091 37,823 14,732 Economic development 1,110,422 1,500 1,797 (1,107,125) Change in net position 7,419,339 1,862,663 9,282,002 12,494,721 Culture and recreation 10,036,654 1,017,121 11,432 (9,008,101) Interest on long-term debt 556,822 616,723 59,901 Net position - beginning of year (restated) 65,095,646 49,143,723 114,239,369 49,640,714

Total governmental activities 154,117,567 15,896,586 65,304,862 5,912,599 (67,003,520) Net position - end of year $ 72,514,985 $ 51,006,386 $ 123,521,371 $ 62,135,435

Business-type activities: Medical care facility 24,439,156 23,659,927 2,407,803 1,628,574 Delinquent tax collection 1,821,388 3,507,322 1,685,934 C-8 Community health center network 18,425,967 11,544,129 5,148,175 (1,733,553) Inmate stores 638,107 177,477 645,740 185,110 Restricted tax sales 765,238 1,197,617 431,379 The accompanying notes are an integral part of these financial statements Parks 290,645 303,477 9,723 22,555 Fair board 1,155,343 819,199 85,365 (250, 779)

Total business-type activities 47,536,844 41,209,148 8,296,806 1,969,110

Total primary government $ 201,654,411 $ 57,105,734 $ 73,601,658 $ 5,912,599 $ (65,034,410)

Component units: Housing Commission $ 1,142,227 $ 258,977 $ 539,809 $ $ (243,441) Land Bank 6,525,381 1,198,641 4,251,806 109,562 (965,272) Drain Commission 9,956,559 1,464,901 21,772,024 13,270,355 Brownfield Redevelopment 181,356 45,000 (136,355)

Total component units $ 17,815,523 $ 2,922,519 $ 4,936,615 $ 21,881,686 $ 11,925,297

continued

The accompanying notes are an integral part of these financial statements

24 25 INGHAM COUNTY, MICHIGAN INGHAM COUNTY, MICHIGAN Governmental Funds Governmental Funds Balance Sheets Balance Sheets December 31, 2015 December 31, 2015

Other Nonmajor Total County Juvenile Justice Health Services Governmental Governmental General Emergency Transportation Millage Millage Funds Funds Fund Road Health Telephone System Assets Assets Pooled cash and investments $ 2,364,931 $ 1,536,803 $ 8,853,695 $ 56,074,670 Pooled cash and investments $ 31,756,909 $ 5,306,109 $ 918,803 $ 3,012,984 $ 2,324,436 Property taxes receivable 3,917, 785 2,246,054 6,851,870 23,365,503 Property taxes receivable 928,315 5,503,617 3,917,862 Accounts receivable 479,605 2,349,333 Accounts receivable 140,154 212,241 1,210,881 306,452 Accrued interest receivable 7,346 2,896 15,252 143,341 Accrued interest receivable 86,859 14,623 7,802 8,563 Special assessments receivable 1,305,971 1,305,971 Special assessments receivable Due from other funds 4,382,530 Due from other funds 4,382,530 Due from component unit 5,863 Due from component unit 5,863 Due from other governmental units 4,411,204 10,391,333 Due from other governmental units 1,713,171 4,139,272 127,686 Prepaid items 194,545 260,744 Prepaid items 29,419 12,493 23,431 856 Inventories 1,539,809 1,144,235 Inventories 395,574 Rehabilitation loans receivable 2,187,971 2,187,971 Rehabilitation loans receivable Advances to other funds 168,779 Advances to other funds 168,779 Advances to component unit 1,000,000 Advances to component unit 1,000,000 Total assets $ 6,290,062 $ 3,785,753 $ 24,300,113 $ 103,175,847 $ 40,211,999 $ 10,828,973 $ 2,548,689 $ 8,959,397 $ 6,250,861 Total assets ~~~~~~ Liabilities Liabilities Accounts payable and accrued liabilities $ 1,084 $ 733,405 $ 2,906,879 $ 6,986,453 Accounts payable and accrued liabilities $ 768,270 $ 921,206 $ 677,028 $ 24,261 $ 954,320 Salaries and related withholdings 314,172 1,631,295 Salaries and related withholdings 741,410 187,918 308,610 79,185 Property tax payable 32,000 28,000 42,000 514,000 Property tax payable 335,000 45,000 32,000 Due to other funds 1,615,828 1,615,828 C-9 Due to other funds Due to other governmental units 39,350 Due to other governmental units 19,612 19,738 Deposits payable 493,885 Deposits payable 493,885 Unearned revenue 31,207 3,160,644 Unearned revenue 170,654 2,404,306 554,477 Total liabilities 33,084 761,405 4,910,086 14,441,455 Total liabilities 2,034,946 4,027,053 1,540,115 148,446 986,320 Deferred Inflows of Resources Deferred Inflows of Resources Unavailable revenue - rehab activity 2,221,744 2,221,744 Unavailable revenue - rehab activity Tax levied before the period of use 4,087,358 2,385,472 7,136,902 23,439,058 Tax levied before the period of use 5,741,895 4,087,431 Unavailable revenue - special assessments and grants 2,638,938 2,638,938 245,584 Unavailable revenue - special assessments and grants Unavailable revenue - property taxes Total deferred inflows of resources 4,087,358 2,385,472 11,997,584 28,545,324 Unavailable revenue - other 245,584 Total deferred inflows of resources 245,584 5,741,895 4,087,431 Fund Balances

Fund Balances Nonspendable 194,545 2, 790,074 Restricted 2,169,620 638,876 8,497,976 21,965,801 Nonspendable 1,198,198 1,156,728 239,747 856 Committed 36,344 15,603, 708 Restricted 5,645,192 768,827 3,068,200 1,177,110 Assigned 4,979,920 Committed 15,567,364 Unassigned (1,336,422) 14,849,565 Assigned 4,979,920 Total fund balances 2,169,620 638,876 7,392,443 60,189,068 Unassigned 16,185,987 Total fund balances 37,931,469 6,801,920 1,008,574 3,069,056 1,177,110 Total liabilities, deferred inflows of resources and fund balances $ 6,290,062 $ 3,785,753 $ 24,300,113 L~ 103,175,~-~ Total liabilities, deferred inflows of resources and fund balances $ 40,211,999 $ 10,828,973_ ~--~'°~~8,689 $ 8,959,397 _?__~ ~250,~51

The accompanying notes are an integral part of these financial statements

26 27 INGHAM COUNTY, MICHIGAN Governmental Funds INGHAM COUNTY, MICHIGAN Statement of Revenues, Expenditures and Changes in Fund Balances Reconciliation For the Year Ended December 31, 2015 Fund Balances for Governmental Funds To Net Position of Governmental Activities General Emergency County Transportation December 31, 2015 Fund Road Health Telephone System Revenues Taxes 45,914,853 $ 5,625,134 $ 4,008,292 Fund balances - total governmental funds $ 60,189,068 Licenses and permits 436,942 159,890 Intergovernmental 13,847,631 26,718,896 9,945,253 62,238 7,703 Amounts reported for governmental activities in the statement of net position are different Charges for services 11,124,885 4,263 3,192,363 because: Fines and forfeits 457,312 Investment earnings (loss) 240,114 37,835 19,814 25,518 Capital assets used in governmental activities are not financial resources Other 1,537,859 894,300 1,354,498 1,919,820 Total revenues 73,559,596 27,815,184 14,492,114 7,627,006 4,041,513 and therefore are not reported in the funds. Ca pita I assets 365, 764,294 Expenditures Accumulated depreciation (201,431,218) Current: General government 16,282,275 Other long-term assets are not available to pay for current-period Public safety 22,350,740 7,234,927 expenditures and therefore are not recorded in the funds. Judicial 15,557,756 Long-term receivables included in deferred inflows of resources 5,106,266 Public works 440,820 25,404,437 3,861,788 Health 5,274,670 20,130,233 Welfare 526,604 Certain liabilities, such as bonds payable, are not due and payable in the current Education period and therefore are not reported in the funds. Economic development 308,900 Bonds payable and other debt (11,836,529) Culture and recreation 2,337,437 Accrued interest on bonds payable (152,830) Capital outlay 552,156 320,617 152,175 Accrued compensated absences (5,589,600) Debt service Other postemployment benefit liability (39,235,696) Principal retirement 15,203 Interest and fiscal charges 1,908

C-10 Total expenditures 63,648,469 25,725,054 20,130,233 7,387,102 3,861,788 Certain pension contributions and changes in pension plan net

position are reported as deferred outflows of resources in the Excess of Revenue Over (Under) Expenditures 9,911,127 2;090,130 (5,638,119) 239,904 179,725 statement of net position, but are reported as expenses in the governmental funds 13,457,541 Other Financing Sources (Uses) Transfers in 3,359,168 5,358,267 Transfers out (15,394,518) (219,562) (113,530) Net pension liability is not due and payble in the current period and is not reported in the funds (122, 714,950) Total other financing sources (uses) (12,035,350) 5,358,267 (219,562) (113,530)

Premiums and discounts on bonds are reported as other financing sources or uses Net change in fund balances (2,124,223) 2,090,130 (279,852) 20,342 66,195 in governmental funds, whereas they are capitalized and amortized for net position. Fund balances - beginning of year 40,055,692 4,711,790 1,288,426 3,048,714 1,110,915 Unamortized bond premium (112,555) Unamortized loss 242,629 Fund balances - end of year 37,931,469 $ 6,801,920 $ 1,008,574 3,069,056 $ 1,177,110

Internal service funds are used by management to charge the cost of services to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. Net position of governmental activities accounted for in internal services funds 8,828,565

The accompanying notes are an integral part of these financial statements Net position of governmental activities $ 72,514,985

The accompanying notes are an integral part of these financial statements

28 29 Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances INGHAM COUNTY, MICHIGAN For the Year Ended December 31, 2015 Reconciliation

Total Net Changes in Fund Balances of Governmental Funds Juvenile Justice Health Services Other Nonmajor Governmental To Changes in Net Position of Governmental Activities Millage Millage Governmental Funds Funds For the Year Ended December 31, 2015 Revenues 3,436,724 Taxes 4,010,772 $ 9,936,270 72,932,045 Net Change in Fund Balances - Total Governmental Funds $ 2,285,000 Licenses and permits 596,832 Intergovernmental 12,932,301 63,514,022 Amounts reported for governmental activities in the statement of activities are different because: Charges for services 1,575,075 15,896,586 Fines and forfeits 457,312 Investment earnings (loss) 17,366 11,622 95,575 447,844 Governmental funds report capital outlays as expenditures. However, in the Other 7,200 935,618 6,649,295 statement of activities, the cost of those assets is allocated over their estimated Total revenues 4,035,338 3,448,346 25,474,839 160,493,936 useful lives and reported as depreciation expense. Capital outlay 18,452,825 Expenditures Depreciation expense (11,242,510} Current: Net book value of disposed capital assets (598,711) General government 5,527,711 21,809,986 Public safety 1,361,487 30,947,154 Revenues in the statement of activities that do not provide current financial Judicial 15,557,756 resources are not reported as revenues in the funds. Public works 1,290,417 30,997,462 Health 2,790,741 28,195,644 Change in deferred long-term receivable 518,198 Welfare 95,438 16,276,728 16,898,770 Recognition of property tax revenue 245,584 Education 23,190 23,190 Economic development 153,787 462,687 The issuance of long-term debt provides current financial resources to Culture and recreation 6,079,699 8,417,136 governmental funds, while the repayment of the principal of long-term Capital outlay 1,462,109 2,487,057 debt consumes current financial resources of governmental funds. Debt service Principal payments on long-term bonds and other debt 2,125,202 Principal retirement 2,110,000 2,125,203 Interest and fiscal charges 571,504 573,412 C-11 Total expenditures 95,438 2,790,741 34,856,632 158,495,457 Accrued interest expense on debt, discounts, premiums and deferred losses are not recorded by governmental funds, Excess of Revenue Over (Under) Expenditures 3,939,900 657,605 (9,381,793) 1,998,479 but are reported under interest and fiscal charges for purposes of net positions. Accrual for accrued interest payable 30,988 Other Financing Sources (Uses) Amortization of premium on bonds 37,518 Transfers in 11,831,910 20,549,345 Amortization of deferred loss on bond refunding (51,916} Transfers out (4,059,346) (30,000) (445,868) (20,262,824)

Total other financing sources (uses) (4,059,346) (30,000) 11,386,042 286,521 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in Net change in fund balances (119,446) 627,605 2,004,249 2,285,000 governmental funds. Accrual for compensated absences (370,220} Fund balances - beginning of year 2,289,066 11,271 5,388,194 57,904,068 Obligation for other postemployment benefits (2,622,984} Impact for GASB 68 on Pension Expense (3,773,479) Fund balances - end of year $ 2,169,620 $ 638,876 $ 7,392,443 60,189,068 Internal service funds are used by management to charge the costs of certain activities, such as insurance and other centralized costs, to individual funds. The net revenue (expense) of those funds is reported with governmental activities. Net operating income in internal service funds 2,391,178

The accompanying notes are an integral part of these financial statements Investment earnings in governmental internal services funds 71,542 Transfers received in governmental internal service funds 253,743 Transfers made from governmental internal service funds (332,619}

Change in Net Position of Governmental Activities $ 7,419,339

The accompanying notes are an integral part of these financial statements

30 31 INGHAM COUNTY, MICHIGAN General Fund INGHAM COUNTY, MICHIGAN Statement of Revenues, Expenditures and Changes in Fund Balance Road Fund Final Budget and Actual Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended December 31, 2015 Final Budget and Actual Favorable For the Year Ended December 31, 2015 Original Amended (Unfavorable) Favorable Budget Budget Budget over Original Amended (Unfavorable) (Unaudited) (Unaudited) Actual Actual 2014 Actual Budget Budget Budget over Revenues (Unaudited) (Unaudited) Actual Actual 2014 Actual Taxes $ 44,385,697 $ 44,835,697 $ 45,914,853 $ 1,079,156 $ 43,259,713 Licenses and permits 501,017 501,017 436,942 (64,075) 460,084 Revenues Licenses and permits $ 120,000 $ 120,000 $ 159,890 $ 39,890 $ 171,862 Intergovernmental 13,686,860 14,707,488 13,847,631 (859,857) 13,841,419 Charges for services 11,923,102 12,065,212 11,124,885 (940,327) 11,178,539 Intergovernmental 27,467,117 28,673,729 26,718,896 (1,954,833) 20,386,038 Fines and forfeits 466,950 466,950 457,312 (9,638) 420,339 Charges for services 4,263 4,263 18,445 Investment earning (loss) 350,000 350,000 240,114 (109,886) 664,453 Investment earning (loss) 20,000 20,000 37,835 17,835 45,195 Other 1,406,727 1,520,425 1,537,859 17,434 1,577,062 Other 662,300 662,300 894,300 232,000 1,800 Total revenues 72,720,353 74,446,789 73,559,596 (887,193) 71,401,609 Total revenues 28,269,417 29,476,029 27,815,184 (1,660,845) 20,623,340

Expenditures Expenditures Current: Public works: General government 15,567,942 16, 786,173 16,282,275 503,898 15,043,183 Personnel services 7,645,165 7,885,165 6,984,137 901,028 6,753,948 Public safety 21,810,758 22,457,049 22,350,740 106,309 21,586,733 Controllable 20,717,755 22,054,426 18,100,039 3,954,387 12,580,788 Judicial 15,114,231 15,999,658 15,557,756 441,902 15,040,130 Noncontrollable 376,500 376,500 320,261 56,239 398,820 Public works 430,300 441,300 440,820 480 386,182 Capital outlay 112,000 352,000 320,617 31,383 272,844 Health 5,179,036 5,849,653 5,274,670 574,983 5,102,569 Total expenditures 28,851,420 30,668,091 25,725,054 4,943,037 20,006,400 Welfare 519,083 530,160 526,604 3,556 482,064 C-12 Education Revenues over expenditures (582,003) (1,192,062) 2,090,130 3,282,192 616,940 Economic development 213,645 318,364 308,900 9,464 223,322 Culture and recreation 2,456,638 2,525,520 2,337,437 188,083 2,334,279 Other financing sources (uses) Capital outlay 321,481 1,010,678 552,156 458,522 798,593 Contingency 317,183 27,944 27,944 Proceeds from sales of capital assets 12,631 Debt service: Principal retirement 166,966 15,250 15,203 47 199,714 Total other financing sources (uses) 12,631 Interest and fiscal charges 24,112 1,950 1,908 42 8,704 Net change in fund balance (582,003) (1,192,062) 2,090,130 3,282,192 629,571 Total expenditures 62,121,375 65,963,699 63,648,469 2,315,230 61,205,473

Fund balances - beginning of year 4,711,790 4,711,790 4,711,790 4,082,219 Revenues over expenditures 10,598,978 8,483,090 9,911,127 1,428,037 10,196,136

Fund balances - end of year $ 4,129,787 $ 3,519,728 $ 6,801,920 $ 3,282,192 $ 4,711,790 Other financing sources (uses) Transfers in 3,508,164 3,723,764 3,359,168 (364,596) 3,339,378 Transfers out (16,874,892) (16,274,454) (15,394,518) 879,936 (15,960,331) Proceeds from sales of capital assets 2,500 2,500 (2,500) 19,687 The accompanying notes are an integral part of these financial statements Total other financing sources (uses) (13,364,228) (12,548,190) (12,035,350) 512,840 (12,601,266)

Net change in fund balance (2, 765,250) (4,065,100) (2,124,223) 1,940,877 (2,405,130) Fund Balances - beginning of year 40,055,692 40,055,692 40,055,692 42,460,822

Fund Balances - end of year $ 37,290,442 $ 35,990,592 $ 37,931,469 $ 1,940,877 $ 40,055,692

The accompanying notes are an integral part of these financial statements

32 33 INGHAM COUNTY, MICHIGAN INGHAM COUNTY, MICHIGAN Health Fund Emergency Telephone Fund Statement of Revenues, Expenditures and Changes in Fund Balance Statement of Revenues, Expenditures and Changes in Fund Balance Final Budget and Actual Final Budget and Actual For the Year Ended September 30, 2015 For the Year Ended December 31, 2015 Favorable Favorable (Unfavorable) Original Amended (Unfavorable) Original Amended Budget Budget Budget over Budget Budget Budget over (Unaudited) (Unaudited) Actual Actual 2014 Actual (Unaudited) (Unaudited) Actual Actual 2014 Actual Revenues Revenues Taxes 5,570,112 5,680,112 5,625,134 $ (54,978) $ 5,589,580 Intergovernmental $ 9,138,878 $10,014,028 $ 9,945,253 $ (68,775) $ 9,114,075 s s s Intergovernmental 60,000 62,238 2,238 65,753 Charges for services 3,410,285 3,495, 716 3,192,363 (303,353) 5,401,616 Other 1,249,698 1,188,322 1,354,498 166,176 486,935 Investment earning (loss) 25,000 25,000 19,814 (5,186} 101,571 Other 1,915,000 1,915,000 1,919,820 4,820 1,918,532 Total revenues 13,798,861 14,698,066 14,492,114 (205,952) 15,002,626 Total revenues 7,510,112 7,680,112 7,627,006 (53,106} 7,675,436

Expenditures Expenditures Health: Public safety 7,192,251 7,417,251 7,234,927 182,324 6,896,636 Personnel services 12,476,908 12,693,187 12,693,187 12,671,450 Capital outlay 19,000 242,934 152,175 90,759 524,745 Controllable 6,333,934 6,775,684 6,751,124 24,560 5,383,176 Total expenditures 7,211,251 7,660,185 7,387,102 273,083 7,421,381 Noncontrollable 657,944 952,012 685,922 266,090 572,404 Capital outlay 3,282 3,282 75,338 Revenues over expenditures 298,861 19,927 239,904 219,977 254,055 Total expenditures 19,468,786 20,424,165 20,130,233 293,932 18,702,368

Revenues over expenditures (5,669,925) (5,726,099) (5,638, 119} 87,980 (3,699,742) Other financing sources (uses) Transfers out (219,798) (219,798) (219,562) 236 (216,019) C-13

Other financing sources (uses) Total other financing sources (uses) (219,798) (219,798) (219,562) 236 (216,019) Transfers in 5,354,143 5,401,099 5,358,267 (42,832) 3,788,637 Transfers out (9,218) (5,411) Net change in fund balance 79,063 (199,871) 20,342 220,213 38,036 Fund balances - beginning of year 3,048,714 3,048,714 3,048,714 3,010,678 Total other financing sources (uses) 5,344,925 5,401,099 5,358,267 (42,832) 3,783,226

Fund balances - end of year s 3,127,777 s 2,848,843 s 3,069,056 s 220,213 $ 3,048,714 Net change in fund balance (325,000) (325,000) (279,852) 45,148 83,484

Fund balances - beginning of year 1,288,426 1,288,426 1,288,426 1,204,942 The accompanying notes are an integral part of these financial statem,ents

Fund balances - end of year $ 963,426 $ 963,426 $ 1,008,574 $ 45,148 $ 1,288,426

The accompanying notes are an integral part of these financial statements

34 35 INGHAM COUNTY, MICHIGAN INGHAM COUNTY, MICHIGAN County Transportation System Fund Juvenile Justice Millage Fund Statement of Revenues, Expenditures and Changes in Fund Balance Statement of Revenues, Expenditures and Changes in Fund Balance Final Budget and Actual Final Budget and Actual For the Year Ended December 31, 2015 For the Year Ended December 31, 2015 Favorable Favorable Original Amended (Unfavorable) Original Amended (Unfavorable) Budget Budget Budget over Budget Budget Budget over (Unaudited) (Unaudited) Actual Actual 2014 Actual (Unaudited) (Unaudited) Actual Actual 2014 Actual Revenues Taxes 3,947, 750 $ 3,947,750 $ 4,010,772 $ 63,022 $ 3,993,595 Revenues $ Licenses and permits 7,200 Taxes $ 3,936,850 $ 3,986,850 $ 4,008,292 $ 21,442 $ 3,977,739 Investment earnings (loss) 15,000 15,000 17,366 2,366 86,540 Intergovernmental 10,000 10,000 7,703 (2,297) 15,334 Other 5,400 5,400 7,200 1,800 Investment earning (loss) 15,000 25,000 25,518 518 34,575 Total revenues 3,968,150 3,968,150 4,035,338 67,188 4,087,335 Total revenues 3,961,850 4,021,850 4,041,513 19,663 4,027,648 Expenditures Expenditures Current: Public works 3,848,320 3,908,320 3,861,788 46,532 3,756,028 Welfare 97,000 97,000 95,438 1,562 117,475 Total expenditures 3,848,320 3,908,320 3,861,788 46,532 3,756,028 Total expenditures 97,000 97,000 95,438 1,562 117,475

Revenues over expenditures 113,530 113,530 179,725 66,195 271,620 Revenues over expenditures 3,871,150 3,871,150 3,939,900 68,750 3,969,860

Other financing sources (uses) Other financing sources (uses) Transfers out (113,530) (113,530) (113,530) (107,646) Transfers in 110,157 Transfers out (4,505,128) (4,505,128) (4,059,346) 445,782 (4,375,615) (4,059,346) C-14 Total other financing sources (uses) (113,530) (113,530) (113,530) (107,646) Total other financing sources (uses) (4,505,128) (4,505,128) 445,782 (4,265,458)

Net cnange in runa oa1ances (633,978) (633,978) (119,446) 514,532 (295,598) Net change in fund balance 66,195 66,195 163,974 Fund balances - beginning of year 1, 110,915 1,110,915 1,110,915 946,941 Fund balances -beginning of year 2,289,066 2,289,066 2,289,066 2,584,664 $ 1,110,915 $ 1,110,915 $ 1,177,110 $ 66,195 $ 1, 110,915 Fund balances - end of year Fund balances - end of year $ 1,655,088 $ 1,655,088 $ 2,169,620 $ 514,532 $ 2,289,066

The accompanying notes are an integral part of these financial statements

36 37 INGHAM COUNTY, MICHIGAN Proprietary Funds INGHAM COUNTY, MICHIGAN Statement of Net Position December 31, 2015 Health Services Millage Fund bovernmental Statement of Revenues, Expenditures and Changes in Fund Balance Business-type Activities - Enterprise Funds Activities Final Budget and Actual Major Funds For the Year Ended Oecember 31, 2015 Nonmajor Total Favorable Medical Care Delinquent Community Enterprise Enterprise Internal Original Amended (Unfavorable) Facility Tax Revolving Health Network Funds Funds Service Funds Assets Budget Budget Budget over Current assets: (Unaudited) (Unaudited) Actual Actual 2014 Actual Pooled cash and investments 6,062,442 $ 3,238,860 7,368,563 $ 2,165,571 $ 18,835,436 8,587,902 Cash on deposit with agents 1,935,757 Revenues Delinquent real property taxes receivable 13,191,816 13,191,816 Taxes $ 3,440,503 $ 3,437,503 $ 3,436,724 $ (779) $ 3,439,290 Accounts receivable, net 2,290,803 73,212 812,837 36,318 3,213,170 500,803 Investment earnings (loss) 3,000 11,622 8,622 15,931 Accrued interest receivable 46,779 20,654 4,049 71,482 6,831 Due from other governmental units 1,037,375 2,400,000 146,263 3,583,638 259,889 Total revenues 3,440,503 3,440,503 3,448,346 7,843 3,455,221 Inventories 12,779 12,779 10,000 Prepaid items 28,620 102,245 390 131,255 896,245 Total current assets 8,441,423 17,561,917 10,683,645 2,352,591 39,039,576 12,197,427 Expenditures Current: Noncurrent assets: Health 3,440,503 3,062,115 2,790,741 271,374 3,490,156 Pooled cash and investments - restricted 12,950,608 12,950,608 Investments - restricted 1,075,491 320,000 1,395,491 Total expenditures 3,440,503 3,062,115 2,790,741 271,374 3,490,156 Long-term accounts receivable 168,779 Net pension asset 2,341,060 2,341,060 Capital assets not depreciated 766,359 5,080 771,439 9,828 Capital assets depreciated, net 9,187,166 2,990,373 1,945,513 14,123,052 2,945,156 Revenues over expenditures 378,388 657,605 279,217 (34,935) Total noncurrent assets 26,320,684 2,990,373 2,270,593 31,581,650 3,123,763

Deferred Outflows of Resources: Other financing sources (uses) Pension 2,844,083 35,447 50,140 2,929,670 341,921 Transfers in 30,000 Transfers out (30,000) (30,000) Total assets and deferred outflows $ 37,606,190 $ 17,597,364 13,674,018 $ 4,673,324 $ 73,550,896 $ 15,663,111 C-15 Total other financing sources (uses) (30,000) (30,000) 30,000 Liabilities Current liabilities: Accounts payable and accrued liabilities 1,273,211 62,020 614,158 $ 63,571 2,012,960 $ 1,690,689 Net cnange rn runa oa1ances 348,388 627,605 279,217 (4,935) Salaries and related withholdings 620,730 22,538 340,519 8,706 992,493 42,669 Due to other funds 2,710,000 2,710,000 56,702 Fund balances -beginning of year 11,271 11,271 11,271 16,206 Due to other governments 5,416,526 5,416,526 Accrued interest payable 13,604 13,604 Compensated absences, current 10,700 375,000 22,600 408,300 168,600 $ 11,271 $ 359,659 $ 638,876 $ 279,217 $ 11,271 Fund balances - end of year Bonds/notes/capital leases payable, current 5,998,222 5,998,222 321,580 Unearned revenue 2,564 8,700 11,264 The accompanying notes are an integral part of these financial statements Claims payable, current 54,576 54,576 475,000 Deposits payable- unearned 18,329 30,551 48,880 Total current liabilities 1,966,846 8,817,084 6,748,767 134,128 17,666,825 2,755,240

Noncurrent liabilities: Claims payable, net 575,000 Compensated absences 477,151 20,000 200,000 697,151 20,000 Capital leases payable 321,608 Net other postemployment benefit liability 3,395,898 3,395,898 Net Pension Liability 364,734 419,902 784,636 2,993,919 Advances from other funds 168,779 Total noncurrent liabilities 3,873,049 384,734 200,000 419,902 4,877,685 4,079,306

Total liabilities 5,839,895 9,201,818 6,948,767 554,030 22,544,510 6,834,546

Net position Net investment in capital assets 9,953,525 2,990,373 1,950,593 14,894,491 2,311,796 Restricted for: Police activities 491,380 491,380 Scholarships 16,133 16,133 Unrestricted 21,812, 770 8,395,546 3, 734,878 ~61,188 35,604,382 6,516,769

Total net position $ 31, 766,295 $ 8,~~~~ 6,725,251 ~~.1192~ ~52'_006,38~ $ 8,828,565

The accompanying notes are an integral part of these financial statements

38 39 INGHAM COUNTY, MICHIGAN INGHAM COUNTY, MICHIGAN Proprietary Funds Proprietary Funds Statement of Cash Flows Statement of Revenues, Expenses, and Changes in Fund Net Position For the Year Ended December 31, 2015 For the Year Ended December 31, 2015 Governmental Governmental Business-type Activities - Enterprise Funds Activities Business-type Activities - Enterprise Funds Activities Major Funds Major Funds Medical Care Delinquent Tax Community Nonmajor Total Enterprise Internal Service Non major Total Facility Revolving Health Network Enterprise Funds Funds Funds Medical Care Delinquent Tax Community Enterprise Enterprise Internal Facility Revolving Health Network Funds Funds Service Funds Cash Flows from operating activities Receipts from customers and users 24,754,854 20,395,616 16,198,904 $ 3,260,247 64,609,621 $ 39,484,643 Operating Revenues Quality assurance supplement 2,163,391 2,163,391 Charges for services $ 23,659,927 $ 2,409 $ 11,544,129 $ 2,490,288 $ 37,696,753 $ 38,950,953 Receipts (payment) from interfund services 2,710,000 (1,142,562) 1,567,438 (37,849) Intergovernmental 5,147,781 5,147,781 Payments to suppliers and claimants (25,364, 758) (19,871,536) (12,504,219) (2,701,174 I (60,441,687) (36,257,882) Sales 645,740 645,740 Other receipts 19,925 19,925 Interest on taxes 2,135,739 2,135,739 Net cash provided (used) by operating activities 1,573,412 3,234,080 2,552,123 559,073 7,918,688 3,188,912 Collection fees 1,369,174 1,369,174 Other 2,407,803 394 102,570 2,510, 767 1,590,099 Cash flow from noncapital financing activities Issuance of delinquent tax notes 13,000,000 13,000,000 Total operating revenues 26,067,730 3,507,322 16,692,304 3,238,598 49,505,954 40,541,052 Repayments on lease payable (321,580) Repayments on delinquent tax notes (17,001,778) (17,001, 778) Operating expenses Transfers in 2,267,438 591,016 2,858,454 253,743 Administrative 1,803,318 18,213,348 2,630,876 22,647,542 9,530,318 Transfers out (2,880,000) (157,213) (3,037,213) (332,619) Fees, insurance, pension and current and contingent claims 27,655,478 Net cash provided (used) by noncapital financing activities (6,881,778) 2,267,438 433,803 (4,180,537) (400,456) Depreciation 845,571 18,070 212,619 219,457 1,295,717 795,221 Other operating expenses 23,593,585 23,593,585 168,857 Cash flow from capital and related financing activities Acquisition and construction of capital assets (1,109,003) (995,879) (43,735) (2,148,617) (566,115) Total operating expenses 24,439,156 1,821,388 18,425,967 2,850,333 47,536,844 38,149,874 Interest and fiscal charges paid on debt (75,610) (75,610) Transfer Out (26,532) (26,532) Operating income (loss) 1,628,574 1,685,934 (1,733,663) 388,265 1,969,110 2,391,178 Net cash used in capital and related financing activities (1,109,003) (75,610) (1,022,411) (43,735) (2,250,759) (566,115) C-16 Nonoperating revenue {expenses) Investment earnings (loss) 108,442 34,746 23,290 7,976 174,454 71,542 Cash flow from investing activities Intergovernmental revenue Interest and dividends received 108,442 31,238 23,291 6,920 169,891 71,024 (362,096) (362,096) Maintenance of effort Purchase of investments Interest and fiscal charges (75,610) (75,610) Gain on sale of capital assets Net cash provided by (used in) investing activities (253,654) 31,238 23,291 6,920 (192,205) 71,024

Total nonoperating revenue 108,442 (40,864) 23,290 7,976 98,844 71,542 Net change in pooled cash and investments 210,755 (3,692,070) 3,820,441 956,061 1,295,187 2,293,365

18,802,295 6,930,931 3,548,122 1,529,510 30,810,858 8,230,294 Income (loss) - before contributions and transfers 1,737,016 1,645,070 (1, 710,373) 396,241 2,067,954 2,462,720 Pooled cash and investments, beginning of year

Pooled cash and investments, end of year $ 19,013,050 $ 3,238,861 $ 7,368,563 $ 2,485,571 $ 32,106,045 $ 10,523,659 Transfers in 2,267,438 591,016 2,858,454 253, 743 Transfers out (2,880,000) (26,532) (157,213) (3,063,745) (332,619) Reconciliation to statement of net position Pooled cash and investments 6,062,442 $ 3,238,860 7,368,563 $ 2,165,571 18,835,436 $ 8,587,902 Change in net position 1,737,016 (1,234,930) 530,533 830,044 1,862,663 2,383,844 Pooled cash and investments - restricted 12,950,608 320,000 13,270,608 Cash on deposit with agents 1,935,757 Net position- beginning of year (restated) 30,029,279 9,630,476 6,194,718 3,289,250 49,143,723 6,444, 721

Pooled cash and investments, end of year $ 19,013,050 $ 3,238,860 7,368,563 2,485,571 $ 32,106,044 $ 10,523,659 Net position - end of year $ 31,766,295 $ 8,395,546 $ 6, 725,251 $ 4,119,294 $ 51,006,386 $ 8,828,565 The accompanying notes are an integral part of these financial statements

The accompanying notes are an integral part of these financial statements

40 41 INGHAM COUNTY, MICHIGAN

INGHAM COUNTY, MICHIGAN Fiduciary Funds Proprietary Funds Statement of Fiduciary Net Position Statement of Cash Flows For the Year Ended December 31, 2015 December 31, 2015

Governmental Enterprise Funds Activities Other Employee Major Funds Benefit Trust Fund Agenc:-i Funds

Medical Care Delinquent Tax Community Nonmajor Total Enterprise Internal Service Assets Facility Revolving Health Network Enterprise Funds Funds Funds Pooled cash and investments (see note 3) $ 10,208,112 $ 4,257,401

Reconciliation of Operating Income (Loss) to Accounts receivable 7,874 Net Cash from (used) by Operating Activities Accrued interest receivable 396 427 Operating income (loss) $ 1,628,574 $ 1,685,934 $ (1,733,663) $ 388,265 $ 1,969,110 $ 2,391,178 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Total assets $ 10,208,508 $ 4,265,702 Depreciation expense 845,571 18,070 212,619 219,457 1,295,717 795,221 Bad Debt Expense 93,000 93,000 Changes in assets and liabilities: Liabilities (937,432) Taxes receivable (937,432) Undistributed receipts $ $ 3,383,338 Accounts receivable 777,440 (194,669) 256,597 30,929 870,297 (47,874) Due to other governmental units 882,364 Due from other funds 4,431 4,431 (37,849) Due from other governmental units 36,122 Inventories 1,802 Total liabilities $ 4,265,702 Prepaid items (42,684) 130 (42,554) 89,009 Other current assets (24,522) (24,522) Net pension asset/liability 2,657,047 21,872 25,181 2,704,100 (97,270) Net position Deferred Outflows Pension (4,771,706) (5,643) (15,828) (4,793,177) 179,541 Accounts payable (207,850) (74,744) 3,867,330 (63,517) 3,521,219 224,591 Held in trust for other employee benefits $ 10,208,508 Salaries and related withholdings 10,492 (12,507) (16,475) (18,490) (90,709) Due to other funds 2,710,000 2,710,000

C-17 Compensated absences 200 (1,500) (1,300) (300) Unearned revenue (7,569) (7,569) (4,550) Claims payable (250,000) Net other postemployment benefit liability 575,858 575,858

Net cash provided (used) by operating activities $ 1,573,412 $ 3,234,080 $ 2,552,123 559,073 7,918,688 $ 3,188,912 The accompanying notes are an integral part of these financial statements

The accompanying notes are an integral part of these financial statements

42 43 INGHAM COUNTY, MICHIGAN INGHAM COUNTY, MICHIGAN Other Employee Benefits Trust Fund Discretely Presented Component Units Combining Statement of Net Position Statement of Changes in Fiduciary Net Position December 31, 2015 For the Year Ended December 31, 2015 Brownfield Housing Drain Redevelopment Other Employee Commission Land Bank Commission Authority Total Assets Benefit Trust Current assets Fund Pooled cash and investments $ 228,880 $ 68,392 $ 16,561,335 $ 312,768 $ 17,171,375 Special assessments receivable 52,128,521 269,556 52,398,077 Additions Accounts receivable 12,467 180,616 1,571 194,654 Investment Earnings (Loss) $ {119,961) Accrued interest receivable 20,817 1,417 22,234 Due from other governmental units 2,355,375 604,716 2,960,091 Employer contributions 5,472,273 Land contract receivable 329,995 329,995 Other assets 5,625 3,400,838 3,406,463 Total current assets 246,972 6,335,216 69,316,960 583,741 76,482,889 Total additions 5,352,312 Long-term Assets Land contract receivable 598,764 598, 764 Deductions Capital assets not being depreciated 16,056,287 16,056,287 Pa rtici pant benefits 2,873,272 Capital assets being depreciated, net 1,472,545 995,047 43,691,183 46,158, 775 Total long-term assets 1,472,545 1,593,811 59,747,470 62,813,826

Net additions to net position held in trust 2,479,040 Deferred Outflows for Resources Pension 31,571 111,023 142,594

Net position held in trust for benefits, beginning of year 7,729,468 Total assets and deferred outflows of resources $ 1,751,088 $ 7,929,027 $ 129, 175,453 $ 583,741 $ 139,439,309

Net position held in trust for benefits, end of year $ 10,208,508 Liabilities Current Liabilities C-18 Accounts payable and accrued expenses $ 60,130 1,840,909 1,544,065 $ $ 3,445,104 Due to primary government 1,173,917 1,173,917 Advances from primary government 1,000,000 1,000,000 Due to other governmental units 678,909 467,139 1,146,048 Accrued interest payable 29,935 73,620 103,555 Tenant security deposits 21,506 21,506 Other Deposits 52,913 52,913 Unearned revenue 56,077 56,077 Line of credit 4,325,000 4,325,000 The accompanying notes are an integral part of these financial statements Bonds payable due within one year 12,589,281 12,589,281 Compensated absenses due within one year 2,704 52,000 215,000 269,704 Total current liabilities 84,340 8,048,670 15,761,475 288,620 24,183,105

Noncurrent Liabilities Compensated Absences 4,595 28,000 32,595 Net Pension Liability 279,424 894,581 1,174,005 Bonds Payable 48,049,804 3,864,365 51,914,169 Total Noncurrent liabilities 284,019 48,972,385 3,864,365 53,120,769

Total liabilities 368,359 8,048,670 64,733,860 4,152,985 77,303,874

Net Position Net investment in capital assets 1,472,545 995,047 4,975,518 7,443, 110 Restricted for debt service 52,850,360 52,850,360 Restriced for Capital Projects 13,417,843 13,417,843 Unrestricted (deficit) (89,816) (1,114,690) (6,802,128) (3,569,244) (11,575,878)

Total net position $ 1,382, 729 $ (119,643) 64,441,593 $ (3,569,244) 62,135,435

The accompanying notes are an integral part of these financial statements

44 45 INGHAM COUNTY, MICHIGAN Ingham County, Michigan Discretely Presented Component Units Combining Statement of Activities For the Year Ended December 31, 2015 Notes to Financial Statements December 31, 2015 Brownfield Housing Drain Redevelopment Commission Land Bank Commission Authority Total INDEX Expenses Economic development $ $ 6,525,381 $ 9,966,559 $ 181,356 $ 16,673,296 Housing 1,142,227 1,142,227 Total expenses 1,142,227 6,525,381 9,966,559 181,356 17,815,523

Program revenues 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 48 Charges for services 258,977 1,198,641 1,464,901 2,922,519 Operating grants and contributions 639,809 4,251,806 45,000 4,936,615 2. BUDGETARY INFORMATION 57 Capital grants and contributions 109,662 21,772,024 21,881,686 Total program revenues 898,786 5,560,109 23,236,925 45,000 29,740,820 3. DEPOSITS AND INVESTMENTS 58 Net program expense {243,441) (965,272) 13,270,366 (136,356) 11,925,297 4. RECEIVABLES, UNEARNED REVENUE AND DEFERRED INFLOWS 62 General revenues Property taxes 288,334 288,334 Unrestricted investment earnings 8 78,334 156,017 2,178 236,537 5. CAPITAL ASSETS 64 Gain on the sale of assets Other general revenues 44,553 44,553 6. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS 68 Total general revenues 44,561 78,334 156,017 290,512 569,424 7. LEASES 70 Change in net position {198,880) (886,938) 13,426,383 154,156 12,494,721 8 LONG-TERM DEBT 70 Net position (deficit), beginning of year (Restated) 1,581,609 767,295 51,015,210 (3, 723,400) 49,640,714 C-19

Net position (deficit), end of year $ 1,382,729 $ (119,643) $ 64,441,593 $ (3,569,244) $ 62,135,435 9. RISK MANAGEMENT/ SELF INSURANCE PROGRAMS 73

10. CONTINGENT LIABILITIES 75

11. PROPERTY TAXES 76 The accompanying notes are an integral part of these financial statements 12. PENSION PLANS - COUNTY EMPLOYEES 76

13. PENSION PLANS - DEPARTMENT OF ROAD EMPLOYEES 84

14. PENSION PLANS - MEDICAL CARE FACILITY 88

15. PENSION PLAN ALLOCATION 93

16. DEFINED CONTRIBUTION PENSION PLAN 94

17. POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS 94

18. FUND BALANCES 100

19. PRIOR PERIOD ADJUSTMENT 100

20. UPCOMING ACCOUNTING PRONOUNCEMENTS 101

46 Notes to Financial Statements Land Bank Fast Track Authority (the "Land Bank") - The Land Bank was established on November December 31, 2015 1, 2005 and began operations subsequent to January 1, 2006 pursuant to Public Act 258 and an intergovernmental agreement entered into between the Land Bank and the County. The Land Bank Note 1 - Summary of Significant Accounting Policies is governed by a five member board of which the County Treasurer serves as the chairperson and The financial statements of Ingham County, Michigan (the "County" or "government") have been the other four members are appointed by the County Board of Commissioners for overlapping four prepared in conformity with generally accepted accounting principles (GAAP) as applied to year terms. The County is financially accountable for the Land Bank inasmuch as the County governmental units. The Governmental Accounting Standards Board (GASB) is the accepted specifically issues debt for the exclusive benefit of Land Bank operations. standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the County's accounting policies are described below. The Land Bank has a December 31 year-end. Separate financial statements for the Land Bank are available at the office of the Land Bank Fast Track Authority located at 3024 Turner Street, Lansing, Michigan 48906. Reporting Entity

As required by generally accepted accounting principles, these financial statements present the Ingham County Drain Commission (the "Drain Commission") - All drainage districts established government and its component units, entities for which the government is considered to be pursuant to the Michigan Drain Code of 1956 are separate legal entities with the power to contract, financially accountable. Blended component units, although legally separate entities, are, in to sue and be sued, and to hold, manage and dispose of real and personal property. The statutory substance, part of the government's operations and so data from these units are combined with governing board of Chapter 20 drainage districts consists of the Drain Commissioner, the Chair of data of the primary government. Discretely presented component units, on the other hand, are the County Board of Commissioners and one other member of the County Board of Commissioners. reported in a separate column in the government-wide financial statements to emphasize that they The statutory governing board of Chapter 5 and 6 drainage districts consists of the Michigan are legally separate from the government. Director of Agriculture and the drain commissioner of each county involved in the project. The County Drain Commission has sole responsibility to administer Chapter 3 and 4 drainage districts. A Blended Component Unit drainage board or drain commissioner, on behalf of the drainage district, may issue debt and levy special assessments without the prior approval of the County. The full faith and credit of the County Ingham County Building Authority - The Building Authority is governed by a three-member board may be given for the debt of a drainage district. The nature and significance of the relationship between the primary government and the Drain Commission is such that exclusion would cause the

C-20 appointed by the Ingham County Board of Commissioners. Its sole function is to oversee the financing and construction, if any, of the County's public buildings; therefore, it is reported as if it primary government's financial statements to be misleading or incomplete. The Drain Commission were part of the primary government. has a December 31 year end. Separate financial statements for the Ingham County Drain Commission are available at the office of the Ingham County Drain Commission located at 707 Buhl, Discretely Presented Component Units Mason, Michigan 48854.

Ingham County Housing Commission (the "Housing Commission") - The Housing Commission is Ingham County Brownfield Redevelopment Authority (the "Authority") - The Authority, which was governed by a five-member board appointed by the County for a five-year term. The Housing established pursuant to State statutes and has as its primary purpose to encourage the Commission administrates a subsidized housing complex located in Okemos, Michigan. In addition, redevelopment of under-utilized and environmentally contaminated properties in the geographic they administer the Section 8 voucher system for Ingham County residents. All revenue is provided area, is governed by an 11-member board. The County appoints a voting majority of the Authority's by federal grants or the operations of the rental facility. No general fund assistance is provided to board and is able to impose its will through the ability to approve or disprove the Authority's the Housing Commission but the subsidized housing complex is owned by the County. The project plans. The Authority has a December 31 year end. Separate financial statements for the administration of the Housing Commission is completely separate from the County. Authority are not prepared, but are included herein.

The Housing Commission has a September 30 year end. Separate financial statements are available Joint Ventures for the Ingham County Housing Commission at their offices located at 3882 Dobie Road, Okemos, Michigan. 48864. In 1998, the County entered into an agreement with the City of Lansing to form the City of Lansing and County of Ingham Joint Building Authority (JBA) for the purpose of constructing and managing a building in downtown Lansing that houses the courts, prosecuting attorney and other related departments. The JBA is governed by a three-member board composed of one member each appointed by the City and County and one appointed jointly by the two units. Both the County and City contribute cash and/or property to the JBA. Bonds were issued in 1999 by the JBA to provide the funding necessary to construct the building. Because the joint venture agreement does not provide an explicit contractual formula outlining the County's claim to the JBA's assets, it is deemed to be a "joint venture with no equity interest" and, accordingly, no amounts are reported in the accompanying financial statements for an equity interest. Financial information for the JBA may be

48 49 obtained by writing the Ingham County Financial Services Division, P.O. Box 319, Mason, Michigan determined that it is not a component unit of the County under guidelines established by GASS 48854. Statement No.61.

Jointly Governed Organizations Funds With Other Fiscal Year Ends The Housing Commission discretely presented component unit, the Community Health Center The County, in conjunction with other local governmental and corporate entities, is responsible for Network enterprise fund, the Community Development Block Grant Trust and Agency fund, and appointing the members of the boards of several other organizations. The County has no significant Health Department, Family Court Child Care, Social Welfare, DHS Child Care, Community influence over the management of these organizations. Financial accountability is limited to the Development Block Grant, Community Corrections, Friend of the Court and Cooperative extent of any appropriated operating grant. Therefore, these organizations are not included in the Reimbursement Prosecuting Attorney special revenue funds are reported on a September 30 fiscal County's financial report. year end.

Tri-County Community Mental Health Board. The Tri-County Community Mental Health Board Government-Wide and Fund Financial Statements provides comprehensive mental health services to the residents of Ingham, Eaton, and Clinton counties. Operating revenues are derived from federal, state and local governments as well as from The government-wide financial statements (i.e., the statement of net position and the statement of fees for services. The organization is governed by a 12-member board appointed by the Board of activities) report information on all of the nonfiduciary activities of the primary government and its Commissioners of the three counties it serves. Ingham County's 2015 contribution to the Tri-County component units. For the most part, the effect of interfund activity has been removed from these Community Mental Health Board was $1,813,468. statements. 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 Tri-County Regional Planning Commission. The Tri-County Regional Planning Commission services fees and charges for support. Likewise, the primary government is reported separately from certain Ingham, Eaton, and Clinton counties. The Commission's membership includes those counties, the legally separate component units for which the primary government is financially accountable. City of Lansing, the City of East Lansing, Delta Township, Meridian Township and the Michigan Department of Transportation. Also included by right are the county road commissions and transit The statement of activities demonstrates the degree to which the direct expenses of a given authorities, making a total of 19 voting members. The Commission must adopt a proposed budget function or segment are offset by program revenues. Direct expenses are those that are clearly at its February meeting and submit the same to the Board of Commissioners of the three counties it identifiable with a specific function or segment. Program revenues include (1) charges to customers C-21 serves and to the Lansing City Council with its request for allocation of funds. Each of these units or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by contributes one-quarter of the total annual budget. Ingham County's 2015 contribution was a given function or segment and (2) grants and contributions that are restricted to meeting the $104,958. operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Capital Region Airport Authority. The Capital Region Airport Authority operates the Capital Region International Airport and Mason Jewett Field. The Airport Authority is administered by a five Separate financial statements are provided for governmental funds, proprietary funds and fiduciary member board. The majority of the Board is appointed by the City of Lansing. In addition to a tax funds, even though the latter are excluded from the government-wide financial statements. Major levy of up to three quarters of a mill, the Authority receives operating funds from revenue individual governmental funds and major individual enterprise funds are reported as separate produced by airport operations and from federal grants. The tax is collected by the County for the columns in the fund financial statements. Airport Authority. The County provides no funding to the Airport Authority. Additionally, the County does not hold title to any of the Airport Authority's assets, nor does it have any right to the Measurement Focus, Basis of Accounting, and Financial Statement Presentation Airport Authority's surplus. The government-wide financial statements are reported using the economic resources Capital Area District Library. In 1997, Ingham County and the City of Lansing established the Capital measurement focus and the accrual basis of accounting. The proprietary and other employee Area District Library (CADL). Effective January 1, 1998, the CADL assumed operating responsibility benefits trust funds are reported using the economic resources measurement focus and accrual for the 11 County library branches and one library maintained by the Lansing School District. The basis of accounting. The agency funds have no measurement focus but utilize the accrual basis of CADL provides library services for most of Ingham County. Excluded from the District's service areas accounting for reporting assets and liabilities. Revenues are recorded when earned and expenses are the City of East Lansing and other locations where the district libraries were already are recorded when a liability is incurred, regardless of the timing of related cash flows. Property established. The CADL is administered by a seven-member board. The City of Lansing appoints two taxes are recognized as revenues in the year for which they are levied. Grants and similar items are board members and the County appoints the remaining five board members. Four of the seven recognized as revenue as soon as all eligibility requirements imposed by the provider have been board members must be residents of the City of Lansing or Lansing Township. Although the County met. appoints a voting majority of the CADL Board, it does not have the authority to remove or censure any appointees. Furthermore, other than the initial financial support agreed to by the County, the Governmental fund financial statements are reported using the current financial resources CADL does not provide a financial benefit or impose a financial burden on the County. Accordingly, measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon management has concluded that the County is not financially accountable for the CADL and 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

50 51 period. For this purpose, the County considers revenues to be available if they are collected within fund also accounts for the County's issuance of debt (to provide cash flow for the purchase of the 60 days of the end of the current period. The only exception is for the September 30th year end taxes) and for the resulting debt service payments. Special Revenue Funds for which the collection period is 6 months. The expenditures for these funds are reimbursed by the State of Michigan which does not submit payment until early in the The community health center network enterprise fund accounts for the Health Department's clinical next calendar year. Expenditures generally are recorded when a liability is incurred, as under fee based programs which assure access to primary health care, prevention and support services accrual accounting. However, debt service expenditures, as well as expenditures related to for vulnerable populations, including uninsured and Medicaid individuals. comp.ensated absences and claims and judgments, are recorded only when payment is due. Additionally, the government reports the following fund types: Property taxes, state revenue, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current The special revenue funds are used to account for and report the proceeds of specific revenue fiscal period. Only the portion of special assessments receivable due within the current fiscal period sources that are restricted or committed to expenditure for specified purposes other than debt is considered to be susceptible to accrual as revenue of the current period. All other revenue items service or capital projects. are considered to be measurable and available only when cash is received by the government. The debt service funds are used to account for and report financial resources that are restricted, The County reports the following major governmental funds: committed, or assigned to expenditure for principal and interest.

The general fund is the government's primary operating fund. It accounts for all the financial The capital project fund is used to account for a Community Development Block Grant to fund the resources of the general government, except those accounted for and reported in another fund. cost of utilities for the Jackson National Life expansion in Okemos, Michigan.

The transportation and roads special revenue fund accounts for the operations of the County's The enterprise funds account for those operations that are financed and operated in a manner department of transportation and roads (formally the Ingham County Road Commission.) Funding is similar to private business or where the County has decided that the determination of revenues provided by the State of Michigan and local governmental units. earned, costs incurred and/or net income is necessary for management accountability.

The health special revenue fund accounts for the delivery of a vast array of health services to The internal service funds account for operations that provide services (such as building operations, C-22 county residents. This fund is accounted for on a September 30 fiscal year end, which coincides data processing, employee benefits, and other services) to other departments or agencies of the with its primary funding source and the primary source of revenues are grants and user fees along County, or to other governments, on a cost-reimbursement basis. with general fund appropriations. The agency funds account for assets held for other governments in an agency capacity, specifically The emergency telephone special revenue fund accounts for the operations of the emergency for library penal fines, payroll withholdings and community development block grant funds. telephone and dispatch system and the primary source of revenues are property taxes and telephone surcharges. The other employee benefits trust fund accounts for the activities of the retiree health care plan.

The juvenile justice special revenue fund accounts for a special millage for juvenile care. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments in lieu of taxes and various other The health service millage special revenue fund is used to account for the proceeds from the health functions of the government. Elimination of these charges would distort the direct costs and program service millage which provides funding for basic health care services to lower income Ingham revenues reported for the various functions concerned. County residents. Amounts reported as program revenues include: 1) charges to customers or applicants for goods, The county transportation system special revenue fund accounts for the operations of a services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and transportation service for elderly and disabled county residents. Financing is provided by a specific contributions, including special assessments. Internally dedicated resources are reported as general county tax levy. revenues rather than as program revenues. Likewise, general revenues include all taxes.

The government reports the following major enterprise funds: 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 The medical care facility enterprise fund accounts for the long-term care of elderly residents in a connection with a proprietary fund's principal ongoing operations. The principal operating revenues of medical care unit owned and operated by the County. the enterprise funds and of the government's internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of The delinquent tax revolving enterprise fund accounts for the County's annual purchase of sales and services, administrative expenses, and depreciation on capital assets. All revenues and delinquent real property taxes from each of the local taxing units within the County and the expenses not meeting this definition are reported as nonoperating revenues and expenses. ultimate collection from the property owners of the delinquent taxes with penalty and interest. The

52 53 Assets, Liabilities and Equity purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or Deposits and Investments materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Infrastructure has been recorded retrospectively beginning Cash and cash equivalents include amounts in demand deposits as well as amounts in the County in 1980. Treasurer's cash management pool. The cash pool has the general characteristics of demand deposits in that deposits and withdrawals may be made at any time without prior notice or penalty. Each fund Capital assets are depreciated using the straight-line method over the useful life of the assets as or opinion unit's portion of this pool is included in the "pooled cash and investments" caption in the follows: accompanying financial statements. Years State statutes authorize the government to deposit in the accounts of federally insured banks, credit Building and improvements 30 unions and savings and loan associations and to invest in obligations of the United States, certain Equipment 3-20 commercial paper, repurchase agreements, banker acceptances and mutual funds composed of Vehicles 3-5 otherwise legal investments. Infrastructure 30

Investments are stated at fair value. For the transportation and road assets, capital assets are depreciated using the straight-line method (except for road equipment, which is depreciated using the sum-of-the-years' digit method) over the Receivables and Payables useful life of the assets as follows: Years Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the year are referred to as either interfund receivables/payables (i.e., the current portion Building and improvements 30 of interfund loans) or advances to/from other funds (i.e., the noncurrent portion of interfund loans). Equipment 5-10 All other outstanding balances between funds are reported as due to/from other funds. Any residual Infrastructure 8-50 balances outstanding between the governmental activities and business-type activities are reported in C-23 the government- wide statements as internal balances. Advances between funds are offset by a fund Compensated Absences balance nonspendable account in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources. The County's policies and/or labor agreements permit regular full-time employees to be eligible for paid leave in varying amounts based on length of service, which may be used for vacation, sickness, All trade and property tax receivables are shown net of an allowance for uncollectibles, as applicable. personal days, or for other reasons subject to certain policies. Unused paid leave time is paid upon Medical Care Facility enterprise fund receivables are reported at the estimated net realizable amounts employee termination, but does not accumulate beyond maximums determined by length of service. due from patients, third party payors and others for services rendered, including estimated retroactive This leave time is accrued when incurred in the government-wide and proprietary fund financial adjustments under reimbursement agreements with third party payors. Retroactive adjustments are statements. Accrued vacation, sick leave and other compensated absences are recorded as a accrued on an estimated basis in the period the related services are rendered and adjusted in future governmental fund liability only if these amounts have matured as the result of employee resignations periods as final settlements are determined. or retirements.

Inventories and Prepaid Items Long-term Obligations

Inventories are valued at cost, which approximates market, using the first in/first out method. The In the government-wide financial statements and proprietary fund types in the fund financial costs of governmental fund type inventories are primarily recorded as expenditures when purchased statements, long-term debt and other long-term obligations are reported as liabilities in the applicable rather than when consumed. Donated vaccine inventory in the health special revenue fund is fully governmental activities, business-type activities or proprietary fund type statement of net position. offset by deferred revenue. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bond issuance costs are expensed as incurred. Bonds payable are reported Payments made to vendors for services that will benefit future periods are recorded as prepaid items. net of the applicable bond premium or discount.

Capital Assets In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as Capital assets, which include land, buildings, equipment, vehicles and infrastructure assets (e.g., roads, other financing sources. Premiums received on debt issuances are reported as other financing sources bridges, drains and similar items), are reported in the applicable governmental or business-type while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not activities columns in the government-wide financial statements. Capital assets are defined by the withheld from the actual debt proceeds received, are reported as debt service expenditures. County as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if

54 55 Deferred Outflows/Inflows of Resources is incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used, it is the County's policy to spend funds in this order: committed, assigned, and unassigned. In addition to assets, the statement of net position and/or balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a comsumption of net position that applies to a future period and so will not be recognized Pension as an outflow of resouces (expense/expenditure) until then. The County has three items that qualify for reporting in this category. One of the deferred outflow is the deferred charge on a bond refunding The County offers pension benefits to retirees. The County records a net pension liability for the reported in the government-wide statement of net postion. A deferred charge on refunding results difference between the total pension liability calculated by the actuary and the pension plan's from the difference in the carrying value of refunded debt and its reacquisition price. This amount is fiduciary net position. For purposes of measuring the net position liability, deferred outflows of deferred and amortized over the shorter of the life of the refunded or refunding debt. The second resources and deferred inflows of resources related to pensions, and pension expenses, information item reported as deferred outflows in the government-wide statement of net position is the difference about the fiduciary net position of the pension plan and additions to/deductions from the pension between projected and actual earnings on the pension plan investments. This amount is deferred and plan's fiduciary net position have been determined on the same basis as they are reported by the amortized over five years. In addition, the County has recorded deferred outflows for the County pension plan. For this purpose, benefit payments {including refunds of employee contributions) are contribution made after the measurement date of the net pension liability. recognized when due and payable in accordance with the benefit terms. Investments are report at fair value. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of Other Postemployment Benefit Costs (OPEB) resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of The County offers retiree healthcare benefits to retirees. The County receives an actuarial valuation to item, which arises only under a modified accrual basis of accounting, that qualifies for reporting in this compute the annual required contribution {ARC) necessary to fund the obligation over the remaining category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds amortization period. In the governmental funds, OPEB costs are recognized as contributions are balance sheet. The governmental funds report unavailable revenues from three sources: rehab loans, made, For the government-wide statements and proprietary funds, the County reports the full accrual special assessments and other. In addition, many of the special revenue funds levy property taxes in cost equal to the current year required contribution, adjusted for interest and "adjustment to the December for the upcoming year. This amount is noted as tax levied before the period of use on this ARC" on the beginning of the year the underpaid amount, if any. C-24 report. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. Use of Estimates

Property taxes levied are used to finance the expenditures of the current fiscal period (January 1, 2015 The preparation of the basic financial statements in conformity with generally accepted accounting through December 31, 2015) and are reported as revenue in the financial statements. Amounts not principles requires management to make estimates and assumptions that affect the reported amounts collected within 60 days of the end of the fiscal year are considered unavailable for the current period, of assets and liabilities and disclosure of contingent assets and liabilities at the date of the basic and are reported as deferred inflows. financial statements, December 31, 2015. These estimates and assumptions also affect the reported amounts of revenue and expenditures/expenses during the reporting period. Actual results could Fund Equity differ from those estimates.

Governmental funds report nonspendable fund balance for amounts that cannot be spent because Note 2 - Budgetary Information they are either (a) not in spendable form or (b) legally or contractually require to be maintained intact. Restricted fund balance is reported when externally imposed constraints are placed on the use of the Annual appropriated budgets are adopted on a basis consistent with generally accepted accounting resources by grantors, contributors, or laws or regulations of other governments. The committed fund principles for the general and special revenue funds. All annual appropriations lapse at year end. The balance classification includes amounts that can be used only for the specific purposes determined by general fund budget and the budgets for the following special revenue funds are adopted on an a formal action of the government's highest level of decision-making authority, the Board of activity and cost category basis: Commissioners. The Board of Commissioners is the highest level of decision-making authority for the government that can, authorize a resolution prior to the end of the fiscal year, commit fund balance. Transportation and Roads Once adopted, the limitation imposed by the resolution remains in place until a similar action is taken Health Fund (the adoption of another resolution) to remove or revise the limitation. Assigned fund balance is Friend of the Court Service reported for amounts that are constrained by the government's intent to be used for specific Homestead Property Tax purposes, but are neither restricted nor committed. The Board of Commissioners has by resolution ROD Automation authorized the County Controller and Director of Financial Services to assign fund balance. Unassigned Zoo fund balance is the residual classification used for a general fund. Anti-Drug Abuse Grant Community Corrections When an expense is incurred for purposes for which both restricted and unrestricted net position or Family Court Child Care fund balance are available, the County's policy is to first apply restricted resources. When an expense Cooperative Reimbursement Prosecuting Attorney

56 57 Following is a reconciliation of deposits and investments as of December 31, 2015: For purposes of the above, the cost categories include: personnel services, controllable costs, noncontrollable costs, capital outlay, and debt service principal and interest. Budgets for all other Primary Component special revenue funds are adopted on an activity basis. Government Units Total Pooled cash and investments Each year prior to October 1, County departments, in conjunction with the Controller's staff, prepare Statement of net position $ 99,779,864 $ 17,171,375 $ 116,951,239 and submit their proposed operating and capital budgets for the calendar year commencing the Statement of fiduciary net position 14,465,513 following January 1. Both the operating and capital budgets include proposed expenditures and the 14,465,513 resources to finance them. The budget includes information on the past year, current year estimates Total $ 114,245,377 $ 17,171,375 $ 131,416, 752 and requested appropriations for the next fiscal year.

Deposits and investments No later than December 31 of each year, the proposed budget is presented to the County Board of Bank deposits (checking, savings, and certificates of deposit) 71,426,414 Commissioners. The Board holds public hearings and may add to, subtract from or change $ appropriations. The budget is then legally enacted through passage of a Board resolution. Any changes Investments: in the budget must be within the revenues and reserves estimated as available by the County Treasurer's investment pool 35,731,437 Controller or the revenue estimates must be changed by an affirmative vote of a majority of the Board OPEB investments 10,208,112 of Commissioners. Other Investment (for Medical Care Facility) 1,075,491 Cash on hand 58,391 For internal purposes, budgetary control over expenditures is maintained at the line-item level for Cash on deposits with agents 1,935,757 most governmental funds. However, the Board of Commissioners has authorized the Controller to Net effect of funds with different fiscal year ends 10,981,150 make budgetary transfers between all budgeted funds, activities and line-items where determined Total necessary by the Controller to ensure budgetary compliance at the activity and/or cost category basis. $ 131,416, 752 Supplemental budgetary appropriations were made during the year, but were not in amounts considered material for specific disclosure herein. The County has made budget adjustments Bank Deposits and Treasurer's Investment Pool C-25 subsequent to year-end based upon Board authorization. The County did not have any reportable budget violations for the year ended December 31, 2015. Custodial Credit Risk - Deposits. Custodial credit risk is the risk that in the event of a bank failure, the County's deposits may not be returned. Deposits are exposed to custodial credit risk if they are not covered by depository insurance. State law does not require and the County does not have a policy for Note 3 - Deposits and Investments deposit custodial credit risk.

The County Treasurer maintains a cash management pool that is available for use by all funds and At year-end, $65,935,004 of the combined bank balance of $71,639, 773 was exposed to custodial component units. Each fund and/or opinion unit's portion of the pool is included in the pooled cash credit risk as it was uninsured and uncollateralized. The County believes that due to the dollar and investments caption in the accompanying financial statements. Interest earned from investments amounts of cash deposits and the limits of FDIC insurance, it is impractical to insure all bank deposits. purchased with pooled cash is allocated to all debt service funds and certain special revenue, As a result, the County evaluates each financial institution with which it deposits funds and assesses proprietary and fiduciary funds based on average cash balances. The remaining interest earned is the level of risk of each institution; only those institutions with an acceptable level are used as allocated to the general fund. depositories.

In addition to the cash management pool, a substantial number of depository accounts are maintained Custodial Credit Risk - Investments. For an investment, custodial credit risk is the risk that, in the by various county departments for the deposit of fees, fines and other revenues. These monies are event of the failure of the counterparty, the County will not be able to recover the value of its transferred to the County Treasurer on a regular basis. Depository accounts are also used, in some investments or collateral securities that are in the possession of an outside party. State law does not instances, where the County acts as a collection agent (e.g., court-ordered child support). Year-end require and the County does not have a policy for investment custodial credit risk. The County's book balances in these depository accounts are included in pooled cash and investments for financial investments in U.S. agencies are held by the investment's counterparty, not in the name of the reporting purposes. County.

Following is a summary of the County's investments as of December 31, 2015:

U.S. agencies $ 17,846,466 Commerical Paper 14,945,943 Municipal bonds 2,939,028 Total $ 35, 731,437

58 59 Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its Other Postemployment Benefit Trust Fund Investments obligations. The County's investment policy and State law require that commercial paper be rated in the top two ratings by at least two nationally recognized statistical rating organizations. Ratings are The Trusts' investments are primarily held in a bank administered trust fund. Following is a summary not required for U.S. treasuries or money market accounts. of the Trusts' investments as of December 31, 2015: Total As of December 31, 2015, all of the County's investments in securities of U.S. agencies were rated AAA Investments at fair value, as determined by by Moody's. The County's holdings in municipal bonds were rated as follows: Al $268,820, Aa3 quoted market price: $2,131,298, Aa2 $488,912 and $49,998 not rated. Mutual funds: Domestic equities $ 4,311,286 As of December 31, 2015, the commercial paper were all rated Al. International equities 1,506,401 Emerging markets equity 498,042 Concentration of Credit Risk. State law limits allowable investments but does not limit concentration of Bond mutual funds 3,673,611 credit risk as identified in the list of authorized investments in the summary of significant accounting Cash 22,634 policies. The County's investment policy does not have specific limits in excess of state law on Money market 196,138 concentration of credit risk. At December 31, 2015, the County had greater than 5% of its total investments concentrated as follows: Total investments $ 10,208,112

Investment Type Issuer % of Portfolio Federal Home Loan Bank Various 26.00% The Michigan Public Employees Retirement Systems' Investment Act, Public Act 314 of 1965, as Interest Rate Risk. Interest rate risk is the risk that changes in market interest rates will adversely amended, authorizes the System to invest in domestic and foreign stocks, government securities, affect the fair value of certain investments. State law limits the allowable investments and the corporate securities, mortgages, real estate and various other investment instruments, subject to maturities of some investments as identified in the summary of significant accounting policies. The certain limitations.

C-26 County's investment policy does not have specific limits in excess of state law on investment maturities as a means of managing its exposure to fair value losses arising from increasing interest Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its rates. At year-end, maturities of the County's debt securities were as follows: obligations. The Trusts' investment policy emphasizes appropriate risk/return parameters and compliance with Public Act 314, and gives discretionary authority to its investment managers as opposed to establishing specific credit rating benchmarks. Investment Maturities (fair value by years) Total Fair Value Less than 1 1to5 Gto 10 More than 10 As of December 31, 2015, the Trust's investments in debt securities were rated as follows:

U.S. agencies $ 17,846,466 $ $ 10,900,328 $ 6,946,138 $ United States treasury securities are explicitly guaranteed by the U.S. government and not considered Commerical Paper 14,945,943 $ 14,945,943 to have credit risk. Ratings are derived from Moody's Investors Service, Fitch Ratings, and Standard & Municipal bonds 2,939,028 2,321,425 318,818 298,785 Poor's. When ratings from all three agencies are available, the median rating is used. When ratings are available from two of the agencies, the lower rating is used. When one rating is available, that rating is Total $ 35,731,437 $ 14,945,943 $ 13,221,753 $ 7,264,956 $ 298,785 used. Bond Mutual Rating Funds

Aaa $ 2,560,508 Aa 146,944 A 429,812 Baa 536,347 $ 3,673,611

Custodial Credit Risk - investments. For investments, custodial credit risk is the risk that, in the event of the failure of the counterparty to a transaction, the Trust will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Trusts'

60 61 investment policy requires that securities be held in trust by a third-party institution in the Trusts' Special name or its nominee custodian's name or in bearer form. Although uninsured and unregistered, the Rehab Loans Assessments Trusts' investments are not exposed to custodial credit risk since the securities are held by the Receivable Property Tax and Grants Other Total counterparty's trust department or agent in the Trusts' name. Short-term investments in money Governmental funds market funds and open-end mutual funds are not exposed to custodial credit risk because their General $ $ $ $ 245,584 $ 245,584 existence is not evidenced by securities that exist in physical or book form. Emergency telephone 5,741,895 5,741,895 County transportation 4,087,431 4,087,431 Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude Juvenile justice 4,087,358 4,087,358 of the Trusts' investment in a single issuer. At December 31, 2015, as reported by the Trust's Health services millage 2,385,472 2,385,472 investment managers, there is no concentration of credit risk. Nonmajor governmental funds: Zoo 2,788,225 2,788,225 Farmland preservation 952,832 952,832 Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the Veterans support millage 384 384 fair value of an investment. The Trusts' investment policy does not discuss the maximum maturity for Community development block grant 2,221,744 2,221,744 any single fixed income security or the weighted average portfolio maturity. Trails and parks millage 3,395,461 3,395,461 JN L utilities capital project fund 1,336,422 1,336,422 As of December 31, 2015, weighted average maturities in the bond mutual fund holdings were as Alaiedon water/sewer 449,033 449,033 853,483 853,483 follows: $29,389 mature in less than 1 year, $1,656,799 mature in 1-5 years, $1,392,298 mature in 5- Tobias-Linn water/sewer Total governmental funds $ 2,221, 744 $ 23,439,058 $ 2,638,938 $ 245,584 $ 28,545,324 10 years and $595,125 mature in greater than 10 years.

Governmental funds report unearned revenue recognition in connection with resources that have Note 4 - Receivables, Unearned Revenue and Deferred Inflows been received, but not earned. At the end of the current fiscal year, the components of unearned Receivables in the governmental (including internal service funds) and business-type activities are revenue reported in governmental activities were as follows: comprised of the following: Unearned C-27 Governmental Business-type Revenue Activities Activities Governmental funds Property taxes $ 23,365,503 $ General $ 170,654 Delinquent property taxes 13,191,816 Road 2,404,306 Accounts Receivable 2,850,136 3,213,170 Health 554,477 Leases 1,305,971 Non major governmental funds: Due from component unit 5,863 Friend of the court 150 Due from other governmental units 10,651,222 3,583,638 Drug law enforcement 20,943 Rehabilitation loans 2,187,971 Criminal justice 2,565 Advances to component units 1,000,000 Family court child care 7,549 Interest and other 150,172 71,482 Total governmental funds $ 3,160,644

$ 41,516,838 $ 20,060,106

Amounts not expected to be collected within one year for special assessments and rehabilitation loans receivable are $1,305,971 and $2,221,744 respectively.

The $ 1 million advance to component units is between the County's General Fund and the Ingham County Drain Commission component unit.

Deferred inflows of resources represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The deferred inflows reported at December 31, 2015 are as follows:

62 63 Note 5 - Capital Assets Beginning Balance Additions Disposals Ending Balance Primary Government Business-type Activities

Capital asset activity for the year ended December 31, 2015 was as follows: Capital assets not being depreciated - Land $ 137,912 $ $ $ 137,912 Beginning Construction in progress 1,177,026 1,177,026 Balance Additions Disposals Adjustments Ending Balance 137,912 1,177,026.00 1,314,938 Governmental Activities Capital assets not being depreciated - Intangible assets $ 2,490,364 $ 648,884 $ - $ $ 3,139,248 Capital assets being depreciated: Land 8,958,025 8,958,025 Buildings and improvements 25,419,095 488,419 {637,090) 25,270,424 25,682,314 1,822,396 Road related land improvements 27,504,710 Equipment and furniture 2,862,922 483,174 {18,309) 3,327,787 Machinery not yet inservice 315,326 315,326 Construction in progress 593,612 625,517 (582,509) 636,620 28,282,017 971,593 {655,399) 28,598,211 Total capital asets, not being depreciated 37,724,315 3,412,123 (582,509) 40,553,929 Less accumulated depreciation: Capital assets being depreciated: Buildings and improvements {11,856,980) (1,027,649) 637,090 {12,247,539) 580,600 (89,868) Buildings and improvements 96,037,294 96,528,026 Equipment and furniture (2,521,360) {268,068) 18,309 ( 2, 771, 119) Equipment and furniture 33,863,655 1,565,235 (254,043) 35,174,847 Infrastructure - signals 1,095,452 1,095,452 {14,378,340) (1,295,717) 655,399 ( 15,018,658) Infrastructure - roads 157,465,053 11,282,989 168, 748,042 Infrastructure - bridges 21,166,984 1,392,592 22,559,576 Net capital assets being depreciated 13,903,677 (324,124) 13,579,553 Infrastructure - subdivisions 9,291,427 785,400 10,076,827 Total capital asets, being depreciated 318,919,865 15,606,816 (343,911) 334, 182, 770 C-28 Net capital assets $ 14,041,589 $ 852,902 $ $ 14,894,491 Less accumulated depreciation: Buildings and improvements ( 60, 177,822) (3,088,423) 89,868 (63,176,377) Equipment and furniture (26,647,211) ( 2,045,222) 237,841 (28,454,592) Infrastructure - signals (228,303) (73,030) (301,333) Infrastructure - roads ( 100, 510, 131) (6,178,327) ( 106,688,458) Infrastructure - bridges (4,641,403) (451,192) ( 5, 092, 595) Infrastructure - subdivisions (3,533,747) (201,537) (3,735,284) Total accumulated depreciation (195, 738,617) (12,037,731) 327, 709 ( 207,448, 639) Net capital assets being depreciated 123, 181, 248 3,569,085 ( 16,202) 126, 734, 131

Net capital assets $ 160,905,563 $ 6,981,208 $ (598,711) $ $ 167,288,060

64 65 Depreciation expense was charged to functions/programs of the primary go\ernment as follows: Housing Commission Component Unit Beginning Ending Depreciation of governmental activities by function: Balance Additions Disposals Balance General government $ 766,221 Capital assets not being depreciated - Public safety 1,093, 777 Land 327,078 327,078 Judicial 34,696 $ $ $ $ Health 910,095 Capital assets being depreciated: Cultural and recreation 924,214 Buildings and improvements 5,260,184 5,260,184 Public works 7,513,507 Equipment 205,907 3,123 Capital assets held by internal service funds are 209,030 charged to various functions based on their usage 5,466,091 3,123 5,469,214 of the assets 795,221 Less accumulated depreciation: Total governmental activities $ 12,037, 731 Buildings and improvements (3,984,165) (151,890} (4,136,055) Equipment (178,964} (8,728} (187,692)

Depreciation of business-type activities by function: (4,163,129} (160,618} (4,323,747) Medical care facility $ 845,571 Health clinic 212,619 Net capital assets being depreciated 1,302,962 (157,495} 1,145,467 Delinquent tax collection 18,070 Non-major funds Net capital assets $ 1,630,040 $ (157,495} $ $ 1,472,545 Parks 33,481

C-29 Fair 137,379 Inmate stores 48,597

Land Bank Total business-type activities $ 1,295, 717

Beginning Ending Balance Additions Deletion Adjustment Balance Capital assets not being depreciated - Land $ - $ 1,000 $ - $ - $ 1,000

Capital assets being depreciated: Rental Propery 881,356 (7,956) 873,400 Building and Improvements 235,759 235,759 Total capital assets being depreciated 881,356 235, 759 (7,956) 1,109,159

Less accumulated depreciation: Rental Propery (98,946) (44,067) 27,901 (115,112)

Net capital assets being depreciated 782,410 191,692 19,945 994,047

Net capital assets $ 782,410 $ 192,692 $ $ 19,945 $ 995,047 ---

66 67 Drain Commission Component Unit Due to/from balances result primarily from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur, transactions are recorded in the Beginning Ending accounting system, and/or payments between funds are made. Outstanding advances between Balance Additions Disposals Adjustment Balance funds relate to working capital loans made to various funds. Capital assets not being depreciated - Intangible assets $ 1,000,000 $ 76,888 $ $ 1,076,888 Transfers are used to: (1) move unrestricted revenues collected in the general fund to finance Construction in progress 17,420,834 4,927,896 (6,843,094) (526,237) 14,979,399 various programs accounted for in other funds in accordance with budgetary authorizations; (2) 18,420,834 5,004, 784 (6,843,094) (526,237) 16,056,287 move revenues from the fund that is required to collect them to the fund that is required or allowed to expend them. Capital assets being depreciated: Transfer In Equipment 1,440,946 70,434 1,511,380 Infrastructure 61,903,529 6,843,094 68,746,623 Emergency Community Nonmajor Transfer Out General Fund Health Fund Telephone Health Center Governmental Total capital assets being depreciated 63,344,475 6,913,528 70,258,003 General $ $ 5,356,450 $ $ 2,267,438 $ 7,232,226 Less accumulated depreciation: Health Equipment ( 1,288,341) (56,572) ( 1, 344, 913) County transportation system 113,530 Infrastructure (23,268,199) (1,953,708) (25,221,907) Emergency telephone 219,562 ( 24, 556, 540) (2,010,280) ( 26, 566, 820) Juvenile justice 27,380 4,031,966 Health service millage 30,000 Delinquent tax 2,760,000 Net capital assets being depreciated 38, 787,935 4,903,248 43,691,183 Community health network Non major govt funds 279,852 15,000 Net capital assets $ 57,208, 769 $ 9,908,032 $ (6,843,094) $ (526,237) $ 59,747,470 Nonmajorenterprise funds 148,406 Internal services 332,619 Timing differences 1,817 537

C-30 Note 6 - lnterfund Receivables, Payables, and Transfers $ 3,359,168 $ 5,358,267 $ $ 2,267,438 $ 11,831,910

The composition of interfund balances as of December 31, 2015, was as follows: Transfer In Transfer Out (continued) Nonmajor Enterprise Internal Services Total Tranfers out Receivable Payable Due to/from other funds General $ 320,000 $ 218,404 $ 15,394,518 General $ 4,382,530 $ Health County transportation system 113,530 Health Emergency telephone 219,562 Delinquent tax 2,710,000 Juvenile justice 4,059,346 Nonmajor governmental funds 1,615,828 Health service millage 30,000 Internal service funds 56, 702 Delinquent tax 120,000 2,880,000 Community Health Network 26,532 26,532 Non major govt funds 151,016 445,868 $ 4,382,530 $ 4,382,530 Non major enterprise funds 8,807 157,213 Internal services 332,619 Receivable Payable Timing differences 2,354 Advances to/from other funds $ 591,016 $ 253, 743 $ 23,661,542 General $ 168,779 $ Internal service funds 168, 779 $ 168, 779 $ 168,779 The timing differences are caused by several special revenue funds being reported on a September 30th year end.

The $1 million advance from component unit reported in the General Fund is an advance to the Drain Commissioner Component Unit to provide funding to assist with cash flows.

68 69 Note 7 - Leases Annual debt service requirements to maturity for general obligation bonds are as follows:

Operating Leases (Lessee). The government leases certain buildings and office space under noncancellable operating leases. Total costs for such leases were $1,014,089 for the year ended Governmental Activities December 31, 2015. Future minimum lease payments under governmental activities for these Year Ending Building Authority Local Infrastructure Brownfield Redevelopment leases are as follows: December 31, Principal Interest Principal Interest Principal Interest Joint Building 2016 1,990,000 431,634 195,000 62,318 215,000 176,687 Year Ending Authority 2017 1,685,000 351,382 205,000 52,435 275,000 168,949 2018 1, 745,000 286,117 215,000 42,013 305,000 158,824 December 31, Lease Other Leases Total 2019 1,080,000 218,675 225,000 32,988 340,000 146,625 2016 $ 499,330 $ 470,392 $ 969,722 2020 1,110,000 182,178 125,000 16,830 360,000 132,449 2017 498,500 262,665 761,165 2021-2025 1,980,000 494,803 270,000 13,992 2,010,000 412,511 2018 500,977 263,429 764,406 2026-2030 960,000 189,126 575,000 33,087 2019 500,400 266,504 766,904 $ 10,550,000 $ 2,153,915 $ 1,235,000 $ 220,576 $ 4,080,000 $ 1,229,132 2020 14,605 14,605 Installment obligations. In 2013, the County purchased a new phone system at a cost of $1,607,901 $ 1,999,207 $ 1,277,595 $ 3,276,802 under a five year zero interest payment arrangement. At year end the outstanding balance was $643,161.

Operating Leases (Lessor). The County leases certain buildings and office space to other agencies Annual debt service requirements to maturity for installment obligations are as follows: under cancellable lease agreements. The lease payments are charged to other governmental entities at the pro-rata portion of the related debt service payments plus maintenance costs. The assets leased to other governmental entities under such arrangements were included in Governmental Activities

C-31 governmental activities at December 31, 2015; these assets (i.e., buildings and improvements) cost $20,452,807 with accumulated depreciation as of December 31, 2015 of $15,784,989 (for a net Year Ended book value of $4,667,818). December 31, Principal Interest 2016 $ 321,580 Note 8 - Long-term Debt 2017 321,581 General obligation bonds. The government issues general obligation bonds to provide funds for the $ 643,161 $ acquisition and construction of major capital facilities. General obligation bonds have been issued for governmental, business-type and component unit activities.

General obligation bonds are direct obligations and pledge the full faith and credit of the County. Drain assessments. The government has been assessed for its at-large share of certain drainage These bonds are typically issued as 10-20 year serial bonds with varying amounts of principal district project costs, payable over a multiyear period with interest at 2.25 to 4.6 percent. The maturing each year. General obligation bonds currently outstanding are as follows: original amount of the outstanding drain assessments was $275,590. Drain assessments outstanding at year-end amounted to $51,557. Annual debt service requirements to maturity for Purpose Interest Rates Amount drain assessments are as follows: Governmental activities Governmental Activities Building authority 2.5-6.5% $ 10,550,000 Year Ended Local unit infrastructure 4.0-6.0% 1,235,000 Brownfield redevelopment 4.0-4.25% 4,080,000 December 31, Principal Interest $ 15,865,000 2016 15,435 1,439 2017 15,665 962 2018 15,896 477 2019 4,561 117 $ 51,557 $ 2,995

70 71 Delinquent tax notes. The government issues general obligation limited tax notes to finance the Land Bank notes payable. The Land Bank obtained two notes through PNC Bank ($3.0 million purchase of delinquent real property taxes receivable from each taxing district in the County. authorized and $2.0 million authorized) during the 2009 fiscal year. The outstanding notes mature During the year ended December 31, 2015, the County issued $13,000,000 in delinquent tax notes. on July 1, 2016 and carry variable interest rates based on the 3-month LIBOR rate; at December 31, These notes are reported in the delinquent tax revolving enterprise fund as they are expected to be 2015 the PNC Bank line interest rates was 1.27%. The outstanding balance of the line of credit at repaid from fund revenues. Each series of delinquent tax notes are subject to variable interest rates December 31, 2015 was $4,325,000. which are determined on a weekly basis by the County's remarketing agent using established criteria and legal limitations. Principal and interest payments are predicated upon actual collections Changes in long-term debt. Long-term debt activity for the year ended December 31, 2015 was as of delinquent property taxes, which are subject to collection over a period not to exceed two years; follows: accordingly, because of the two year collection and tax note repayment period, the notes are Restated considered long-term debt. Delinquent tax notes totaling $5,998,222 from the 2014 series were Beginning Ending Due Within outstanding at December 31, 2015. Balance Additions Reductions Balance One Year Primary Government Drain bonds and notes. The Drain Commissioner is authorized under State statutes to issue special Governmental Activities General obligation bonds - county $ 12,475,000 $ $ (1,925,000) $ 10,550,000 $ 1,990,000 assessment bonds and drain notes for the construction or maintenance of drainage districts. Such General obligation bonds - other governments 1,420,000 (185,000) 1,235,000 195,000 bonds and notes are repaid from special assessments levied upon the benefiting property owners. Installment obligations - phone 964, 740 (321,580) 643,160 321,580 At December 31, 2015, drain bonds and notes totaling $60,542,815 were outstanding; $28,609,600 Drain assessments 66, 759 (15,202) 51,557 15,434 of new bonds and notes were issued during the current year. Drain bonds and notes carry interest Deferred amounts for: at rates ranging from 1 to 5 percent. Issuance premiums 150,073 (37,518) 112,555 Compensated absences 5,408,280 5,908,650 (5,538,730) 5,778,200 3, 752,380 $ 20,484,852 $ 5,908,650 $ (8,023,030) $ 18,370,472 $ 6,274,394 Advance and Current Refundings. During the year, the County issued $5,255,000 in general obligation bonds for three separate issues. The proceeds of these bonds were used to advance Business-Type Activities refund $6,975,000 of outstanding bonds with a higher interest rate. The net proceeds of Delinquent tax notes $ 10,000,000 $ 13,000,000 $ (17,001, 778) $ 5,998,222 $ 5,998,222 $5,197.969 (after payment of $115,137 in underwriting fees, insurance and other issuance costs) Compensated absences 1,097,155 1,091,296 ( 1,083,000) 1,105,451 408,300 C-32 $ 11,097, 155 $ 14,091,296 $ (18,084,778) 7,103,673 6,406,522 plus an additional $1,243,498 of Drain funding were used to purchase U.S. governmental securities. $ $ Those securities were deposited in an irrevocable trust with an escrow agent to provide all future Component Units debt service payments on the original bonds. As a result, the bonds are considered to be defeased Housing Commission and the liability for the bonds has been removed from the Drain Component Unit Statement of Net Compensated absenses $ 13,267 $ 7,389 $ (1,188) $ 19,468 $ 14,873 Position. The advance refunding reduced total debt service payments over the next 11 years by $654,000 which represents an economic gain of approximately $460,000. Land Bank Notes Payable $ 3,325,000 $ 1,350,000 $ (350,000) $ 4,325,000 $ 4,325,000 Annual debt service requirements to maturity for drain bonds and notes are as follows: Drain Commission Drain Commission Drain bonds and notes $ 46,443, 796 $ 28,609,600 $ (14,510,581) $ 60,542,815 $ 12,589,281 Year Ended Deferred amounts for: Issuance premiums 107,228 70,364 (7,243) 170,349 December 31, Principal Interest Issuance discounts (66,094) (11,527) 3,542 (74,079) 72,000 (73,600) 2016 12,589,281 1, 702,306 Compensated absences 81,600 80,000 52,000 $ 46, 556, 930 $ 28, 750,037 $ (14,587,882) $ 60, 719,085 $ 12,641,281 2017 6, 733,231 1,553,655 2018 3,076,131 1,392,332 Brownfield Redevelopment 2019 3,066,813 1,289,805 General obligation bonds $ 4,230,000 $ $ (150,000) $ 4,080,000 $ 215,000 Deferred amounts for: 2020 2,921,813 1,190,332 Issuance premiums 12,093 (1,008) 11,085 2021-2025 13,644,581 4,535,165 Issuance discounts (12,697) 977 (11,720) 2026-2030 9,644,975 2,470,802 $ 4,229,396 $ $ (150,031) $ 4,079,365 $ 215,000 2031-2035 4,690,990 1,160,862 2036-2040 2,090,000 606,195 Note 9 - Risk Management I Self-Insurance program 2041-2045 2,085,000 207,375 The government manages its risk exposures and provides certain employee benefits through a $ 60,542,815 $ 16,108,829 combination of self insurance programs, risk management pools, commercial insurance and excess coverage policies. For risks that are commercially insured, settlements have not exceeded

72 73 insurance coverage in any of the past three years. Following is a summary of these self insurance Because management anticipates the illustrated self-insured premium rates to approximate actual programs and risk management pool participation. costs over time and it believes that any liabilities for incurred but not reported (IBNR) claims at year end would be immaterial, no IBNR liability has been recorded. Liability. The County participates in the Michigan Municipal Risk Management Authority {MMRMA) for general and automobile liability, motor vehicle physical damage and property damage Workers' Compensation. The government maintains a self-insurance program for workers' coverages. MMRMA provides risk management, underwriting, reinsurance, and claim review and compensation coverage which is accounted for in the workers' compensation internal service fund processing services for all member governments pursuant to its charter. Under most circumstances, and the medical care facility {MCF) enterprise fund (for MCF employees). The program is the County's maximum loss retention per occurrence was as follows: administered by a third-party administrator who conducts safety inspections and provides claims review and processing services. Premiums are paid into the internal service fund by all other funds Maximum Retention per based on payrolls and job classifications and are available to pay claims, claim reserves, excess Type of Risk Occurrence coverage and administrative costs.

General and automobile liability* $500,000 Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can Property damage $1,000 be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of Motor vehicle physical damage $15,000 per vehicle $500,000 subject to an annual aggregate limit of $5 million. Liabilities include an amount for claims $30,000 per occurrence that have been incurred but not reported. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of pay outs, and other economic and social factors. *The liability retention amount was changed from $150,000 effective July 1, 2015

Changes in the balances of workers' compensation claims liabilities during the past two years are as The government makes annual contributions to MMRMA based on actuarial studies using historical follows: data and insurance industry statistics. These contributions are paid from the insurance internal 2015 2014 service fund using premiums paid into it by other funds of the government. Such contributions as received by MMRMA are allocated between its general and member retention funds. Economic Workers' compensation fund:

C-33 resources in MMRMA's general fund are expended for reinsurance coverage, claim payments and Unpaid claims, beginning of year $ 950,000 $ 1,125,000 certain general and administrative costs, whereas resources in the member retention fund are used Incurred claims (including IBNR) 120, 795 102,571 for loss payments and defense costs up to the members' self insured retention limits along with Claim payments {370, 795) (277,571) certain other member specific costs. Accordingly, the government records an asset for its portion of Unpaid claims, end of year $ 700,000 $ 950,000 the unexpended member retention fund (i.e., cash on deposit with agent), which amounted to $1,587,857 as of December 31, 2015. Medical care facility: Changes in the balances of claims liabilities during the past two years, including provision for Unpaid claims, beginning of year $ 32,726 $ 46,000 incurred but not reported (IBNR) claims for the Insurance Fund are as follows: Incurred claims (including IBNR) 60,000 31,104 Claim payments {38,150) (44,378) 2015 2014 Unpaid claims, end of year $ 54,576 $ 32, 726 Unpaid claims, beginning of year $ 350,000 $ 225,000 Incurred claims (including change in IBNR provision) 109,140 204,156 Claim payments (109,140) (79,156) Note 10 - Contingent Liabilities Unpaid claims, end of year $ 350,000 $ 350,000 Amounts received or receivable from grantor agencies and health care intermediaries, including Medicare and Medicaid, are subject to audit and adjustment by those grantor agencies or intermediaries. Any disallowed claims, including amounts already collected, may constitute a Employee Benefits. The County purchases fully-insured health insurance for all employees and liability of the applicable funds. The amount, if any, of expenditures/expenses which may be retirees. The County is self-insured for dental and vision coverage. All of these plans are accounted disallowed by the grantors or intermediaries cannot be determined at this time although the for in the employee benefits internal service fund. The self-funded plans are administered by third government expects such amounts, if any, to be immaterial. party administrators who provide claims review, processing services and illustrated premium rates. All other funds pay into the employee benefit fund the cost of providing these benefits based upon The government and its component units, individually or jointly, are defendants in pending or the actual or illustrated premium rate. These proceeds are used to purchase insurance coverage or threatened lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the pay the claims and administrative costs for the self-insured programs. opinion of the government and component unit's counsel that resolution of these matters will not have a material adverse effect on the financial cor.dit'cn of the government.

74 75 The MERS plan covers Note 11- Property Taxes 01- Confidentials Closed to new hires County general operating property taxes are levied annually on July 1 (the lien date) to fund 10- General Management Closed to new hires operations for the current year. The property taxes are due in full within nine months {prior to 19- County-Wide Elected Officials Closed to new hires Benefit multiplier 2.50% Multiplier (80% max) March 1), at which time uncollected taxes became delinquent. The assessed value of real and Normal retirement age 60 personal property is established by the local units, accepted by the County and equalized under Vesting 6 years State statute at approximately 50% of the current estimated market value. In March 1994, Early retirement (unreduced) 55/15 Michigan voters approved Proposal A which requires property taxes to be levied based on the Early retirement (reduced) 50/25 taxable value of the underlying property. Annual increases in taxable value are limited to the lesser Final average compensation 3 years Employee contributions are 6.56%, 7.59%, and 9.66%, respectively of 5% or the rate of inflation. Taxable value reverts to 50% of true cash value when the property is

sold. Taxable value is determined by using such factors as equalized, assessed and capped values. 02- Sheriff FOP Supervisory Closed to new hires Benefit multiplier 3.20% Multiplier (80% max) The taxable value of real and personal property for the July 1, 2015 general operating levy was $7.3 Normal retirement age 60 billion. The general operating tax rate for this levy was 6.3512 mills, which is below the 6.4206 mills Vesting 10 years Early retirement (unreduced) 55/15 or 25 and Out allowed by the Headlee Amendment to the Michigan Constitution. Final average compensation 3 years Employee contributions 19.61% The County also had a voter approved tax of 0.4800 mills for operations of the County Transportation System, 0.1200 for public transportation, 0.8431 mills for the Emergency Telephone 09- Judges Open division Service, 0.6000 mills for the Juvenile Justice activity, 0.4100 mills for Potter Park Zoo operations, _9_0_-_A_s_si_st_a_n_t _P_ro_s_e_cu_t_in_,g.,_A_tt_o_rn_e .... y_s ______Closed to new hi res Benefit multiplier 2.50% Multiplier (80% max) 0.1400 mills for farmland preservation initiatives, 0.3500 for health services, 0.5000 for Parks and Normal re ti re me nt age 60 Trails and 0.0330 for veteran relief fund. With the exception of the veteran relief fund, all of these Vesting 6 years 1 taxes are levied as of December 1' for the next year. This results in substantial deferred inflows Early retirement (unreduced) 55/15 being reported in these special revenue funds. Early retirement (reduced) 50/25 C-34 Final average compensation 5 years Employee contributions are 3.14% and 1.40%, respectively By agreement with various taxing authorities, the County purchases at face value the real property 11- General Library Closed to new hires taxes returned delinquent each March 1 and records a corresponding delinquent taxes receivable. _9_3_-_Le.... g~a_l_R_e_se_a_r_ch_C_le_r_ks ______O~p_e_n_d_i_vi_s_io_n ______These receivables ($13.2 million at December 31, 2015) are pledged for repayment of the Benefit multiplier Svc x (1.20% times FAC<$4,200, plus 1.70% times FAC>$4,200) delinquent tax notes payable; subsequent collection of the receivables, along with interest and Normal retirement age 60 collection fees thereon and investment earnings, are used to retire the debt. Vesting 10 years Early retirement (reduced) 50/25 or 55/15 Final average compensation 5 years Note 12 - Pension Plans - County Employees (including Drain and Housing Commission Employee contributions 0% Component Units) _1_2_-_G_e_n_e_ra_l_IC_E_A_P_r_o_fe_s~s_io_n_a_ls______C~l~o~se~d~t~o~n~e~w~h~ir~e~s ______Plan Description. The County's defined benefit pension plan provides certain retirement, disability Benefit multiplier 2.50% Multiplier (80% max) and death benefits to plan members and beneficiaries. The County participates in the Municipal Normal retirement age 60 Vesting 10 years Employees Retirement System of Michigan (MERS), an agent multiple-employer plan administered Early retirement (unreduced) 55/15 by the Retirement Board of MERS. Act No. 427 of the Public Acts of 1984, as amended, establishes Early retirement (reduced) 50/25 and amends the benefit provisions of the participants in MERS. The Municipal Employees Final average compensation 5 years Retirement System of Michigan issues a publicly available financial report that includes financial COLA for future retirees 2.50% (Non-Compound) statements and required supplementary information for MERS. That report may be obtained by Employee contributions 13.42% writing to the MERS at 1134 Municipal Way, Lansing, Michigan 48917 or by calling (800) 767-6377. 13- General OPEIU Court Closed to new hires Benefit multiplier 2.50% Multiplier (80% max) Benefits Provided. The plan provides certain retirement, disability and death benefits to plan Normal retirement age 60 members and beneficiaries. PA 427 of 1984, as amended, established and amends the benefit Vesting 10 years provisions of the participants in MERS. Early retirement (unreduced) 55/15 Early retirement (reduced) 50/25 Final average compensation 3 years Employee contributions 9.71%

76 77 14- General TOPS UAW Closed to new hires 21- FOP Sheriff Deputies Closed to new hires Benefit multiplier 2.50% Multiplier (80% max) 24- Sheriff Deputies MAP Closed to new hires Normal retirement age 60 Benefit multiplier 3.20% Multiplier (80% max) Vesting 10 years Normal retirement age 60 Early retirement (unreduced) 55/15 Vesting 10 years Early retirement (reduced) 50/25 Early retirement (unreduced) 55/15 or 25 and Out Final average compensation 5 years Final average compensation 5 years Employee contributions 4.82% Employee contributions are 10.96% and 12.16%, respectively

_1_5_-_A_n_im~a_l~C~o~nt~r~o_l~FO.:_P~~~~~~~~~~~~~~~~~-C_l~os~e~d~to'--ne~w~h~i~re~s=--~~~~~~~~~~~~~~~~~~ 22- FOP 911 Non-Supervisory Former East Lansing Closed to new hires Benefit multiplier 2.50% Multiplier (80% max) Benefit multiplier 2.50% Multiplier (80% max) Normal retirement age 60 Normal retirement age 60 Vesting lOyears Vesting 10 years Early retirement (unreduced) 55/15 or 25 and Out Early retirement (unreduced) 50/25 Final average compensation 3 years Early retirement (reduced) 55/15 COLA for future retirees 2.50% (Non-Compound) Final average compensation 3 years Employee contributions 15.49% Employee contributions 1.20%

~1~6~-~G~e~n~e~r~al~C~o~m..:.:.:.:m~i~ss~i~o~n~e~rs=--~~~~~~~~~~~~~~~~C~l~o~se~d~to~n~e~w~h~i~re~s=--~~~~~~~~~~~~~~~~~~ 23- FOP Non-Supervisory Former Lansing Open division Benefit multiplier 2.00% to Social Security Age (no max), 1. 70% after SS Age (no max) Benefit multiplier Bridged Benefit: 1.60% Multiplier (no max) Termination FAC; to Normal retirement age 60 2.00% Multiplier (no max) Vesting 6years Bridged benefit date 12/31/2012 Early retirement (unreduced) 55/15 Normal retirement age 58 Early retirement (reduced) 50/25 Vesting 8 years Final average compensation 5 years Early retirement (l;l.nreduced) 50/25 Employee contributions 4.76% Early retirement (reduced) 55/15 Final average compensation 2 years 17- !CEA Nurses Closed to new hires Employee contributions 2.70%

C-35 98- MNA Nurses Closed to new hires Benefit multiplier 2.25% Multiplier (80% max) _9_1_-_P_ar_k_s_U_n_io_n_Em____,_p_I o_.y_e_e_s ______Closed to new hi res Normal retirement age 60 Benefit multiplier 2.25% Multiplier (80% max) Vesting 6years Normal retirement age 60 Early retirement (unreduced) 55/15 Vesting lOyears Early retirement (reduced) 50/25 Early retirement (reduced) 50/25 or 55/15 Final average compensation 3 years Final average compensation 5 years COLA for future retirees 2.50% (Non-Compound) Employee contributions 1.20% Employee contributions are 11.87% and 13.07%, respectively _9_2_-_P~a_rk_s_N~o~n_-~U_n~io~n~E~m'-"-'-pl_o~y_e_es______C_lo_s_e~d~t~o_n~e_w~h~i~re~s'------18- ICEA Court Professionals Closed to new hires Benefit multiplier 2.50% Multiplier (80% max) Benefit multiplier 2.25% Multiplier (80% max) Normal retirement age 60 Normal retirement age 60 Vesting lOyears Vesting 10 years Early retirement (unreduced) 55/25 Early retirement (unreduced) 55/15 or 20 and Out Early retirement (reduced) 50/25 or 55/15 Final average compensation 5 years Final average compensation 3 years Employee contributions 9.84% Employee contributions 1.20%

78 79 94- Zoo Hired After 7/1/2007 Closed to new hires HF- TOPS UAW Hired After 3/1/2013 Open division Benefit multiplier 2.00% Multiplier (no max) HI- Animal Control FOP Hired After 4/1/2013 Open division Normal retirement age 60 HJ- General ICEA Professionals Hired After 1/1/2013 Open division Vesting 10 years HK- Assistant Prosecuting Attorneys Hired After 4/1/2013 Open division Early retirement (reduced) 50/25 or 55/15 HL- !CEA Nurses Hired After4/1/2013 Open division Final average compensation 5 years HM- UAW Zoo Hired After 5/1/2013 Open division Employee contributions 1.20% HN- General OPEIU Court Hired After 1/1/2013 Open division HP- MNA Nurse Practitioners/Clinic Hired After 1/1/2014 Open division 95- UAW Local 2256 Open division HT- ICEA Court Professionals Hired After4/15/2014 Open division Benefit multiplier 2.80% Multiplier for Svc< 35 yrs, 1.50% for Svc> 35 yrs (100% max) _H_U_-_Te_a_m_s_te_r_s_Lo_ca_l_5_80_Z_o_o_H_ir_e_d_A_ft_er_4~/~V_20_1_3~~~~~~-0~p_e_n_di_v_is_io_n~~~~~~~~~~~~~~~~~ Normal retirement age 58 Benefit multiplier Hybrid Plan - 1.25% Multiplier Vesting 8 years Normal retirement age 60 Early retirement (unreduced) Rule of 65 Vesting 6years Final average compensation 2 years Final average compensation 3 years Employee contribution 2.90% Employee contributions 0%

97-Teamsters Local 580Supervisors Former Lansing Closed to new hires _H_G_-_FO_P_S_h_e_ri_ff~/D_e~p_u_ti_es_H_i_re_d_A_ft_e_r~l/_V~2_0_13~~~~~~~-0~p_e_n_di_v_is_io_n~~~~~~~~~~~~~~~~~ Benefit multiplier Bridged Benefit: 1.80% Multiplier (no max) Termination FAC; to Benefit multiplier Hybrid Plan - 1.50% Multiplier 2.00% Multiplier (no max) Normal retirement age 60 Bridged benefit date 12/31/2012 Vesting 6 years Normal retirement age 58 Early retirement (unreduced) 55/25 Vesting 8 years Final average compensation 3 years Early retirement (unreduced) 50/25 Employee contributions 0% Early retirement (reduced) 55/15 Final average compensation 2 years Employee contributions 1.70% Employees Covered by Benefit Terms. At the measurement date of December 31, 2014, the following employees are covered by the benefit terms: _9_9_-_T_ea_m_st_e_rs_Lo_c_a_I _58_0_Z_o_o_H_i_r_ed_P_ri_o_r T_o---'4/'-1-'-/_20_1_3______Closed to new hi res

C-36 Benefit multiplier 2.0% Multiplier (80% max) Normal retirement age 60 Vesting 8 years Inactive plan members or beneficiaries currently Early retirement (reduced) 50/25 or 55/15 receiving benefits 949 Final average compensation 5 years Employee contributions 1.20% Inactive plan members entitled to but not yet 200 HA- County-Wide Elected Officials Hired After 1/1/2013 Open division receiving benefits HC- General Management & Confidentials Hired After 1/1/2013 Open division Active plan members 1049 _H_D_-_F_O_P_9_1_1_N_o_n_-_S_u~p_e_rv_is_o_ry~H_ir_e_d_A_f_te_r_1-'-/~1/_2_0_1_3 ______0~p_e_n_d_i_v_is_io_n ______Benefit multiplier Hybrid Plan -1.00% Multiplier Total emplyees covered by MERS 2198 Normal retirement age 60 Vesting 6yea~ Final average compensation 3 years Contributions. Article 9, Section 24 of the State of Michigan constitution requires that financial Employee contributions 0% benefits arising on account of employee service rendered each year be funded during the year. Accordingly, MERS retains an independent actuary to determine the annual contribution. The employer is required to contribute amounts at least equal to the actuarially determined rate, as established by the MERS Retirement Board. The actuarially determine rate is the estimated amount necessary to finance the costs of benefits earned by the plan members during the year, with an additional amount to finance any unfunded accrued liability. The employer may establish contribution rates to be paid by its covered employees.

For the year ended December 31, 2014, the average active employee contribution rate was 7.44% percent of annual pay and the County's average contribution was 15.82% of annual payroll.

Payable to the pension plan. At December 31, 2014, the County reported a payable of $1,247,439 for the employee ($371,468} and employer {$875,971} outstanding December contributions to the Plan required for the year ended December 31, 2014.

80 81 Net pension liability. The net pension liability reported at December 31, 2015 was determined Amounts reported as deferred outflows of resources related to pension will be recognized in using a measure of the total pension liability and the pension net position as of December 31, 2014. pension expense as follows. These amounts are exclusive of the employer contributions to the plan The December 31, 2014 total pension liability was determined be an actuarial valuation performed made subsequent to the measurement date ($9,769,262), which will impact the net pension as of that date. liability in 2016, rather than pension expense.

Changes in the net pension liability during the measurement year were as follows: Year Ended

Total Pension Plan Net Net Pension 2016 $ 701,354 Liability Position Liability 2017 701,354 2018 701,354 Balance at January 1, 2014 $ (324,839,532) $ 219,580, 781 $ (105,258, 751) 2019 701,352

Changes for the year Total $ 2,805,414 Service cost (7,136,627) (7,136,627) Interest (26, 779,006) (26, 779,006) Actuarial assumptions. The total pension liability in the December 31, 2014 actuarial valuation was Benefits Paid During 2014 19,584,813 (19,584,813) determined using the following actuarial assumptions, applied to all periods included in the Contributions employer 9,150,069 9,150,069 measurement: Contributions employees 4, 745,485 4, 745,485 Net Investment earnings 13,811,858 13,811,858 Inflation 3%-4% Administrative expenses (506,668) (506,668) Salary increases 4.5% In the long term, 1 percent, 2 percent, 3 percent for calendar years 2014, 2015 and 2016, respectively, including inflation C-37 Balance at December 31, 2014 $ (339,170,352) $ 227, 196, 712 $ (111,973,640) Investment rate of return 8.25% Gross pension plan investment expense, including inflation

Pension expense and deferred outflows of resources related to pensions. For the year ended Mortality rates were based on the 1994 Group Annuity Mortality Table of a 50 percent male and 50 December 31, 2015, the County recognized pension expense of $13,059,545. At December 31, percent female blend. For disabled retirees, the regular mortality table is used with a 10-year set 2015, the County reported deferred outflows of resources related to pension from the following forward in ages to reflect the higher expected mortality rates of disabled members. sources: The actuarial assumptions used in the December 31, 2014 valuation were based on the results of the most recent actuarial experience study in 2008. The MERS retirement board is currently conducting an actuarial experience study covering the period from January 1, 2009 - December 31, Net difference between projected and actual 2013. earnings on the pension plan $ 2,805,414 Discount rate. The discount rate used to measure the total pension liability is 8.25%. The Employer Contrbutions to the plan subsequent to projected cash flows used to determine the discount rate assumes that employee contributions will the measurement date 9, 769,262 be made at rates equal to the difference between actuarially determined contribution rates and the employee rate. Total $ 12,574,676 Projected cash flows. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. 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.

82 83 The long-term expected rate of return on pension plan investments was determined using a model Benefits Provided. The plan provides certain retirement, disability and death benefits to plan in which best-estimate ranges of expected future real rates of return (expected returns, net of members and beneficiaries. PA 427 of 1984, as amended, established and amends the benefit pension plan investment expense and inflation) are developed for each major asset class. These provisions of the participants in MERS. 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. 07- Hourly/AFSCME Closed to new hires The target allocation and best estimates of arithmetic real rates of return as of December 31, 2014, 70- Administrative Salaried Closed to new hires the measurement date, for each major asset class are summarized in the following table: 71-Administrative/Union/OPEIU Closed to new hires _7_3-_D_e_._p_ar_tm_en_t_H_e_a_ds______Closed to new hires Benefit multiplier 2.50% Multiplier (80% max) Long- Normal retirement age 60 term Vesting 8 years Early retirement (unreduced) 55/20 Target Expected Early retirement (reduced) 50/25 or 55/15 Allocation Real Rate Final average compensation 3 years Asset Class % of Return Employee contributions 1.20%

74- AFSCME Hired After 9/19/2011 Closed to new hires Global equity 58% 5.0% 75- Administrative/OPEi U Professionals Hired After 7/1/2011 Closed to new hires Global fixed income 20% 2.2% 76- OPEIU Supervisory/Administrative Salary Hired After 7/1/2011 Closed to new hires Benefit multiplier 1.50% Multiplier (no max) Real assets 12% 4.2% Normal retirement age 60 Diversifying strategies 10% 6.6% Vesting 10 years Early retirement (reduced) 50/25 or 55/15 Sensitivity of the net pension liability to changes in the discount rate. The following presents the Final average compensation 5 years Employee contributions 1.20% net pension liability of the County, calculated using the discount rate of 8.25%, as well as what the

County's net pension liability would be if it were calculated using a discount rate that is 1 _H_Q~-_A_FS_C_M_E_H_ir_e_d_A_ft_e_rl~/~1/_2_01_4___ ~------~-0~p_e_n_d_iv_is_io_n _____ ~--~~~-~-~-~ Benefit multiplier Hybrid Plan -1.25% Multiplier

C-38 percentage point lower (7.25%) or one percentage point higher (9.25%) than the current rate Normal retirement age 60 Current Discount Rate Vesting 6 years Final average compensation 3 years 1 % Decrease (7.25%) (8.25%) 1 % Increase (9.25%) Employee contributions 0%

$ 148, 773, 705 $ 111,973,604 $ 80,802,582 Employees Covered by Benefit Terms. At the measurement date of December 31, 2014, the following employees are covered by the benefit terms: Pension plan fiduciary net position - Detailed information about the Plan's fiduciary net position is available in the separately issued financial report found at www.mersofmichigan.com. The Plan's fiduciary net position has been determined on the same basis used by the Plan. The Plan uses the Inactive plan members or beneficiaries economic resources measurement focus and the full accrual basis of accounting. Investments are currently receiving benefits 119 stated at fair value. Contribution revenue is recorded as contributions are due, pursuant to legal requirements. Benefit payments and refunds of employee contributions are recognized as expense Inactive plan members entitled to but when due and payable in accordance with the benefit terms. not yet receiving benefits 15 Active plan members 68

Note 13 - Pension Plans - Department of Road Employees Total emplyees covered by MERS 202

Plan Description. The Road Department's defined benefit pension plan provides certain retirement, Contributions. Article 9, Section 24 of the State of Michigan constitution requires that financial disability and death benefits to plan members and beneficiaries. The Road employees participates benefits arising on account of employee service rendered each year be funded during the year. in the Municipal Employees Retirement System of Michigan (MERS), an agent multiple-employer Accordingly, MERS retains an independent actuary to determine the annual contribution. The plan administered by the Retirement Board of MERS. Act No. 427 of the Public Acts of 1984, as employer is required to contribute amounts at least equal to the actuarially determined rate, as amended, establishes and amends the benefit provisions of the participants in MERS. The established by the MERS Retirement Board. The actuarially determine rate is the estimated Municipal Employees Retirement System of Michigan issues a publicly available financial report amount necessary to finance the costs of benefits earned by the plan members during the year, that includes financial statements and required supplementary information for MERS. That report with an additional amount to finance any unfunded accrued liability. The employer may establish may be obtained by writing to the MERS at 1134 Municipal Way, Lansing, Michigan 48917 or by contribution rates to be paid by its covered employees. calling (800) 767-6377.

84 85 For the year ended December 31, 2014, the average active employee contribution rate was 1.08% Amounts reported as deferred outflows of resources related to pension will be recognized in percent of annual pay and the Department's average contribution was 31.33% of annual payroll. pension expense as follows. These amounts are exclusive of the employer contributions to the plan made subsequent to the measurement date ($1,194,992), which will impact the net pension Payable to the pension plan. At December 31, 2014, the Department reported a payable of liability in 2016, rather than pension expense. $104,102 outstanding December contributions to the Plan required for the year ended December 31, 2014. Year Ended

Net pension liability. The net pension liability reported at December 31, 2015 was determined 2016 $ 64,494 using a measure of the total pension liability and the pension net position of the December 31, 2017 64,494 2014. The December 31, 2014 total pension liability was determined be an actuarial valuation 2018 64,494 performed as of that date. 2019 64,493 Changes in the net pension liability during the measurement year were as follows: Total $ 257,975

Total Pension Plan Net Net Pension Actuarial assumptions. The total pension liability in the December 31, 2014 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the Lia bi I ity Position Liability measurement:

Balance at January 1, 2014 $ (35,592,307) $ 20,758,327 $ (14,833,980) Inflation 3%-4%

Changes for the year Salary increases 4.5% In the long term, 1 percent, 2 percent, 3 percent for calendar Service cost (429,777) (429,777) years 2014, 2015 and 2016, respectively, including inflation Interest (2,915, 710) ( 2, 915, 710) Investment rate of return 8.25% Gross pension plan investment expense, including inflation C-39 Benefits Paid During 2014 2,579,667 (2,579,667) Contributions employer 1,207,872 1,207,872 Mortality rates were based on the 1994 Group Annuity Mortality Table of a 50 percent male and 50 percent female blend. For disabled retirees, the regular mortality table is used with a 10-year set Contributions employees 41,464 41,464 forward in ages to reflect the higher expected mortality rates of disabled members. Net Investment earnings 1,283,110 1,283,110 Administrative expenses (46,849) (46,849) The actuarial assumptions used in the December 31, 2014 valuation were based on the results of the most recent actuarial experience study in 2008. The MERS retirement board is currently Balance at December 31, 2014 $ {36,358,127) $ 20,664,257 $ (15,693,870) conducting an actuarial experience study covering the period from January 1, 2009 - December 31, 2013. These amounts are included in the County's government-wide financial statement as detailed in note 15. Discount rate. The discount rate used to measure the total pension liability is 8.25%. The projected cash flows used to determine the discount rate assumes that employee contributions will Pension expense and deferred outflows of resources related to pensions. For the year ended be made at rates equal to the difference between actuarially determined contribution rates and the December 31, 2015, the department recognized pension expense of $1,809,787. At December 31, employee rate. 2015, the Department reported deferred outflows of resources related to pension from the following sources: Projected cash flows. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and Net difference between projected and actual inactive employees. Therefore, the long-term expected rate of return on pension plan investments earnings on the pension plan $ 257,975 was applied to all periods of projected benefit payments to determine the total pension liability.

Employer Contrbutions to the plan subsequent The long-term expected rate of return on pension plan investments was determined using a model to the measurement date 1,194,992 in 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 Total $ 1,452,967 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.

86 87 The target allocation and best estimates of arithmetic real rates of return as of December 31, 2014, Inactive plan members or beneficiaries currently the measurement date, for each major asset class are summarized in the following table: receiving benefits 133 Inactive plan members entitled to but not yet Long- receiving benefits 61 term Active plan members 246 Target Expected Allocation Real Rate Total emplyees covered by MERS 440 Asset Class % of Return

Global equity 58% 5.0% Benefits Provided. The Pension Plan provides retirement, disability, and death benefits to plan Global fixed income 20% 2.2% members and beneficiaries. Real assets 12% 4.2% Diversifying strategies 10% 6.6% The MERS plan covers all employees of the Facility.

Retirement benefits for employees are calculated ranging from 1.20 percent to 1.70 percent of the Sensitivity of the net pension liability to changes in the discount rate. The following presents the employee's final three- or five-year average salary times the employee's years of service. Normal net pension liability of the Department, calculated using the discount rate of 8.25%, as well as what retirement age is 60. Early retirement with reduced benefits can be achieved with an age of 50 and the department's net pension liability would be if it were calculated using a discount rate that is 1 25 years of service or an age of 55 and 15 years of service. The vesting period is 6 to 10 years. percentage point lower (7.25%) or one percentage point higher (9.25%) than the current rate Current Discount Rate Employees are eligible for non-duty disability benefits after 6 to 10 years of service, and for duty 1 % Decrease (7.25%) (8.25%) 1 % Increase (9.25%) related disability benefits upon hire. Disability retirement benefits are determined in the same manner as retirement benefits but are payable immediately without an actuarial reduction. Death $ 19,298,920 $ 15,693,870 $ 12,596,649 benefits equal 85 percent of the deceased member's retirement allowance, except that the amount C-40 shall not be less than the amount that would be paid if the spouse had been named the survivor Pension plan fiduciary net position - Detailed information about the Plan's fiduciary net position is beneficiary of the deceased member. An employee who leaves service may withdraw his or her available in the separately issued financial report found at www.mersofmichigan.com. The Plan's contributions, plus any accumulated interest. fiduciary net position has been determined on the same basis used by the Plan. The Plan uses the economic resources measurement focus and the full accrual basis of accounting. Investments are Contributions. Article 9, Section 24 of the State of Michigan constitution requires that financial stated at fair value. Contribution revenue is recorded as contributions are due, pursuant to legal benefits arising on account of employee service rendered in each year be funded during that year. requirements. Benefit payments and refunds of employee contributions are recognized as expense Accordingly, MERS retains an independent actuary to determine the annual contribution. The when due and payable in accordance with the benefit terms. employer is required to contribute amounts at least equal to the actuarially determined rate, as established by the MERS retirement board. The actuarially determined rate is the estimated Note 14 - Pension Plans - Medical Care Facility 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. Plan Description. The Facility participates in the Michigan Municipal Employees' Retirement System (MERS), an agent multiple-employer defined benefit pension plan that covers all employees of the The employer may establish contribution rates to be paid by its covered employees. For the year Facility through Ingham County. The Facility provides retirement, disability, and death benefits to ended December 31, 2015, the average active employee contribution rate was 2.33 percent of annual pay and the Facility's average contribution rate was 1.66 percent of annual payroll. plan members and their beneficiaries. MERS issues a publicly available financial report that includes financial statements and required supplemental information for MERS. That report may be The Facility has chosen to use December 31, 2014 as its measurement date for the net pension obtained by writing to the system at 1134 Municipal Way, Lansing, Ml 48917. benefit. The December 31, 2015 reported net pension benefit was determined using a measure of the total pension benefit and the pension net position as of December 31, 2014. The December 31, Employees Covered by Benefit Terms. As of December 31, 2015, the following employees were covered by the benefit terms: 2014 total pension benefit was determined by an actuarial valuation performed as of that date.

88 89 Changes in the net pension benefit during the measurement year were as follows: Actuarial assumptions. The total pension liability in the December 31, 2014 actuarial valuation was Total Pension determined using the following actuarial assumptions, applied to all periods included in the Liability Plan Net Position Net Pension Asset measurement:

Balance at January 1, 2014 $ (19,834,200) $ 22,686,319 $ 2,852,119 Inflation 3%-4%

Salary increases 4.5% In the long term, 1 percent, 2 percent, 3 percent for calendar Changes for the year years 2014, 2015 and 2016, respectively, including inflation Service cost (773, 729) (773,729) Investment rate of return 8.25% Gross pension plan investment expense, including inflation Interest {l,626,835) (1,626,835) Benefits Paid During 2014 1,003, 703 ( 1,003, 703) Mortality rates were based on the 1994 Group Annuity Mortality Table of a 50 percent male and 50 Contributions employer 218,365 218,365 percent female blend. For disabled retirees, the regular mortality table is used with a 10-year set Contributions employees 307,179 307,179 forward in ages to reflect the higher expected mortality rates of disabled members. Net Investment earnings 1,416,580 1,416,580 The actuarial assumptions used in the December 31, 2014 valuation were based on the results of Administrative expenses (52,619) (52,619) the most recent actuarial experience study in 2008. The MERS retirement board is currently conducting an actuarial experience study covering the period from January 1, 2009 - December 31, Balance at December 31, 2014 {21,231,061) $ 23,572,121 $ 2,341,060 $ 2013.

Pension Expense and Deferred Outflows of Resources. For the year ended December 31, 2015, the Discount rate. The discount rate used to measure the total pension liability is 8.25%. The Facility recognized pension expense of $424,466. At December 31, 2015, the Facility reported projected cash flows used to determine the discount rate assumes that employee contributions will deferred outflows of resources related to pensions from the following sources: be made at rates equal to the difference between actuarially determined contribution rates and the employee rate. C-41

Projected Cash Flows. Based on those assumptions, the pension plan's fiduciary net position was Net difference between projected and projected to be available to make all projected future benefit payments of current active and actual earnings on the pension plan $ 288,543 inactive employees. 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. Employer Contrbutions to the plan subsequent to the measurement date 2,555,540 The long-term expected rate of return on pension plan investments was determined using a model in which best estimate ranges of expected future real rates of return (expected returns, net of Total $ 2,844,083 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 by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return as of December Amounts reported as deferred outflows of resources related to pensions will be recognized in 31, 2014, the measurement date, for each major asset class are summarized in the following table: pension expense as follows. These amounts are exclusive of the employer contributions to the plan made subsequent to the measurement date of $2,555,540, which will impact the net pension Long- liability in fiscal year 2016, rather than pension expense. term Target Expected Year Ended Allocation Real Rate Asset Class % of Return 2016 $ 72,136 2017 72,136 Global equity 58% 5.0% 2018 72,136 Global fixed income 20% 2.2% 2019 72,135 Real assets 12% 4.2% Diversifying strategies 10% 6.6% Total $ 288,543

90 91 Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the Note 15 - Pension Plan Allocation net pension liability (asset) of the Facility, calculated using the discount rate of 8.25 percent, as well as what the Facility's net pension liability (asset) would be if it were calculated using a discount rate The reconciliation of all pension activity is as follows: that is 1 percentage point lower (7.25 percent) or 1 percentage point higher (9.25 percent) than the current rate: Governmental Primary Component Activities Business Type Government Units Total Current Discount Rate Net pension liability (asset) 125, 708,869 (1,556,424) 124, 152,445 1 % Decrease (7.25%) (8.25%) 1 % Increase (9.25%) 1,174,005 125,326,450

Pension expense 14,640,897 515,977 15,156,874 136,924 15,293,798 $ 279,452 $ (2,341,060) $ (4,541,794) Deferred outflows of resources representing contributions subsequent to the measurement date 13, 799,462 2,929,670 16,729,132 142,594 16,871,726 Pension Plan Fiduciary Net Position. Detailed information about the Plan's fiduciary net position is available in the separately issued financial report. For the purpose of measuring the net pension Deferred outflows of resources representing liability, deferred outflows of resources, and deferred inflows or resources related to pension and the net difference between projected and actual earnings on pension plan investments 3,014,317 308,201 3,322,518 29,414 3,351,932 pension expense, information about the Plan's fiduciary net position and addition to/deduction from fiduciary net position have been determined on the same basis as they are report by the Plan. Amortization of deferred amounts: The Plan uses the economic resources measurement focus and the full accrual basis of accounting. 2016 753,579 77,050 830,630 7,354 837,983 Investments are stated at fair value. Contribution revenue is recorded as contributions are due, 2017 753,579 77,050 830,630 7,354 837,983 2018 753,579 77,050 830,630 7,354 837,983 pursuant to legal requirements. Benefit payments and refunds of employee contributions are 2019 753,579 77,050 830,630 7,354 837,983 recognized as expense when due and payable in accordance with the benefit terms. Total 3,014,317 308,201 3,322,518 29,414 3,351,932

Sensitivity analysis: Net pension liability at 7.25 percent discount rate 165,467, 632 1,323,018 166, 790, 650 1,561,427 168,352,077 C-42 Net pension liability (asset) at 9.25 percentdiscount rate 91,985,876 (3,975,601) 88,010,275 847,162 88,857,437

Footnote 12 Footnote 13 Footnote 14 Total

Net pension liability $ 111,973,640 $ 15,693,870 $ (2,341,060) $ 125,326,450

Pension expense 13,059,545 1,809,787 424,466 15,293,798

Deferred outflows of resources representing contributions subsequent to the measurement date 12,574,676 1,452,967 2,844,083 16,871,726

Deferred inflows of resources representing the net difference between projected and actual earnings on pension plan investments 2,805,414 257,975 288,543 3,351,932

Amortization of deferred amounts: 2016 701,354 64,494 72,136 837,984 2017 701,354 64,494 72,136 837,984 2018 701,354 64,494 72,136 837,984 2019 701,352 64,493 72,135 837,980 Total 2,805,414 257,975 288,543 3,351,932

Net pension liability at 7.25 percent discount rate 148, 773, 705 19,298,920 279,452 168,352,077 Net pension liability (asset) at 9.25 percent discount rate 80,802,582 12,596,649 (4,541, 794) 88,857,437

92 93 Note 16 - Defined Contribution Pension Plan Annual OPEB Cost and Net OPEB Obligation. For 2015, the components of the County's annual OPEB (other postemployment benefit) cost for the year, the amount actually contributed to the In the labor agreements ratified since 2013, it was agreed that all new hires would be eligible for a Plan, and changes in the County's net OPEB obligation to the Plan were as follows: hybrid defined benefit-defined contribution plan. The start date of this plan varies by bargaining unit. Annual required contribution $ 6,957,538 Interest on net OPEB obligation 1,963,009 The employer and employees contribution rate ranges from 1.0% to 2.5% of salaries for the defined Adjustment to annual required contribution (1,731,965) contribution portion of the plan. The defined benefit portion ranges from a multiplier of 1.0 to 1.5. The cost of the defined benefit plan is paid exclusively by the County. The employees can elect to Net OPEB cost 7,188,582 contribute an additional amount to the defined contribution plan on an after tax basis. Contributions made (4,984,556)

There has not been a full plan wide actuarial calculation performed on the defined benefit plan Increase in net OPEB obligation 2,204,026 since many of the employee group's contracts were ratified in 2014 and the most recent actuarial Net OPEB obligation, beginning of year 32, 716,821 review was calculated as of 12/31/14 so it does not include a full year of experience. Net OPES obligation, end of year $ 34,920,847 The County's contribution to the defined contribution plan during 2015 totaled $185,378. The contribution to the defined benefit plan was $650,893 which is included in the numbers reported in notes 12 and 13. The County's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation as of December 31, 2015, and the two preceding years, were as follows: Note 17 - Postemployment Benefits Other than Pensions

Three-YearTrend Information Primary Government (excluding Transportation and Roads Department and Medical Care Facility) Percentage of Plan Description. The Ingham County Retiree Health Care Plan (the Plan) is a single-employer C-43 Annual OPES defined benefit healthcare plan administered by the Retiree Health Care Board (the Board). The Annual OPES Cost Net OPEB Plan was adopted and established by the Ingham County Board of Commissioners. The Plan provides postemployment healthcare and life insurance benefits to eligible retirees of the primary Year Ended Cost Contributed Obligation government in accordance with the various labor contracts a·nd personnel policies. At December 2013 $ 6,856,669 49.84% $ 29, 747,566 31, 2015, 657 retired employees were eligible to participate, of which 469 participated. The assets 2014 7,109,968 58.24% 32, 716,821 of the Plan are reported as an other employee benefits trust fund in the accompanying financial 2015 7,188,582 69.34% 34,920,847 statements; a separate, stand-alone report is not issued. Funded Status and Funding Progress. As of December 31, 2014, the date of the most recent Funding Policy. The contribution requirements of plan members and the County are established actuarial valuation, the Plan was 8.5 percent funded. The actuarial accrued liability for benefits was and may be amended by the County Board of Commissioners, subject to applicable labor contracts. $91,119,729, and the actuarial value of assets was $7,729,468, resulting in an unfunded actuarial Retiree plan members receiving healthcare benefits pay for half of the health care insurance accrued liability (UAAL) of $83,390,261. The covered payroll (annual payroll of the active employees premium over an annually established level (which was approximately $387 per month for 2015) covered by the Plan) was $57,516,000 and the ratio of the UAAL to the covered payroll was 144.9 and for 100% of the additional premium cost for spousal and dependent coverage. percent.

The County may contribute the annual required contribution (ARC), an amount actuarially The schedule of funding progress, presented as required supplementary information following the determined in accordance with the parameters of GASB Statement 45, Accounting and Financial notes to the financial statements, presents multiyear trend information about whether the Reporting by Employers for Postemployment Benefits Other Than Pensions. The ARC represents a actuarial values of plan assets are increasing or decreasing over time relative to the actuarial level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year accrued liabilities for benefits. and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The schedule of employer contributions, presented as required supplementary information, presents trend information about the amounts contributed to the plan by employers in comparison with the ARC, an amount that is actuarially determined in accordance with the parameters of GASB Statement 43. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost for each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.

94 95 Actuarial Methods and Assumptions. Actuarial valuations of an ongoing plan involve estimates of Annual required contribution $ 801,299 the value of reported amounts and assumptions about the probability of potential occurrences of Interest on net OPEB obligation 112,802 certain events in the future. Examples include assumptions about future employment, mortality, Adjustment to annual required contribution (112,802) healthcare costs trends, inflation, etc. Amounts determined regarding the funded status of the plan Net OPEB cost 801,299 and the annual required contributions of the County are subject to constant changes and modifications as actual results are compared with past expectations and new estimates and Contributions made (225,441) assumptions are formed regarding the future. Projections of retiree benefits for financial reporting Increase in net OPEB obligation 575,858 purposes are based on current plan activities as it is handled by the County and the benefits are Net OPEB obligation, beginning of year 2,820,040 received by the eligible plan members and include the types of benefits provided at the time of Net OPEB obligation, end of year $ 3,395,898 each valuation and the historical pattern of sharing of benefit costs between the County and plan members. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The Facility's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the last three years were as follows: In the December 31, 2015, actuarial valuation, the individual entry age normal actuarial cost method was used. The actuarial assumptions include a 6.0% a year rate of investment return, Three-Year Trend Information compounded annually net after investment expense, which is the expected long-term investment Percentage of return on plan assets, and a base payroll growth rate of 4.0%. There were also merit and seniority Annual OPEB salary rate increase assumptions taken into consideration and those are detailed in the actuarial Annual OPEB Cost Net OPEB study and are based on age. There are no assumed inflationary adjustments. Per the actuarial study, the assumed rate ranges from 9.0% in the short-term to 4.0% in the long-term for health Year Ended Cost Contributed Obli~ation care related costs. The UAAL is being amortized as a level percentage of active member payroll over 2013 $ 597,050 36.00% $ 2,455,365 a period of 24 years on a closed basis. 2014 596,616 39.00% 2,820,040

C-44 2015 801,299 28.00% 3,395,898

Medical Care Facility Funded Status and Funding Progress. As of December 31, 2014, the date of the most recent Facility employees participate in a single employer defined benefit healthcare plan. The Plan actuarial valuation, the Plan was 0 percent funded. The actuarial accrued liability for benefits was provides postemployment healthcare and life insurance benefits to eligible retirees in accordance $7,778,271, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued with labor contracts and personnel policies. The plan is closed to new participants with hire dates liability (UAAL) of $7,778,271. The covered payroll (annual payroll of the active employees covered subsequent to January 1, 2013. by the Plan) was $10,299,132 and the ratio of the UAAL to the covered payroll was 75.5 percent.

Funding Policy. The contribution requirements of plan members and the Facility are established and The schedule of funding progress, presented as required supplementary information following the may be amended by the Department of Human Services Board, subject to applicable labor notes to the financial statements, present multiyear trend information about whether the actuarial contracts. Plan members are not required to contribute; however, plan members receiving values of plan assets are increasing or decreasing over time relative to the actuarial accrued healthcare benefits pay for about 40% of the health care insurance premium over an annually liabilities for benefits. established level (which was approximately $28 per month for 2015) and for 100% of the additional premium cost for spousal and dependent coverage. The accompanying schedule of employer contributions present trend information about the amounts contributed to the plan by employers in comparison with the ARC, an amount that is The Facility may contribute the annual required contribution (ARC) , an amount actuarially actuarially determined in accordance with the parameters of GASB Statement 43. The ARC determined in accordance with the parameters of GASB Statement 45, Accounting and Financial represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost for Reporting by Employers for Postemployment Benefits Other Than Pensions. The ARC represents a each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year exceed 30 years. and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. Actuarial Methods and Assumptions. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of potential occurrences of Annual OPEB Cost and Net OPEB Obligation. For 2014, the components of the Facility's annual certain events in the future. Examples include assumption about future employment, mortality, OPEB (other postemployment benefit} cost for the year, the amount actually contributed to the healthcare costs trends, inflation, etc. Amounts determined regarding the funded status of the plan Plan, and changes in the Facility's net OPEB obligation to the Plan are as follows: and the annual required contributions of the Facility are subject to constant changes and modifications as actual results are compared with past expectations and new estimates and assumptions are formed regarding the future. Projection:; of retiree benefits for financial reporting

96 97 purposes are based on current plan activities as it is handled by the Facility and the benefits are The annual OPEB costs, the amount contributed to the plan, and the net OPEB obligation for the received by the eligible plan members and include the types of benefits provided at the time of year ended December 31, 2015, were as follows: each valuation and the historical pattern of sharing of benefit costs between the Facility and plan members. Annual required contribution $ 880,976 Interest on net OPEB obligation 175,315 The actuarial methods and assumptions used include techniques that are designed to reduce the Adjustment to annual required contribution (162,329) effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, Net OPEB cost 893,962 consistent with the long-term perspective of the calculations. Contributions made (475,004)

In the December 31, 2014, actuarial valuation, the individual entry age normal actuarial cost Increase in net OPEB obligation 418,958 Net OPEB obligation, beginning of year 3,895,891 method was used. The actuarial assumptions include a 4.0% a year rate of investment return, compounded annually net after investment expense, which is the expected long-term investment Net OPEB obligation, end of year $ 4,314,849 return on plan assets, and a base payroll growth rate of 4.0%. There were also merit and seniority salary rate increase assumptions taken into consideration and those are detailed in the actuarial study and are based on age, along with an inflationary rate assumption factored into the The Transportation and Road Department's annual OPEB cost, the percentage of annual OPEB cost calculation. Per the actuarial study, the assumed rate ranges from 7.5% in the short-term to 4.0% in contributed to the Plan, and the net OPEB obligation as of December 31, 2015, and the two the long-term for health care related costs. The UAAL is being amortized as a level percentage of preceding years, were as follows: active member payroll over a period of 24 years on an open basis. Three-Year Trend Information Transportation and Roads Department Percentage of In June 2012, the County merged with the Ingham County Road C_ommission. The Road Annual OPEB Commission was dissolved and the Department of Transportation and Road was established. The Annual OPEB Cost NetOPEB

C-45 actuary valuations as of December 31, 2012 and 2014 were performed under the same Year Ended Cost Contributed Obligation assumptions as the County's plan. These assumptions may differ from the past actuarial reports performed for the prior Road Commission. 2013 $ 802,002 68.13% $ 3,430,632 2014 829,125 43.89% 3,895,891 Plan Description. The Transportation and Roads Department provides certain retiree health care 2015 893,962 53.14% 4,314,849 benefits and life insurance benefits to all applicable employees, in accordance with union agreements and/or personnel policies. In 2008, the Transportation and Roads Department offered the retirees a choice between two plans. One plan was a PPO and the other plan was a HMO, both Funded status and funding progress. As of December 31, 2014, the date of the most recent actuarial are health programs that pay for claims (less deductible and co-pay) in accordance with the group valuation, the Plan was 0 percent funded. The actuarial accrued liability for benefits was $13,583,867 and from which the employee retired. The Transportation and Roads Department pays for 100% of the the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of health portion of the insurance while the retiree pays for the prescription portion of the premium. $13,583,867. The covered payroll (annual payroll of the active employees covered by the Plan} was At 12/31/15, 74 retirees meet plan eligibility requirements and 49 were participating. $3,819,303 and the ratio of the UAAL to the covered payroll was 355.7 percent.

Funding Policy. The Transportation and Road Department has no obligation to make contributions Actuarial Methods and Assumptions. Actuarial valuations of an ongoing plan involve estimates of the in advance of when the insurance premiums are due for payment (i.e., may be financed on a "pay value of reported amounts and assumptions about the probability of potential occurrences of certain as-you-go" basis). Administrative costs of the plan are paid for by the Transportation and Road events in the future. Examples include assumption about future employment, mortality, healthcare costs Department. trends, inflation, etc. Amounts determined regarding the funded status of the plan and the annual required contributions of the Transportation and Road Department are subject to constant changes and Funding Progress. For the year ended December 31, 2015, the Transportation and Roads modifications as actual results are compared with past expectations and new estimates and assumptions Department has determined an estimated cost of providing retiree post-employment benefits are formed regarding the future. Projections of retiree benefits for financial reporting purposes are based through an actuarial valuation as of December 31, 2014. The valuation computes an annual on current plan activities as it is handled by the Commission and the benefits are received by the eligible required contribution, which represents a level of funding that, if paid on an ongoing basis, is plan members and include the types of benefits provided at the time of each valuation and the historical projected to cover normal cost each year and to cover the amortization of any unfunded actuarial pattern of sharing of benefit costs between the Transportation and Road Department and plan members. liabilities from the past, over a period not to exceed thirty years. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

98 99 In the December 31, 2014, actuarial valuation, the individual entry age normal actuarial cost method was and recognized over future years. Refer to the pension footnote note for further details. This change does used. The actuarial assumptions include a 4.0% a year rate of investment return, compounded annually not impact the General Fund or any other governmental funds. net after investment expense, which is the expected long-term investment returns on plan assets, and a base payroll growth rate of 4.0%. There were also merit and seniority salary rate increase assumptions The financial statements for the year ended December 31, 2014 have been restated in order to adopt GASB taken into consideration and those are detailed in the actuarial study and are based on age. There was 68 and 71. The effect of this new accounting standing was a decrease in net position to record the net also an inflationary rate assumption factored into the calculation. Per the actuarial study the assumed pension liability and resulting deferred outflow at December 31, 2014. rate ranges from 9.0% in the short-term to 4.0% in the long-term for health care related costs. The UAAL is being amortized as a level percentage of active member payroll over a period of 24 years on an closed As a result of implementing this statement, the beginning net position of the governmental activities, basis. business type funds and component units have been restated as indicated:

Housing Non Major Internal Drain Commission Note 18 - Fund Balances Governmental Medical Care Delinquent Enterprise Service Component Component Activities Facility Tax Funds Funds Unit Unit The following is a summary of the composition of fund balances as of December 31, 2015: Net Position - December 31, 2014-As previously stated $ 173,149,303 31,956,902 $ 9,943,534 $ 3,649,660 $ 9,014,448 $51,783,042 $ 1,829,462 Adjustment for implementation of GASB 68 (108,053,657) (1,927,623) (313,058) (360,410) (2,569,727) (767,833) (247,853) Emergency County Other Total Net Position - December 31, 2014- As restated $ 65,095,646 $ 30,029,279 $ 9,630,476 $ 3,289,250 $ 6,444,721 $51,015,209 $ 1,581,609 General Road Health Telephone Transportation Health Service Governmental Governmental Fund Fund Fund Fund System Juvenile Justice Millage Funds Funds Nonspendable Prepaid items 29,419 12,493 23,431 856 194,545 260,744 The Land Bank component unit's net position as of January 1, 2015 has been restated to correct Inventories 1,144,235 216,316 1,360,551 misstatements for the incorrect accounting treatment associated with the recording of inventory in Long-term advances 1,168,779 1,168, 779 Total nonspendable 1,198,198 1,156, 728 239, 747 856 194,545 2, 790,074 previously issued financial statements. The misstatements were the result of a failure to record revenue Restricted and inventory when receiving donated properties. The effect of the correction on the statement of net General government 142,934 142,934 Public health services 768,827 768,827 position was to increase unrestricted net position and increase inventory by $161,276. The restatement Public safety 3,068,200 443,079 3,511,279 had no effect on the statement of revenue, expenses, and changes in net position and the statement of Public works 5,645,192 1,177,110 6,822,302 C-46 Culture and recreation 3,557, 721 3,557, 721 cash flows. Welfare 2,169,620 638,876 270,530 3,079,026 Education 33,386 33,386 Economic development 4,038,252 4,038,252 Debt service 12,074 12,074 Net Position - December 31, 2014- As previously stated $ 606,019 Total restricted 5,645,192 768,827 3,068,200 1,177,110 2,169,620 638,876 8,497,976 21,965,801 Committed Prior Period Adjustment 161,276 Budget stabilization 10,562,364 10,562,364 Retiree healthcare 3,200,000 3,200,000 Net Position - December 31, 2014- As restated $ 767,295 Public health services 860,000 860,000 Jail medical 945,000 945,000 Debt service 36,344 36,344 Note 20 - Upcoming Accounting Pronouncements Total committed 15,567,364 36,344 15,603,708 Assigned Next year budget 2, 775,818 2, 775,818 In February 2015, the Governmental Accounting Standards Board issued GASB Statement No. 72, Fair Value Unexpended grants 19,709 19, 709 Drain 20,842 20,842 Measurement and Application. The requirements of this Statement will enhance comparability of financial Public improvement 1,930,521 1,930,521 statements among governments by requiring measurement of certain assets and liabilities at fair value Parks operation 233,030 233,030 Total assigned 4,979,920 4,979,920 using a consistent and more detailed definition of fair value and acceptable valuation techniques. This Unassigned 16, 185,987 ( 1,336,422) 14,849,565 Statement also will enhance fair value application guidance and related disclosures in order to provide Total Fund Balance 37,931,469 6,801,920 1,008,574 3,069,056 1,177,110 2,169,620 $ 638,876 $ 7,392,443 $ 60,189,068 information to financial statement users about the impact of fair value measurements on a government's financial position. GASB Statement No. 72 is required to be adopted for years beginning after June 15, The nonspendable fund balance for prepaid items and inventories for the Health Fund was reduced by 2015. The County is currently evaluating the impact this standard will have on the financial statements $179,258 for the portion of the inventory that is included in unearned income. when adopted, during the County's 2016 fiscal year.

Note 19 - Prior Period Adjustment In June 2015, the GASS issued two new standards addressing accounting and financial reporting by state and local governments for postemployment benefits other than pensions (OPES). GASS Statement No. 74, During the current year, the County adopted GASB Statement No 68, Accounting and Financial Reporting Financial Reporting for Postemployment Benefit Plans other than Pension Plans, addresses reporting by for Pensions and GASB Statement No 71, Pension Transition for Contributions made Subsequent to the OPES plans whereas GASS Statement No. 75, Accounting and Financial Reporting for Postemployment Measurement Date -An Amendment of GASB Statement No 68. As a result, the government-wide statements, applicable business type funds and component units now include a liability for the unfunded Benefits Other Than Pensions, addresses accounting and reporting by employer governments that provide legacy costs related to the County's pension plan. Certain changes in the net pension liability will be OPES benefits to their employees. Along with the currently required statement of fiduciary net position recognized immediately as part of the pension expense measurement, and other changes will be deferred and statement of changes in fiduciary net position, OPES plans will now be required to include in the

100 101 financial statement more extensive footnote disclosures and required supplementary information related INGHAM COUNTY, MICHIGAN to the measurement of the OPEB liabilities for which assets have been accumulated. In addition, the Required Supplementary Information

County will, after adoption of GASB 75, recognize on the face of the financial statements its net OPEB Retiree Health Care Plan - County liability. The County is currently evaluating the impact these standards will have on the financial Schedule of Funding Progress statements when adopted. GASB 74 is effective for fiscal years beginning after June 15, 2016 whereas GASB Accrued Unfunded UAALasa 75 is effective one year later. Actuarial Actuarial Value of Liability (Overfunded) Funded Ratio Covered Percentage of Valuation Assets (AAL) AAL (Percent) Payroll Covered Payroll In August 2015, the GASB issued Statement No 77, Tax Abatement Disclosures. This statement will require Date (a) (b) (b-a) (a/b) (c) ((b-1)/c) governments to disclose in their financial statement information related to tax abatements agreements. 12/31/2006 $ $ 91,516,399 $ 91,516,399 $ 49,531,695 184.8% The County is currently evaluating the impact this standard will have on the financial statements when 12/31/2008 79,274,189 79,274,189 51,746,029 153.2% adopted during 2017. 12/31/2010 2,480,058 84,813,721 82,333,663 2.92% 52,756,718 156.1% 12/31/2012 3,913,176 86,934,173 83,020,997 4.50% 55,517,218 149.5% Jn January 2016, the Governmental Accounting Standards Board issued GASB Statement No. 80, Blending 12/31/2014 7,729,468 91,119,729 83,390,261 8.50% 57,516,000 145.0% Requirements for Certain Component Units. The requirements of this Statement enhance the comparability of financial statements among governments by clarifying the financial statement presentation requirements for certain component units. GASB Statement No. 80 is required to be adopted Schedule of Employer Contributions for years beginning after June 15, 2016. The County is currently evaluating the impact this standard will Annual have on the financial statements when adopted during 2017. Year Ended Required Percentage December 31, Contributions Contributed 2011 $ 6,092,233 38.50% 2012 6,366,383 40.90% 2013 6,586,392 51.90% 2014 6,849,848 60.45% C-47 2015 6,957,538 71.64%

Retiree Health Care Plan - Medical Care Facility

Schedule of Funding Progress Actuarial Actuarial Accrued Unfunded UAAL as a Actuarial Value of Liability (Overfunded) Funded Ratio Covered Percentage of Valuation Assets (AAL) AAL (Percent) Payroll Covered Payroll Date (a) (b) (b-a) (a/b) (c) ((b-1)/c) 12/31/2006 $ $ 9,268,458 $ 9,268,458 $ 7,287,609 127.2% 12/31/2008 4,290,944 4,290,944 8,953,011 47.9% 12/31/2010 5,655,037 5,655,037 9,517,974 59.4% 12/31/2012 6,261,514 6,261,514 9,942,346 63.0% 12/31/2014 7, 778,271 7,778,271 10,299,132 75.5%

Schedule of Employer Contributions Annual Year Ended Required Percentage December 31, Contributions Contributed 2011 $ 527,793 37.00% 2012 553,423 40.00% 2013 597,050 36.00% 2014 596,616 39.00% 2015 801,299 28.00%

102 103 INGHAM COUNTY, MICHIGAN Required Supplementary Information INGHAM COUNTY, MICHIGAN Schedule of changes in the net pension liability and related ratios Required Supplementary Information Last Ten Years

Retiree Health Care Plan - Road County Road Medical Care Facility Total Schedule of Funding Progress Total Pension Liability Actuarial Service cost $ 7,136,627 $ 429,777 $ 773,729 $ 8,340,133 UAALasa Actuarial Accrued Unfunded Interest 26,779,006 2,915,710 1,626,835 31,321,551 Actuarial Value of Liability (Overfunded) Funded Ratio Covered Percentage of Benefits payments (including refunds) (19,584,813) (2,579,667) (1,003,703) (23,168,183) Valuation Assets (AAL) AAL (Percent) Payroll Covered Payroll Date (a) (b) (b-a) (a/b) (c) ((b-1)/c) Net Change in Total Pension Liability 14,330,820 765,820 1,396,861 16,493,501 12/31/2006 $ $ 18,970,649 $ 18,970,649 $ 3,341,100 567.8% 13,377,603 13,377,603 4,038,205 331.3% 12/31/2008 Total Pension Liability - Beginning of Year 324,839,532 35,592,307 19,834,200 380,266,039 12/31/2010 13,679,694 13,679,694 3,658,008 374.0% 12/31/2012 12,924,820 12,924,820 3,539,959 365.1% 12/31/2014 13,583,867 13,583,867 3,819,303 355.7% Total Pension Liability - End of Year $ 339, 170,352 $ 36,358,127 $ 21,231,061 $ 396,759,540

Schedule of Employer Contributions Plan Fiduciary Net Position Contribution employer 9,150,069 1,207,872 218,365 10,576,306 Year Ended Annual Required Contribution employee 4,745,485 41,464 307,179 5,094,128 December 31, Contributions 394.00 Net investment income 13,811,858 1,283,110 1,416,580 16,511,548 2011 $ 1,195,280 48.10% Administrative expenses (506,668) (46,849) (52,619) (606,136) 2012 1,227,616 45.20% Benefits payments (including refunds) (19,584,813) (2,579,667) (1,003,703) (23,168,183) 2013 791,575 69.03% 2014 823,238 44.20% Net Change in Plan Fiduciary Net Position 7,615,931 (94,070) 885,802 2015 880,976 53.92% 8,407,663 C-48 Plan Fiduciary Position - Beginning of Year 219,580,781 20, 758,327 22,686,319 263,025,427 Note: The former Ingham County Road Commission was merged with Ingham County on June 1, 2012. The December 31, 2012 actuarial calculation was preformed using the same assumptions as the County's historical calculation which may differ from Plan Fiduciary Position - End of Year 227,196, 712 20,664,257 23,572,121 27l,433,090 assumptions used in previous years by the former Road Commission. Net Pension Liability (Asset) - End of Year $ 111,973,640 $ 15,693,870 $ (2,341,060) $ 125,326,450

Plan Fiduciary Net Position as a Percentage of Total Pension Liability/Asset 66.99% 56.84% 111.03% 68.41%

Covered Payroll 57,516,000 3,819,303 10,299,132 71,634,435

Net Pension Liability (Asset) as a Percentage of Covered Employee Payroll 194.68% 410.91% -22.73% 174.95%

104 105 INGHAM COUNTY, MICHIGAN INGHAM COUNTY, MICHIGAN Required Supplementary Information Required Supplementary Information Schedule of Pension Contributions· County Plan (Including Medical Care Facility, Drain Commission and Housing Commission Component Units) Schedule of Pension Contributions - Department of Roads Last Ten Years Last Ten Years 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Actuarially determined contribution $ 10,104,014 $ 9,794,330 $ 9,245,019 $ 8,526,591 $ 7,454,399 $ 7,251,099 $ 7,075,811 $ 6,592,937 $ 6,418,925 $ 5,352,684 Actuarially determined contribution $ 1,194,992 $ 1,202,695 $ 1,087,593 $ 1,043,288 802,947 778,406 823,566 793,065 785,661 777,373

Contribution in relation to the actuarially Contribution in relation to the actuarially determined contribution 10,104,014 9,794,330 9,245,019 8,526,591 7,454,399 7,251,099 7,075,811 6,592,937 6,418,925 5,352,684 determined contribution 1,194,992 1,202,695 1,087,593 1,043,288 802,947 778,406 823,566 793,065 785,661 777,373

Contribution deficiency Contribution deficiency

Covered employee payroll 4,181,683 3,819,303 3,504,388 3,539,959 3,658,008 3,572, 716 4,217,460 4,349,967 4,403,503 Covered employee payroll 72,321,861 67,756,026 63,848,372 61,619,499 63,117,593 62,274,692 62,872,741 60,699,040 59,000,421 56,819,304 4,436,483

Contribution as a percentage of covered Contribution as a percentage of covered employee payroll 28.58% 31.49% 31.04% 29.47% 21.95% 21.79% 19.53% 18.23% 17.84% 17.52% employee payroll 13.97% 14.46% 14.48% 13.84% 11.81% 11.64% 11.25% 10.86% 10.88% 9.42%

NOTES to Schedule of Pension Contributions NOTES to Schedule of Pension Contributions

Actuarial valuation information relative to the determination of contributions: Actuarial valuation information relative to the determination of contributions:

Valuation date Actuarially determined contribution rates are calculated as of December 31 of the prior year, which is an entire year Valuation date Actuarially determined contribution rates are calculated as of December 31 of the prior year, which is an entire year prior to the beginning of the fiscal year in which the contributions are required. prior to the beginning of the fiscal year in which the contributions are required. Methods and assumptions used to determine contribution rates: Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age Actuarial cost method Entry age Amortization method Level percentage of pay, open Amortization method Level percentage of pay, open Remaining amortization period 26 years Remaining amortization period 26 years Asset valuation method 10-year smoothed Asset valuation method 10-year smoothed Inflation 3.0 to 4.0 percent Inflation 3.0 to 4.0 percent Salary increases 4.5 percent Salary increases 4.5 percent

C-49 Investment rate of return 8.0 percent Investment rate of return 8.0 percent Retirement age 60 years Retirement age 60 years Mortality 50% Male- 50% Female blend of the 1944 Group Annuity Mortality Table Mortality 50% Male 50% Female blend of the 1944 Group Annuity Mortality Table Other information None Other information None

106 107 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX D FORM OF LEGAL OPINION

[THIS PAGE INTENTIONALLY LEFT BLANK] 215 S. W ASHINGTON S QUARE, S UITE 200 L ANSING, MI 48933-1816 T ELEPHONE: (517) 371-1730 F ACSIMILE: (844) 670-6009 http://www.dickinsonwright.com

DW Draft Date: 4/13/17

______, 2017

Ingham County Building Authority Mason, Michigan

Ladies and Gentlemen:

We have acted as bond counsel in connection with the issuance by the Ingham County Building Authority (the "Authority") of $______Building Authority Bonds (Community Mental Health Building), Series 2017 (Limited Tax General Obligation) (the "Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion, including an executed copy of the Full Faith and Credit General Obligation Contract of Lease dated as of May 1, 2017 (the "Contract of Lease"), between the Authority and the County of Ingham (the "County").

As to questions of fact material to our opinion, we have relied upon certified proceedings and other certificates of public officials furnished to us without undertaking to verify the same by independent investigation.

Based upon the foregoing, we are of the opinion, under existing law, as follows:

1. The Bonds are valid and legally binding obligations of the Authority payable from moneys to be paid to the Authority by the County pursuant to the Contract of Lease.

2. The Contract of Lease is valid and binding on the parties thereto, and the limited tax full faith and credit of the County have been pledged for the prompt payment of its obligations pursuant to the Contract of Lease. Taxes imposed by the County for the payment of its obligations pursuant to the Contract of Lease are subject to constitutional and statutory tax limitations.

3. The Bonds and the interest thereon are exempt from taxation by the State of Michigan and by any other taxing authority within the State of Michigan, except estate taxes and taxes on gains realized from the sale, payment or other disposition of the Bonds.

4. The interest on the Bonds (a) is excluded from gross income for federal income tax purposes and (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, it should be

D-1

ARIZONA FLORIDA KENTUCKY MICHIGAN NEVADA OHIO TENNESSEE TEXAS TORONTO WASHINGTON DC D ICKINSON W RIGHT PLLC

Ingham County Building Authority ______, 2017 Page 2

noted, that certain corporations must take into account interest on the Bonds in determining adjusted current earnings for the purpose of computing such alternative minimum tax. The opinion set forth in clause (a) above is subject to the condition that the Authority comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be (or continue to be) excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements could cause the interest on the Bonds to be included in gross income retroactive to the date of issuance of the Bonds. The Authority has covenanted to comply with all such requirements. We express no opinion regarding other federal tax consequences arising with respect to the Bonds and the interest thereon.

We express no opinion herein regarding the accuracy, adequacy, or completeness of the official statement relating to the Bonds.

It is understood that the rights of the holders of the Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement also may be subject to the exercise of judicial discretion in appropriate cases.

This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur.

Respectfully submitted,

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ARIZONA FLORIDA KENTUCKY MICHIGAN NEVADA OHIO TENNESSEE TEXAS TORONTO WASHINGTON DC APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE

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CONTINUING DISCLOSURE CERTIFICATE

COUNTY OF INGHAM

$______

INGHAM COUNTY BUILDING AUTHORITY BUILDING AUTHORITY BONDS (COMMUNITY MENTAL HEALTH BUILDING), SERIES 2017 (LIMITED TAX GENERAL OBLIGATION)

This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the County of Ingham (the "County") in connection with the issuance by the Ingham County Building Authority (the "Issuer") of its Building Authority Bonds (Community Mental Health Building), Series 2017 (Limited Tax General Obligation) (the "Bonds"). The County covenants and agrees as follows:

Section 1. Purpose of the Disclosure Certificate.

(a) This Disclosure Certificate is being executed and delivered by the County on behalf of the County and the Issuer for the benefit of the Bondholders and the Beneficial Owners and in order to assist the Participating Underwriter in complying with subsection (b)(5) of the Rule.

(b) In consideration of the purchase and acceptance of any and all of the Bonds by those who shall hold the same or shall own beneficial ownership interests therein from time to time, this Disclosure Certificate shall be deemed to be and shall constitute a contract between the County and the Bondholders and Beneficial Owners from time to time of the Bonds, and the covenants and agreements herein set forth to be performed on behalf of the County shall be for the benefit of the Bondholders and Beneficial Owners of any and all of the Bonds.

Section 2. Definitions. The following capitalized terms shall have the following meanings:

"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.

"Annual Report" shall mean any Annual Report of the County provided by the County pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.

"Beneficial Owner" shall mean any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including any person holding Bonds through nominees, depositories or other intermediaries).

"Bondholder" shall mean the registered owner of any Bonds.

E-1

"Dissemination Agent" shall mean the County or any successor Dissemination Agent appointed in writing by the County and which has filed with the County a written acceptance of such appointment.

"EMMA" shall mean the Electronic Municipal Market Access system of the MSRB. As of the date of this Disclosure Certificate, the EMMA Internet Web site address is http://www.emma.msrb.org.

"GAAP" shall mean generally accepted accounting principles, as such principles are prescribed, in part, by the Financial Accounting Standards Board and modified by the Governmental Accounting Standards Board and in effect from time to time. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate.

"MSRB" shall mean the Municipal Securities Rulemaking Board established in accordance with the provisions of Section 15B(b)(1) of the 1934 Act. As of the date of this Disclosure Certificate, the address and telephone and telecopy numbers of the MSRB are as follows:

Municipal Securities Rulemaking Board 1300 I Street NW, Suite 1000 Washington, DC 20005 Tel: 202-838-1500 Fax: 202-898-1500

"Official Statement" shall mean the final Official Statement for the Bonds dated ______, 2017.

"Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with the primary offering of the Bonds.

"Rule" shall mean Rule 15c2-12 (17 CFR Part 240, § 240.15c2-12) promulgated by the SEC pursuant to the 1934 Act, as the same may be amended from time to time, together with all interpretive guidances or other official interpretations or explanations thereof that are promulgated by the SEC.

"SEC" shall mean the United States Securities and Exchange Commission.

"Securities Counsel" shall mean legal counsel expert in federal securities law.

"State" shall mean the State of Michigan.

Section 3. Provision of Annual Reports.

(a) Each year, the County shall provide, or shall cause the Dissemination Agent to provide, not later than the date seven months after the end of the County's fiscal year, commencing with the County's Annual Report for its fiscal year ended December 31, 2016, to the MSRB an Annual Report for the preceding fiscal year which is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 business days (or such lesser number of days as is acceptable to the Dissemination Agent) prior to said date, the County shall provide the Annual

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Report to the Dissemination Agent (if other than the County). Currently, the County's fiscal year commences on January 1. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by specific reference other information as provided in Section 4 of this Disclosure Certificate; provided, however, that if the audited financial statements of the County are not available by the deadline for filing the Annual Report, they shall be provided when and if available, and unaudited financial statements in a format similar to the audited financial statements then most recently prepared for the County shall be included in the Annual Report.

(b) If the County is unable to provide to the MSRB an Annual Report of the County by the date required in subsection (a), the County shall file a notice, in a timely fashion, with the MSRB, in substantially the form attached as Exhibit A.

(c) If the County's fiscal year changes, the County shall file written notice of such change with the MSRB, in substantially the form attached as Exhibit B.

(d) Whenever any Annual Report or portion thereof is filed as described above, it shall be attached to a cover sheet in substantially the form attached as Exhibit C.

(e) If the Dissemination Agent is other than the County, the Dissemination Agent shall file a report with the County certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided.

(f) In connection with providing the Annual Report, the Dissemination Agent (if other than the County) is not obligated or responsible under this Disclosure Certificate to determine the sufficiency of the content of the Annual Report for purposes of the Rule or any other state or federal securities law, rule, regulation or administrative order.

Section 4. Content of Annual Reports. The County's Annual Report shall contain or include by reference the following:

(a) Updates of the numerical financial information and operating data (excluding any pictorial representation) included in the Official Statement for the Bonds appearing in the Tables or under the headings in Appendix A of the Official Statement, the Section describing the County, as described below:

(1) Population; (2) History of Valuations; (3) Major Taxpayers; (4) Tax Rate Limitations; (5) Tax Rates - (Per $1,000 of Valuation); (6) Tax Levies and Collections; (7) Pension Fund; (8) Other Post-Employment Benefits;

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(9) Labor Force; (10) Debt Statement; and (11) Legal Debt Margin.

(b) Audited financial statements, or in the event audited financial statements are not available, the County shall provide unaudited financial statements, and then provide audited financial statements immediately after they become available.

(c) Such additional financial information or operating data as may be determined by the County and its advisors as desirable or necessary to comply with the Rule.

Section 5. Reporting of Significant Events.

(a) The County covenants to provide, or cause to be provided, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not in excess of ten (10) business days after the occurrence of the event and in accordance with the Rule:

(1) Principal and interest payment delinquencies;

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

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

(4) Unscheduled draws on credit enhancements reflecting financial difficulties;

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

(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security;

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

(8) Bond calls, if material;

(9) Defeasances;

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

(11) Rating changes;

(12) Tender offers;

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(13) Bankruptcy, insolvency, receivership or similar event of the obligated person;

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

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

(b) Whenever the County obtains knowledge of the occurrence of a Listed Event described in subsection (a)(2), (7), (8), (10), (14) or (15), the County shall as soon as possible determine if such Listed Event would be material under applicable federal securities laws. The County covenants that its determination of materiality will be made in conformance with federal securities laws.

(c) If the County determines that (i) a Listed Event described in subsection (a)(1), (3), (4), (5), (6), (9), (11), (12) or (13) has occurred or (ii) the occurrence of a Listed Event described in subsection (a)(2), (7), (8), (10), (14) or (15) would be material under applicable federal securities laws, the County shall cause a notice of such occurrence to be filed with the MSRB within ten (10) business days of the occurrence of the Listed Event, together with a cover sheet in substantially the form attached as Exhibit D. In connection with providing a notice of the occurrence of a Listed Event described in subsection (a)(9), the County shall include in the notice explicit disclosure as to whether the Bonds have been escrowed to maturity or escrowed to call, as well as appropriate disclosure of the timing of maturity or call.

(d) In connection with providing a notice of the occurrence of a Listed Event, the Dissemination Agent (if other than the County), solely in its capacity as such, is not obligated or responsible under this Disclosure Certificate to determine the sufficiency of the content of the notice for purposes of the Rule or any other state or federal securities law, rule, regulation or administrative order.

(e) The County acknowledges that the "rating changes" referred to in subsection (a)(11) above may include, without limitation, any change in any rating on the Bonds or other indebtedness for which the Issuer or the County is liable.

(f) The County acknowledges that it is not required to provide a notice of a Listed Event with respect to credit enhancement when the credit enhancement is added after the primary offering of the Bonds, the County or the Issuer does not apply for or participate in obtaining such credit enhancement, and such credit enhancement is not described in the Official Statement.

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Section 6. Mandatory Electronic Filing with EMMA.

All filings with the MSRB under this Disclosure Certificate shall be made by electronically transmitting such filings through the EMMA Dataport at http://www.emma.msrb.org as provided by the amendments to the Rule adopted by the SEC in Securities Exchange Act Release No. 59062 on December 5, 2008.

Section 7. Termination of Reporting Obligation.

(a) The County's obligations under this Disclosure Certificate shall terminate upon the legal defeasance or the prior redemption or payment in full of all of the Bonds. If the County's obligation to pay a portion of the principal of and interest on the Bonds is assumed in full by some other entity, such entity shall be responsible for compliance with this Disclosure Certificate in the same manner as if it were the County, and the County shall have no further responsibility hereunder.

(b) This Disclosure Certificate, or any provision hereof, shall be null and void in the event that the County (i) receives an opinion of Securities Counsel, addressed to the County, to the effect that those portions of the Rule, which require such provisions of this Disclosure Certificate, do not or no longer apply to the Bonds, whether because such portions of the Rule are invalid, have been repealed, amended or modified, or are otherwise deemed to be inapplicable to the Bonds, as shall be specified in such opinion, and (ii) files notice to such effect with the MSRB.

Section 8. Dissemination Agent. The County, from time to time, may appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Except as otherwise provided in this Disclosure Certificate, the Dissemination Agent (if other than the County) shall not be responsible in any manner for the content of any notice or report prepared by the County pursuant to this Disclosure Certificate.

Section 9. Amendment; Waiver.

(a) Notwithstanding any other provision of this Disclosure Certificate, this Disclosure Certificate may be amended, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:

(i) if the amendment or waiver relates to the provisions of Section 3(a), (b), (c), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, a change in law or a change in the identity, nature or status of the County, or type of business conducted by the County;

(ii) this Disclosure Certificate, as so amended or taking into account such waiver, would, in the opinion of Securities Counsel, have complied with the requirements of the Rule at the time of the 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, in the opinion of nationally recognized bond counsel, materially impair the interests of the Bondholders.

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(b) In the event of any amendment to, or waiver of a provision of, this Disclosure Certificate, the County shall describe such amendment or waiver in the next Annual Report and shall include an explanation of the reason for such amendment or waiver. In particular, if the amendment results in a change to the annual financial information required to be included in the Annual Report pursuant to Section 4 of this Disclosure Certificate, the first Annual Report that contains the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of such change in the type of operating data or financial information being provided. Further, if the annual financial information required to be provided in the Annual Report can no longer be generated because the operations to which it related have been materially changed or discontinued, a statement to that effect shall be included in the first Annual Report that does not include such information.

(c) If the amendment results in a change to the accounting principles to be followed in preparing financial statements as set forth in Section 4 of this Disclosure Certificate, the Annual Report for the year in which the change is made shall include a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of such differences and the impact of the changes on the presentation of the financial information. To the extent reasonably feasible, the comparison shall also be quantitative. A notice of the change in accounting principles shall be filed by the County or the Dissemination Agent (if other than the County) at the written direction of the County with the MSRB.

Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the County from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the County chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the County shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

Section 11. Failure to Comply. In the event of a failure of the County or the Dissemination Agent (if other than the County) to comply with any provision of this Disclosure Certificate, any Bondholder or Beneficial Owner may bring an action to obtain specific performance of the obligations of the County or the Dissemination Agent (if other than the County) under this Disclosure Certificate, but no person or entity shall be entitled to recover monetary damages hereunder under any circumstances, and any failure to comply with the obligations under this Disclosure Certificate shall not constitute a default with respect to the Bonds. Notwithstanding the foregoing, if the alleged failure of the County to comply with this Disclosure Certificate is the inadequacy of the information disclosed pursuant hereto, then the Bondholders and the Beneficial Owners (on whose behalf a Bondholder has not acted with respect to this alleged failure) of not less than a majority of the aggregate principal amount of the then outstanding Bonds must take the actions described above before the County shall be compelled to perform with respect to the adequacy of such information disclosed pursuant to this Disclosure Certificate.

Section 12. Duties of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate.

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Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the County, the Issuer, the Dissemination Agent, the Participating Underwriter, the Bondholders and the Beneficial Owners, and shall create no rights in any other person or entity.

Section 14. Transmission of Information and Notices. Unless otherwise required by law or this Disclosure Certificate, and, in the sole determination of the County or the Dissemination Agent, as applicable, subject to technical and economic feasibility, the County or the Dissemination Agent, as applicable, shall employ such methods of information and notice transmission as shall be requested or recommended by the herein-designated recipients of such information and notices.

Section 15. Additional Disclosure Obligations. The County acknowledges and understands that other State and federal laws, including, without limitation, the Securities Act of 1933, as amended, and Rule 10b-5 promulgated by the SEC pursuant to the 1934 Act, may apply to the County, and that under some circumstances, compliance with this Disclosure Certificate, without additional disclosures or other action, may not fully discharge all duties and obligations of the County under such laws.

Section 16. Governing Law. This Disclosure Certificate shall be construed and interpreted in accordance with the laws of the State, and any suits and actions arising out of this Disclosure Certificate shall be instituted in a court of competent jurisdiction in the State. Notwithstanding the foregoing, to the extent this Disclosure Certificate addresses matters of federal securities laws, including the Rule, this Disclosure Certificate shall be construed and interpreted in accordance with such federal securities laws and official interpretations thereof.

COUNTY OF INGHAM

By: Its: Controller/Administrator

Dated: ______, 2017

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EXHIBIT A

NOTICE OF FAILURE TO FILE ANNUAL REPORT

Name of Issuer: Ingham County Building Authority

Name of Obligated Person: County of Ingham (the "County")

Name of Bond Issue: Building Authority Bonds (Community Mental Health Building), Series 2017 (Limited Tax General Obligation)

Date of Bonds: ______, 2017

NOTICE IS HEREBY GIVEN that the County of Ingham has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of its Continuing Disclosure Certificate with respect to the Bonds. The County of Ingham anticipates that the Annual Report will be filed by .

COUNTY OF INGHAM

By:

Its:

Dated:

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EXHIBIT B

NOTICE OF CHANGE IN COUNTY'S FISCAL YEAR

Name of Issuer: Ingham County Building Authority

Name of Obligated Person: County of Ingham (the "County")

Name of Bond Issue: Building Authority Bonds (Community Mental Health Building), Series 2017 (Limited Tax General Obligation)

Date of Bonds: ______, 2017

NOTICE IS HEREBY GIVEN that the County of Ingham's fiscal year has changed. Previously, the County of Ingham's fiscal year ended on . It now ends on .

COUNTY OF INGHAM

By:

Its:

Dated:

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EXHIBIT C

ANNUAL REPORT COVER SHEET

This cover sheet and the attached Annual Report or portion thereof should be filed electronically with the Municipal Securities Rulemaking Board through the EMMA Dataport at http://www.emma.msrb.org pursuant to Securities and Exchange Commission Rule 15c2- 12(b)(5)(i)(A) and (B).

County's Name: County of Ingham

County's Six-Digit CUSIP Number(s):

or Nine-Digit CUSIP Number(s) to which the attached Annual Report relates:

Number of pages of the attached Annual Report or portion thereof:

Name of Bond Issue to which the attached Annual Report relates: Ingham County Building Authority, Building Authority Bonds (Community Mental Health Building), Series 2017 (Limited Tax General Obligation)

Date of such Bonds:

I hereby represent that I am authorized by the County or its agent to distribute this information publicly:

Signature:

Name:

Title: Employer: Address: City, State, Zip Code: Voice Telephone Number:

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EXHIBIT D

EVENT NOTICE COVER SHEET

This cover sheet and the attached Event Notice should be filed electronically with the Municipal Securities Rulemaking Board through the EMMA Dataport at http://www.emma.msrb.org pursuant to Securities and Exchange Commission Rule 15c2-12(b)(5)(i)(C) and (D).

County's and/or Other Obligated Person's Name: County of Ingham County's Six-Digit CUSIP Number(s): or Nine-Digit CUSIP Number(s) to which the attached Event Notice relates:

Number of pages of the attached Event Notice: Description of the attached Event Notice (Check One):

1. Principal and interest payment delinquencies 2. Non-Payment related defaults 3. Unscheduled draws on debt service reserves reflecting financial difficulties 4. Unscheduled draws on credit enhancements reflecting financial difficulties 5. Substitution of credit or liquidity providers, or their failure to perform 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security 7. Modifications to rights of securities holders 8. Bond calls 9. Defeasances 10. Release, substitution, or sale of property securing repayment of the securities 11. Rating changes 12. Tender offers 13. Bankruptcy, insolvency, receivership or similar event of an obligated person 14. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of an obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms 15. Appointment of a successor or additional trustee, or the change of name of a trustee 16. Failure to provide annual financial information as required 17. Other material event notice (specify)

I hereby represent that I am authorized by the County or its agent to distribute this information publicly:

Signature: Name: Title: Employer: Address: City, State, Zip Code: Voice Telephone Number:

Please format the Event Notice attached to this cover sheet in 10 point type or larger. Contact the MSRB at (202) 223-9503 with questions regarding this form or the dissemination of this notice.

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APPENDIX F DRAFT NOTICE OF SALE

[THIS PAGE INTENTIONALLY LEFT BLANK]

OFFICIAL NOTICE OF SALE

$10,000,000* *(subject to adjustment as described below)

INGHAM COUNTY BUILDING AUTHORITY COUNTY OF INGHAM, STATE OF MICHIGAN BUILDING AUTHORITY BONDS (COMMUNITY MENTAL HEALTH BUILDING), SERIES 2017 (LIMITED TAX GENERAL OBLIGATION)

SEALED BIDS for the purchase of the above bonds will be received by the undersigned at the office of the County Controller/Administrator, 341 S. Jefferson Street, Mason, Michigan 48854, on the 4th day of May, 2017, until 11:00 a.m., Eastern Daylight Time, at which time and place said bids will be publicly opened and read. Sealed bids also will be received on the same date and until the same time by an agent of the undersigned at the offices of the Municipal Advisory Council of Michigan (the "MAC"), Buhl Building, 535 Griswold, Suite 1850, Detroit, Michigan 48226, where they will be opened and read publicly. Signed bids may be submitted by fax to the County Controller/Administrator at (517) 676-7306 or the MAC at (313) 963-0943, but no bid will be received after the time for receiving bids specified above and the bidder bears all risks of transmission failure. Bidders may choose either location to present bids, but may not present bids at both locations.

IN THE ALTERNATIVE: Bids may be submitted electronically via PARITY pursuant to this Notice on the same date and until the same time, but no bid will be received after the time for receiving bids specified above. To the extent any instructions or directions set forth in PARITY conflict with this Notice, the terms of this Notice shall control. For further information about PARITY, potential bidders may contact PFM Financial Advisors LLC at (734) 994-9700 or PARITY at (212) 849-5021.

BOND DETAILS: The bonds will be fully registered bonds of the denomination of $5,000 each or any integral multiple thereof, not exceeding the aggregate principal amount for each maturity, at the option of the purchaser thereof, dated the date of their delivery, and will bear interest from their date payable on November 1, 2017, and semiannually thereafter.

The bonds will mature on the first day of November as follows:

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YEAR AMOUNT YEAR AMOUNT

2018 $335,000 2028 $495,000 2019 350,000 2029 515,000 2020 365,000 2030 535,000 2021 380,000 2031 560,000 2022 395,000 2032 580,000 2023 410,000 2033 605,000 2024 425,000 2034 630,000 2025 440,000 2035 655,000 2026 460,000 2036 680,000 2027 480,000 2037 705,000

TERM BOND OPTION: Bidders shall have the option of designating bonds maturing in the years 2018 through final maturity as serial bonds or term bonds, or both. The bid must designate whether each of the principal amounts shown above for the years 2018 through final maturity represent a serial maturity or a mandatory redemption requirement for a term bond maturity. There may be more than one term bond designated. In any event, the above principal amount scheduled for the years 2018 through final maturity shall be represented by either serial bond maturities or mandatory redemption requirements, or a combination of both. Any such designation must be made at the time bids are submitted.

PRIOR REDEMPTION:

A. MANDATORY REDEMPTION. Bonds designated as term bonds shall be subject to mandatory redemption at par and accrued interest on the dates and in the amounts corresponding to the annual principal maturities hereinbefore set forth. The bonds or portions of bonds to be redeemed shall be selected by lot.

B. OPTIONAL REDEMPTION. Bonds maturing on and after November 1, 2027, shall be subject to redemption prior to maturity, at the option of the Authority, in any order, at any time on and after November 1, 2026. Bonds of a denomination greater than $5,000 may be redeemed in part in amounts of $5,000 or any integral multiple thereof. If less than all of the bonds maturing in any year are to be redeemed, the bonds or portions of bonds to be redeemed shall be selected by lot. The redemption price shall be the par value of the bond or portion of the bond called to be redeemed plus interest to the date fixed for redemption.

C. NOTICE OF REDEMPTION. Not less than thirty and not more than sixty days’ notice of redemption shall be given to the registered owners of bonds called to be redeemed by mail to each registered owner at the registered address. Failure to receive notice of redemption shall not affect the validity of the proceedings for redemption. Bonds or portions of bonds called for redemption shall not bear interest on and after the date fixed for redemption, provided funds are on hand with the bond registrar and paying agent to redeem the same.

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INTEREST RATE AND BIDDING DETAILS: The bonds shall bear interest at a rate or rates not exceeding 5% per annum, to be fixed by the bids therefor, expressed in multiples of 1/8 or 1/20 of 1%, or both. The interest on any one bond shall be at one rate only and all bonds maturing in any one year must carry the same interest rate. The interest rate borne by bonds maturing in any one year shall not be less than the interest rate borne by bonds maturing in the preceding year. The difference between the highest and lowest interest rates shall not exceed two percentage points. No proposal for the purchase of less than all of the bonds or at a price less than 100% nor more than 105% of their par value will be considered.

BOOK-ENTRY-ONLY: The bonds will be issued in book-entry-only form as one fully- registered bond per maturity and will be registered in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository for the bonds. Purchase of the bonds will be made in book-entry-only form, in the denomination of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their interest in bonds purchased. The book-entry-only system is described further in the preliminary official statement for the bonds.

BOND REGISTRAR AND PAYING AGENT: The bonds shall be payable as to principal in lawful money of the United States upon surrender thereof at the corporate trust office of U.S. Bank National Association, Detroit, Michigan the bond registrar and paying agent. Interest shall be paid to the registered owner of each bond as shown on the registration books at the close of business on the 15th day of the calendar month preceding the month in which the interest payment is due. Interest shall be paid when due by check or draft drawn upon and mailed by the bond registrar and paying agent to the registered owner at the registered address. As long as DTC, or its nominee Cede & Co., is the registered owner of the bonds, payments will be made directly to such registered owner. Disbursement of such payments to DTC participants is the responsibility of DTC and disbursement of such payments to the beneficial owners of the bonds is the responsibility of DTC participants and indirect participants as described in the preliminary official statement for the bonds. The Authority from time to time as required may designate a successor bond registrar and paying agent.

PURPOSE AND SECURITY: The bonds are to be issued pursuant to the authorization contained in Act 31, Public Acts of Michigan, 1948 (First Extra Session), as amended, for the purpose of defraying part of the cost of renovating, constructing, furnishing, equipping and improving the existing Community Mental Health Building located at 812 East Jolly Road, Lansing, Michigan and acquiring, constructing, furnishing and equipping an approximately 42,000 square foot addition thereto, together with associated parking, in the County of Ingham for lease to the County of Ingham pursuant to a limited tax Full Faith and Credit General Obligation Contract of Lease (herein the "Lease"). The County and the Authority will enter into a sublease (the "Sublease") with the Community Mental Health Authority of Clinton-Eaton- Ingham Counties ("CMH"), who will be the major tenant in, occupy and maintain the Project, and pay rental with respect to the Project. The Lease and Sublease require CMH on behalf the County of Ingham to make cash rental payments to the Authority in such amounts as shall be sufficient to enable the Authority to pay the principal of and interest on the bonds as the same shall become due. The limited tax full faith and credit of the County of Ingham have been pledged for the making of the cash rental payments if CMH fails to do so and the County of Ingham is obligated to levy ad valorem taxes in such amounts as shall be necessary for the

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making of such cash rental payments. Taxes imposed by the County of Ingham are subject to constitutional and statutory tax limitations. The Authority has irrevocably pledged the cash rental payments for the payment of the principal of and interest on the bonds and a statutory lien on the cash rental payments has been created by the bond authorizing resolution.

ADJUSTMENT IN PRINCIPAL AMOUNT: Following receipt of bids and prior to final award, the Authority reserves the right to increase or decrease the principal amount of the bonds. Such adjustment, if necessary, will be made in increments of $5,000, and may be made in one or more maturities. The purchase price will be adjusted proportionately to the decrease in the principal amount of the bonds, but the interest rates specified by the successful bidder will not change. The successful bidder may not withdraw its bid as a result of any changes made as provided in this paragraph.

ADDITIONAL BONDS: For the terms upon which additional bonds of equal standing as to the cash rental payments may be issued reference is made to the bond authorizing resolution.

GOOD FAITH: A good faith deposit in the form of a certified or cashier's check drawn upon an incorporated bank or trust company, or wire transfer, in the amount of $100,000 payable to the order of the Ingham County Building Authority will be required of the successful bidder. If a check is used, it must accompany the bid. If a wire transfer is used, the successful bidder is required to wire its good faith deposit to the Authority not later than Noon, Eastern Daylight Time, on the next business day following the sale using the wire instructions provided by PFM Financial Advisors LLC. The good faith deposit will be applied to the purchase price of the bonds. In the event the purchaser fails to honor its accepted bid, the good faith deposit will be retained by the Authority. No interest shall be allowed on the good faith deposit, and checks of the unsuccessful bidders will be promptly returned to such bidder's representative or by registered mail. The good faith check of the successful bidder will be cashed and payment for the balance of the purchase price of the bonds shall be made at the closing.

AWARD OF BONDS: The bonds will be awarded to the bidder whose bid produces the lowest true interest cost to the Authority. True interest cost shall be computed by determining the annual interest rate (compounded semiannually) necessary to discount the debt service payments on the bonds from the payment dates thereof to May 17, 2017, and to the price bid.

LEGAL OPINION: Bids shall be conditioned upon the approving opinion of Dickinson Wright PLLC, attorneys of Lansing, Michigan, which opinion will be furnished without expense to the purchaser of the bonds at the delivery thereof. The fees of Dickinson Wright PLLC for services rendered in connection with such approving opinion are expected to be paid from bond proceeds. Except to the extent necessary to issue its approving opinion as to the validity of the bonds, Dickinson Wright PLLC has made no inquiry as to any financial information, statements or material contained in any financial documents, statements or materials that have been or may be furnished in connection with the authorization, issuance or marketing of the bonds and, accordingly, will not express any opinion with respect to the accuracy or completeness of any such financial information, statements or materials.

TAX MATTERS: The approving opinion of bond counsel will include an opinion to the effect that under existing law, the interest on the bonds (a) is excluded from gross income for federal

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income tax purposes, and (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; such opinion will note, however, that certain corporations must take into account interest on the bonds in determining adjusted current earnings for the purpose of computing such alternative minimum tax. The opinion set forth in clause (a) above will be subject to the condition that the Authority comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the bonds in order that interest thereon be (or continue to be) excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements could cause the interest on the bonds to be included in gross income retroactive to the date of issuance of the bonds. The Authority has covenanted to comply with all such requirements. Bond counsel will express no opinion regarding other federal tax consequences arising with respect to the bonds.

The Authority has not designated the bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code.

The successful bidder will be required as a condition of delivery of the bonds, to certify, in form and substance satisfactory to bond counsel, the "issue price" of the bonds within the meaning of Section 1273 of the Code, which, unless the bonds are purchased for the successful bidder's account and not with a view to distribution or resale, will include a representation that (i) the successful bidder made a bona fide public offering to members of the general public of all bonds and all maturities at initial offering prices and yields indicated in the information furnished in connection with the successful bid and (ii) at least the first 10 percent of each maturity of the bonds has been sold, or was reasonably expected at the time of pricing of the bonds to be sold, to the public at an initial offering price not exceeding the price for such maturity, or the price corresponding to the yield for such maturity, indicated in the information furnished in connection with the successful bid. In addition, if the successful bidder will obtain a municipal bond insurance policy or other credit enhancement for the bonds in connection with their original issuance, the successful bidder will be required, as a condition of delivery of the bonds, to certify that the premium therefor will be less than the present value of the interest expected to be saved as a result of such insurance or other credit enhancement. The form of an acceptable certificate will be provided by bond counsel.

In addition, the approving opinion of bond counsel will include an opinion to the effect that under existing law, the principal and interest on the bonds are exempt from taxation by the State of Michigan and by any other taxing authority within the State of Michigan, except estate taxes and taxes on gains realized from the sale, payment or other disposition thereof.

CUSIP: CUSIP numbers will be imprinted on all bonds of this issue at the Authority's expense. Neither the failure to print numbers nor an improperly printed number shall constitute cause for the purchaser to refuse to accept delivery. The purchaser shall be responsible for requesting assignment of numbers and for payment of any charges for the assignment of numbers.

OFFICIAL STATEMENT: A copy of the Authority's official statement relating to the bonds may be obtained by contacting PFM Financial Advisors LLC at the address referred to below. The official statement is in a form deemed final by the Authority for purposes of paragraph

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(b)(1) of SEC Rule 15c2-12 (the "Rule"), but is subject to revision, amendment and completion in a final official statement. After the award of the bonds, the Authority will provide on a timely basis copies of a final official statement, as that term is defined in paragraph (e)(3) of the Rule, at the Authority's expense in sufficient quantity to enable the successful bidder or bidders to comply with paragraph (b)(3) and (b)(4) of the Rule and the rules of the Municipal Securities Rulemaking Board. Requests for such additional copies of the final official statement shall be made to PFM Financial Advisors LLC at the address set forth below within 24 hours of the award of the bonds. CONTINUING DISCLOSURE: In order to assist bidders in complying with paragraph (b)(5) of the Rule, the County of Ingham will undertake to provide certain annual financial information and notices of the occurrence of certain events, if material. A description of this undertaking is set forth in the preliminary official statement and will also be set forth in the final official statement. BIDDER CERTIFICATION: NOT "IRAN-LINKED BUSINESS": By submitting a bid, the bidder shall be deemed to have certified that it is not an "Iran-Linked Business" as defined in Act No. 517, Public Acts of Michigan, 2012; MCL 129.311 et seq. DELIVERY OF BONDS: The Bonds will be delivered without expense to the purchaser through DTC, New York, New York. The usual closing documents, including a continuing disclosure certificate and a certificate that no litigation is pending affecting the issuance of the bonds, will be delivered at the time of the delivery of the bonds. If the bonds are not tendered for delivery by twelve o'clock noon, Eastern Daylight Time, on the 45th day following the date of sale, or the first business day thereafter if said 45th day is not a business day, the successful bidder may on that day, or any time thereafter until delivery of the bonds, withdraw its proposal by serving notice of cancellation, in writing, on the undersigned, in which event the Authority shall return the good faith deposit. Payment for the bonds shall be made in Federal Reserve Funds. Accrued interest to the date of delivery of the bonds shall be paid by the purchaser at the time of delivery. FINANCIAL CONSULTANT: Further information with respect to the bonds may be obtained from PFM Financial Advisors LLC, 555 Briarwood Circle, Suite 333, Ann Arbor, Michigan 48108. Telephone: (734) 994-9700, Financial Consultant to the Authority.

THE RIGHT IS RESERVED TO REJECT ANY OR ALL BIDS. ENVELOPES containing the bids should be plainly marked "Proposal for Bonds."

Peter A. Cohl, Chairperson Ingham County Building Authority

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To: Ingham County -or- Municipal Advisory Council Sale Date: May 4, 2017 Building Authority Buhl Building 11:00 AM, EDT 341 S Jefferson 535 Griswold, Suite 1850 Mason, Michigan 48854 Detroit, MI 48226 Phone: (517) 676-7206 Phone: (800) 337-0696 Fax: (517) 676-7306 Fax: (313) 963-0943

RE: $10,000,000* – Ingham County Building Authority, County of Ingham, State of Michigan, Building Authority Bonds (Community Mental Health Building), Series 2017 (LTGO)

For all or none of the above Bonds, in accordance with the Official Notice of Sale, we will pay you $10,000,000* less a discount or plus a premium of $______for fully registered bonds bearing interest rates and maturing in the stated years as follows:

Year Coupon Rate % Year Coupon Rate % 2018 ______2028 ______2019 ______2029 ______2020 ______2030 ______2021 ______2031 ______2022 ______2032 ______2023 ______2033 ______2024 ______2034 ______2025 ______2035 ______2026 ______2036 ______2027 ______2037 ______The following maturities have been designated as Term Bonds:

Mandatory Redemption Mandatory Redemption From: to From: to From: to From: to From: to From: to From: to From: to From: to From: to

In making this offer, we accept all of the terms and conditions of the Official Notice of Sale published in the Bond Buyer.

Not as a part of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we have made the following computations:

TRUE INTEREST COST:______% (Calculated from May 17, 2017)

Account Manager: By:

Account Members: ______

The foregoing offer is hereby accepted by and on behalf of the Ingham County Building Authority, County of Ingham, State of Michigan, on the 4th day of May, 2017.

Attest: By

Title: Title ______*Subject to Adjustment

Additional information relative to this Bond issue may be obtained from: PFM Financial Advisors LLC 555 Briarwood Circle, Suite 333 Ann Arbor, MI 48108 (734) 994-9700